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Phakisa

Phakisa moved from project to operating mine on the Basal Reef in FY11, after starting production in FY08. Once the expansion project is complete, this mine will operate to a depth of some 2 400 metres with monthly capacity of 72 000 tonnes. Phakisa includes the Nyala shaft, some five kilometres away, which is used to hoist rock and as a second escape route. Ore mined at Phakisa is processed at Harmony 1 plant, some 20 kilometres away.

Safety

As reported in FY10, an explosion underground shortly after year end tragically resulted in five fatalities (FY10: three). There were no further fatalities in the review period. The LTIFR for FY11 was 10.27 per million hours worked (FY10: 8.40).

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

Phakisa employed 3 105 people in FY11, including 239 contractors.

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

Operations review

Milled volumes increased by 14% year on year. This, together with a 13% improvement in recovered grade mined, contributed to a 29% increase in gold produced to 56 649oz as part of the build-up strategy.

The start of the review period was tragically marred for Phakisa after an explosion, caused by an underground fire, in which five mine rescue team members died while manning a fresh-air base. This event also resulted in the loss of 13 production days, exacerbated by an ice-pipe failure in the shaft and fire in the 66 – 63 stope.

The production build-up was affected by geological issues, illegal mining activities and down-time on the new infrastructure. Pleasingly, Phakisa set a record of 1 763t ice per day, resulting in water temperatures of <6°C which in turn improved both ventilation and productivity. Some remaining issues with the ice plant as well as settler failure at Nyala are being addressed.

Key statistics

Production		FY11	FY10	FY09
Volumes milled	000t (metric)	387	339	185
	000t (imperial)	427	374	204
Gold produced	kg	1 762	1 371	691
	oz	56 649	44 079	22 216
Average grade	g/t	4.55	4.04	3.74
	oz/t	0.133	0.118	0.109
Financial
Revenue	R million	551	375	171
	US$ million	79	50	19
Operating cost*	R/kg	269 531	232 190	160 712
	US$/oz	1 200	953	555
Operating profit	R million	78	49	64
	US$ million	11	7	7
Capital expenditure	R million	369	486	461
	US$ million	53	64	51
People
Number of employees
Employees		2 866	2 858
Contractors		239	176
Total		3 105	3 034
HDSAs in management	%	30	32
Women in mining	%	9	11
Expenditure on training and development	R million	14	10
Safety
fatalities		5	3
LTIFR	per million hours worked	10.27	8.40
Environment
Electricity used	000MWh	95	67
Water used for primary activities**	000m3	717	408
GHG emissions	000t CO2e	247	81
Expenditure on local economic development	R million	5	2
Status of mining right	New-order mining right granted in December 2007

* Includes royalty payment in FY10 and FY11.

** Increase primarily relects transition from development phase to production.