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Harmony says operating mines cope with 10% less power


Publication: Mining Weekly
Journalist: Matthew Hill

JSE-listed Harmony Gold has not asked struggling power utility Eskom for more than 90% power for its operating mines, but has requested more power for its growth projects, CEO Graham Briggs said on Thursday.

The Randfontein-based gold major had just completed a far-reaching restructuring exercise, which saw it retrenching 5 985 workers in the six months to March, meaning that it did not necessarily need the extra 5% of power that some of its competitors had received.

“Our need for power is our growth projects going forward,” Briggs said in a teleconference, without detailing how much power these new developments might require. He said that it was unlikely that any further significant job losses would take place.

Harmony’s capital growth projects in South Africa included the Phakisa mine that it was building near Welkom to reach full production in 2009/10, as well as expansion projects at Elandsrand and Doornkop.

Briggs said that the company was also keen on exploiting potential at the numerous surface assets that the company had in its portfolio, where it could inject capital for a quick return.

Harmony had not considered developing a number of these low-margin assets under previous gold price, but the current high rand/gold prices were leading the firm to have another look at them.

It was also extending the life of its already operating surface assets in the Free State, which otherwise would have only lived for between one year and three years.

“Kalgold was probably going to die [had it not been for the current gold prices],” Briggs said. That surface operation is based in the North West province.

GRADES

Harmony, which mined at an grade of 4,81 g/t during the quarter ended March 31, was targeting a grade of “just under” 5 g/t in the last quarter of its current financial year, stated Briggs.

The group’s South African underground mines had an average grade of 5,5 g/t.

Briggs conceded that improvement was necessary in this regard, which was linked to Harmony’s mine call factor, which is the ratio of gold coming out of the plant to the gold contained in the mine’s stopes.

“We’re still below where we should be, and there is still a mine call factor problem,” he stated, adding that the Elandsrand mine was “suffering” from this problem more than the other operations.

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