UPDATE 3-S.Africa says mine output slides after power cuts

(Adds Chamber of Mines comment)

By Sue Thomas

JOHANNESBURG, March 13 (Reuters) - Mining production in South Africa, the world's largest platinum producer, fell 16.5 percent in January after power shortages closed mines for five days that month, Statistics South Africa said on Thursday.

Gold production plunged 16.5 percent in January, compared to the same month last year, sharpening a downward trend that saw South Africa lose its status as the world's top producer for more than a century to China last year.

Platinum group metals production fell 15.9 percent.

"For gold, it's going to push those figures down even further than they were," said David Davis, an analyst at Credit Suisse Standard Securities in Johannesburg.

South Africa's Chamber of Mines said on Monday 2007 gold production fell 7.4 percent to 254,685 kg on lower ore grades and safety-related mine closures. The fall was bigger than the average 6.3 percent decline over the past decade.

"The Statistics South Africa numbers clearly demonstrate the significant impact the electricity induced outages have had on the mining sector," the chamber, which represents big mining companies, said.

It said the impact had been felt in the export numbers, with South Africa's trade deficit rising to 10.2 billion rand ($1.28 billion) in January, when the key mining industry was forced to shut for five days because of a nationwide electricity shortage.

However, the total value of 2007 mineral sales rose 16.6 percent to 225.64 billion rand ($28.96 billion), after rising 35.54 percent in 2006, as metals prices soared. Gold sales were 7.1 percent higher at 38.99 billion rand, Stats SA said.

"Fortunately for us there's been a net increase in the gold price and a depreciation of the rand, which has resulted in a higher rand/gold price," Davis said.

"If this (power cuts) didn't happen, certainly we would be seeing significant profits coming from the mines."

$1,000

U.S. gold futures GCJ8 traded at $1,000 an ounce for the first time ever on Thursday, and spot gold XAU= jumped to a peak of $997.50 an ounce. Gold had risen as much as 19 percent in 2008, on top of a 32 percent rise last year.

Platinum XPT= hit a record $2,290 on March 4 because of the electricity crunch in top producer South Africa, but has since fallen on news that the country's miners would get more power supply.

After the five-day shut-down, electricity utility Eskom [ESKJ.UL] ordered companies to cut power usage by 10 percent to help solve a crisis that has driven up metals prices and prompted some miners to cut production forecasts. Eskom said last week it would start easing power rations for mines.

Gold Fields (GFIJ.J), the world's fourth-largest gold miner, said last month it would close some of its mine shafts because of the electricity shortage and warned 6,900 jobs could be lost.

Stats S.A. said total mining production for the three months ended January 2008 fell 3.9 percent compared with the previous three months, as gold production tumbled 9.2 percent and non-gold minerals production lost 3 percent.

"I think January is a singular month because of the power stoppages, but certainly in the longer term, irrespective of power problems, mining production, particularly gold, will still decline," Davis said.

South Africa churned out a record 1,000 tonnes of gold in a single year in 1970, a feat analysts say the country is unlikely to repeat because of its declining ore grades.

(Additional reporting by Marius Bosch; editing by Chris Johnson)