• JOHANNESBURG (Reuters) - Africa's top bullion producer AngloGold Ashanti could reduce investment in some of its mines in Mali and extract the gold that remains as it cuts costs to help offset the falling price of the precious metal.

    South African mining companies are contending with falling gold prices, down 40 percent since 2011, and rising costs that have forced them to shelve projects, cut jobs and sell mines.

    "If we end up below a $1,000 gold price we may start harvesting some of the short-life mines for cash for a period until prices recover," Chief Executive Srinivasan Venkatakrishnan said on a media conference call.

    The company, the world's third-largest gold producer, launched a broad-based cost-cutting strategy in 2013 that has helped turn it into one of the world's lowest cost producers.

    On Monday, it reported second-quarter adjusted headline earnings of $26 million, or 6 U.S. cents per share, compared with a loss of $4 million or 1 cent per share a year earlier.

    Shares rose 8.2 percent to 87.24 rand by 1214 GMT, outperforming a 4.4 percent gain in Johannesburg's gold mining index.

    It is in talks to sell its Yatela mine in Mali and has closed a shaft at its Great Maligwa mine in South Africa. It also benefited from a lower oil price and weaker currencies in South Africa, Brazil and Australia.

    "Their cost cutting is quite good, they are holding their own in a difficult environment," Nolan Macnamara, a trader at Nedbank Private Wealth Stockbrokers, said.

    He said the company's strategy of focusing on its cash producers was in line with an industry-wide strategy.

    Venkat said AngloGold could reduce investment in Yatela as well as Morila and Sadiola in Mali, and focus on harvesting the remaining gold in the short-life mines.

    AngloGold production dipped to 1.007 million ounces in the second quarter, slightly ahead of company guidance but lower than 1.098 million ounces in the same quarter last year, mainly due lower output in South Africa and the sale of its Navachab mine.

    Meanwhile, wage talks between unions and South African gold producers were deadlocked last week, raising the threat of a strike as the mining industry still reels from a record stoppage last year.

    Venkat said AngloGold's geographically diversified portfolio would help shield the company from the effects of any protracted strike in South Africa. South Africa accounts for about a third of group output.

    Companies are offering wage increases of up to 17 percent versus union demands of up to more than double the current basic pay.

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