Skip to content skip to secondary navigation Top of the page

News
and events

Media coverage

Disclaimer:
Please note that the articles contained in this section of the website have been selected from articles published by the media. The facts and opinions expressed therein are those reported by the journalist and publication and therefore may not necessarily reflect those reported by the Company.

SA could learn from 'transparent' Papua New Guinea – Harmony Gold.


Publication: Mining Weekly
Source: www.miningweekly.com
Journalist: Martin Creamer

Video: Harmony Gold CEO Graham Briggs tells Mining Weekly Online’s Martin Creamer that South Africa could learn from the way in which the Papua New Guinea government is going all out to facilitate mining investment.

JOHANNESBURG (miningweekly.com) – South Africa could learn from the “transparent, open and honest” approach of the government of Papua New Guinea (PNG) in facilitating foreign direct mining investment, says Harmony Gold CEO Graham Briggs.

Briggs, who was speaking to the media after Harmony posted its highest-ever quarterly profit of R1.3-billion, tells Mining Weekly Online that some of the company’s shareholders are already valuing the incipient PNG portion of the company’s total portfolio more highly than the long-standing South African portion, where the JSE-listed company is bringing several new gold projects into production and where it employs 40 000 people.

He adds that the South African mining industry needs a lot more transparency, which has been one of the discussion points that the company has had with the South African government.

“You need to be able to see who owns what and who is applying for what, and the new electronic system is not as transparent as it should be,” he adds.

In PNG, the company has been receiving red-carpet treatment, with access being laid on to the country’s Prime Minister and half of his Cabinet.

“We’re a medium-to-small-scale mining company, yet I am given the ear of the Prime Minister,” Briggs reports.

The top-level meeting was not afforded any special fanfare or entourage, but centred, in an “honest and down-to-earth” way, on how the PNG government could help Harmony to better develop its promising new Wafi-Golpu gold/copper project.

Harmony, which is already producing Hidden Valley in PNG, has a 50:50 partnership with Newcrest of Australia to develop Wafi-Golpu, which is already bigger than the huge Grasberg copper/gold mine was at start-up.

“Yes, South Africa’s investment climate can be improved with a lot of transparency, openness and honesty,” he adds.

He says that the PNG government goes out of its way to facilitate good investment while at the same time remaining uncompromising about environmental protection and safety.

Hidden Valley will soon be producing 140 000 oz/y at a relatively low cash cost and Harmony anticipates smooth sailing in funding its $2-billion portion of the Wafi-Golpu in two to three years’ time.

Harmony executive director Mashego Mashego, who is in charge of government liaison, says that the challenges that arise in the company’s relationship with the South African government are being addressed.

Evander project potential

While Harmony, at the behest of its main shareholders, is keeping its powder dry for the funding of the Wafi-Golpu project, its Evander mine is continuing to display considerable future potential, with Evander South, Poplar, Rolspruit and Libra looming large on the project horizon.

“It’s got huge potential, and it’s a case of how to get the best out of Evander and with whose money,” Briggs says.

Evander has a life-of-mine of 11 years plus and to avoid any dip in production at the mine, a decision needs to be taken in the next two years on the projects that will be allowed to proceed, to allow a nine-year developmental build-up of a new operation.

Evander confirmed its turnaround in the three months to September 30 with a 13.9% increase in production to 854 kg, and a recovery grade that rose 22% to 6.94g/t. Cash costs remained stable at R208 597/kg.

September quarter

Although Harmony recorded its highest-ever R1.3-billion operating profit in the three months to September 30, it did so on a lower corresponding 2010-quarter production output.

The strength of the gold price was the overwhelming underpin for the 45% higher quarter-on-quarter profit and the company’s 217% headline-earnings-a-share rise to 95c.

While the gold price received increased by 20.3% to R396 405/kg in the September 2011 quarter from R329 536/kg received in the previous quarter, the rand price outlook is even more favourable at a current R420 000/kg.

Harmony is strongly leveraged to the gold price and the 20.3% increase in the rand gold price in the quarter saw the company’s operating profit rise 45%, making a positive R400-million difference quarter-on-quarter, and a R500-million revenue increase, Harmony CFO Hannes Meyer reports.

Harmony will also benefit in the current quarter from a lower electricity tariff.

The company wants to be producing at a rate of 1.8-million to two-million ounces of gold a year by 2015 and is expected to produce from 1.45-million ounces to 1.55-million ounces in the current financial year.

Harmony’s growth projects at Phakisa, Doornkop and Hidden Valley are expected to provide the production boost.

Tshepong had a lower 4.12g/t recovery grade owing to waste, which led to lower 1 183 kg production and Masimong had an even lower recovery grade of 3.43g/t and produced a lower 796 kg of gold in the three months to September 30.

Annual report

Integrated annual report 2016
Integrated annual report 2016

(HTML & PDFs)

Investor brief

Harmony Investor brief, Sep 2017
September 2017 -
Harmony Investor brief

(PDF - 6.5MB)

Register for alerts




Joomla Extensions powered by Joobi