By SVEN LUNSCHE

THE taxed profits of South Africa's six largest mining houses slumped by a combined 37% in the March quarter compared with December, as results were hit by falling gold prices and lower production volumes.

In the March quarter the taxed profits of JCI, Gengold, Randgold, Avgold, Anglogold and Gold Fields totalled R714-million, a decline of well over R400-million compared with December's R1.14-billion.

In the wake of the earnings slump, job losses at the industry's marginal mines have again become a threat. Releasing their results, four mines - JCI's Randfontein, Anglo's Freegold and Avgold's Loraine and Hartebeestfontein - warned that job cuts were imminent. The mines, along with Randgold's ERPM and Grootvlei and GFSA's Deelkraal, reported a loss in March.

Among the mining houses, only Gengold managed to improve its bottom-line, lifting taxed earnings by 14.5% to R138-million. Avgold, the gold mining arm of Anglovaal, reported the sharpest decline - by 90% to R17-million - followed by JCI's 66.7% slump to R44-million. Randgold's earnings were down by 57% to R55-million while GFSA net profits fell by almost R100-million to R236-million.

The mining houses attributed lower production volumes to the high number of public holidays, a factor that will continue to plague them in the current three months.

But more worrying for the mines is the fall in the rand gold price received. Until the beginning of this year they relied on the weakness of the rand to offset the sluggish dollar gold price on international precious metal markets.

Now, with the rand holding steady against the greenback, and bullion falling to four-year lows, they are faced with a sharp drop in the rand-gold price received.

Avgold's price in the quarter was one of the lowest in the industry - R51 792/kg, compared with R54 200 three months ago. Anglo achieved a fairly respectable R53 000 average price since it hedged about 5% of its production.

At a level of about R55 000/kg only three mines were rated by the Chamber of Mines as marginal in December last year - Deelkraal, Loraine and Gengold's Winkelhaak.

However, when the March evaluation is done this week, up to five mines could be added to the list, industry analysts say. The recent trend of mine consolidations is likely to accelerate unless the rand gold price shows a marked improvement.

Gold shares on the JSE have been hit hard by the recent slump. This week the all-gold index dropped to a four-year low as the gold price traded at below $340 an ounce. Bullion closed at just under $340 on Friday, close to this weeks two-and-a-half month low. Analysts see little upside for the gold price in the current global low- inflation environment. JSE stockbrokers are also bracing themselves for a continued fall in the share prices of local gold mines and mining houses.