Metallon's Zimbabwe unit Q3 gold output falls 7 pct year-on year

HARARE, Nov 18 (Reuters) - Metallon Corp, the biggest gold producer in Zimbabwe, reported a 7 percent drop in gold production year-on-year, during its third quarter due to equipment breakdowns and increased power disruptions.

Metallon Corp said in a statement that gold production for the third quarter ending September fell to 23,990 ounces compared with 25,882 ounces during the same period in 2014.

London-based Metallon, which is not listed, owns fives mines in Zimbabwe, three which are operational and two that are being revived, through its Metallon Gold unit.

Metallon said it is looking at possible solutions to supplement grid power supply but the company did not elaborate in its statement.

The lower output is another setback for Zimbabwe's mining sector, which has been hit by slumping commodities prices and power shortage. Producers have asked President Robert Mugabe's government to cut royalties and electricity tariffs by half to prevent the collapse of mines.

Gold (Other OTC: GDCWF - news) is Zimbabwe's third-largest export earner after tobacco and platinum and the sector is still reeling from a deep recession between 1999-2008, during which output fell to just 3.8 tonnes, its lowest since independence in 1980.

Gold prices hit their lowest levels in nearly six years, at $1,071.4 an ounce at 1030GMT and the metal is under pressure following expectations that the U.S (Other OTC: UBGXF - news) . Federal Reserve is set to raise interest rates next month. (Writing by Peroshni Govender; Editing by James Macharia)