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Kalgold

Kalgold is an open-pit mining operation close to Mafikeng. The mine accesses gold-bearing ore in a banded ironstone formation within the Kraaipan Greenstone Belt. Tonnage mined at Kalgold is treated at a carbon-in-leach plant on site.

Safety

There were no fatal accidents at Kalgold in FY11 while the LTIFR for the year was 5.43 per million hours worked compared to 1.49 in FY10. Commendably, in 2011, Kalgold plant achieved one million fatality-free shifts over a 16-year period.

• More detailed information on safety performance and Harmony’s sustainable development concerns in South Africa can be found in the online sustainable development report.

Kalgold employed 545 people, including 316 contractors, in FY11.

• Detailed information on Kalgold’s resources and reserves appears in the mineral resources and mineral reserves section of the annual report.

Operations review

Volumes at Kalgold declined 5% over the year, largely due to several mechanical breakdowns in the mill section of the metallurgical plant. Gold produced declined by 18% to 1 253kg (40 285oz).

The Watertank pit will be mined out within nine months in FY12 and mining in the A zone is planned to start in the latter part of FY12. A project to replace the carbon-in-leach tanks in the plant will start in FY12.

Harmony continued with brownfields exploration in areas surrounding the Kalgold operation.

Financial review

Despite the lower level of production and cash costs of R254 946/kg (US$1 135/oz), Kalgold reported an operating profit of R81 million (US$12 million). The increase in unit cost largely reflects lower gold production while the tonnage mined remained relatively constant. Capital expenditure for the year was R18 million (US$3 million), mostly on maintaining major equipment.

Key statistics

Production		FY11	FY10	FY09
Volumes milled	000t (metric)	1 611	1 700	1 542
	000t (imperial)	1 775	1 873	1 700
Gold produced	kg	1 253	1 526	2 015
	oz	40 285	49 063	64 784
Average grade	g/t	0.78	0.90	1.31
	oz/t	0.023	0.026	0.038
Financial
Revenue	R million	399	390	512
	US$ million	57	51	57
Operating cost*	R/kg	254 946	182 215	146 314
	US$/oz	1 135	748	506
Operating profit	R million	81	116	220
	US$ million	12	15	25
Capital expenditure	R million	18	11	10
	US$ million	3	1	1
People
Number of employees
Employees		229	230
Contractors		316	250
Total		545	480
HDSAs in management	%	67	63
Women in mining	%	13	13
Expenditure on training and development	R million	1	1
Safety
fatalities		0	0
LTIFR	per million hours worked	5.43	1.49
Environment
Electricity used	000MWh	42	77
Water used for primary activities	000m3	2 750	2 337
GHG emissions	000t CO2e	43	65
Expenditure on local economic development	R million	1	1
Status of mining right	New-order mining right granted in February 2009

* Includes royalty payment in FY10 and FY11.