Harmony logo Annual Report 2009 Annual Report 2009



Masimong’s contribution to production in FY09 Masimong location [SA map]


Located in the Free State, near Riebeeckstad, Masimong consists of an operating shaft – 5 shaft – and 4 shaft which, although closed, is used for ventilation, pumping and as a second outlet. Ore mined at Masimong is processed at the Harmony 1 Plant some 23 kilometres away. Masimong (formerly Saaiplaas) was purchased in September 1998 from AngloGold Ashanti Limited.

Conventional drill, blast and scraping mining operations are focussed on the Basal and B-Reef at Masimong. The shafts are intermediate in depth, extending to around 2 300m.

In FY09, Masimong employed 3 046 people – 2 949 employees and 117 contractors.

Mineral resources and ore reserves

At the end of June 2009, Masimong reported ore reserves of 0.984 million ounces of gold and mineral resources of 28.105 million ounces. The operation’s expected life-of-mine is 12 years. See the mineral resources and ore reserves section (PDF - 126KB) for more detail.

MasimongMineral resourcesOre reserves
 MeasuredIndicated InferredTotalProven ProbableTotal
Oz (000)3 4013 12821 57628 105751233984
Tonnes (Mt)14.014.9100.3129.
Grade (G/t)7.556.516.696.765.205.275.22


Regrettably there were two fatalities at Masimong during the year (FY08: one). The FIFR, at 0.27 per million hours worked, reflected this disappointing performance (FY08: 0.12). The LTIFR, however, declined by 9% to 8.67 per million hours worked (FY08: 9.57).

Masimong FIFR (per million hours worked) [graph]
Masimong LTIFR (per million hours worked) [graph]

Masimong key statistics:

Volumes milled000 t (metric) 890809974
 000 t (imperial) 9818921074
Gold producedkg 4 7913 6214 559
 oz 154 034116 424146 575
Average gradeg/t 5.384.484.68
 oz/t 0.1570.1310.136
RevenueR million 1 215698681
 US$ million 1359695
Cash costsR/kg 137 598175 593125 689
 US$/oz 476756543
Cash operating profitR million 5546185
 US$ million 62813
Capital expenditureR million 130114109
 US$ million 141615

Masimong key quarterly indicators: FY09

Tonnes (000) [graph]
Grade (g/t) [graph]
Gold produced (kg) [graph]
Cash cost (R/kg) [graph]
Cash profit (R000) [graph]

The year in review

The restructuring programme which began in FY08 at Masimong has taken this operation from the brink of closure to being among the lowest-cost-per-kilogram-producers in the Harmony stable. This restructuring included management positions, as well as the termination of continuous operations. Masimong is now a steady-state operation, although further improvements in efficiencies are envisaged.

Volumes improved by 10% to 890 000 tonnes in FY09. This was despite a fire in the B reef area and ventilation incidents relating to illegal mining activities. Damaged ventilation seals in the disused 4 shaft area caused major airflow problems at 5 shaft, particularly in the third and fourth quarters, and repairs are likely to be effected by December 2009. A booster fan will be installed between 4 and 5 shafts to partially address this ventilation issue.

A focus on training (People Transformation Project), in which all production crews received training on safety and health, business awareness, productivity improvement and team-building, presented positive results. Productivity improved noticeably, by 24% from 21 t/TEC/month to 26 t/TEC/month, and by 48% from 94 to 139 g/TEC/month.

Supervisory training, specifically aimed at front line supervisors, was also completed during the year.

An infrastructural upgrade involving tracks, locomotives, refrigeration, ventilation and compressors was recently begun and will continue in FY10.

Steps were also taken to improve ore reserve management and quality mining on the Basal Reef stopes. Good grades achieved from the B reef further contributed to the overall improvement in grade from 4.48 g/t to 5.38 g/t. Cash costs declined by 22% year-on-year to R137 598/kg (US$476/oz). This is a remarkable achievement, given the increases in electricity prices, and labour and consumable costs.

Cash operating profit rose to R554 million from R61 million (US$62 million from US$8 million). Capital expenditure, mainly spent on refrigeration infrastructure, was R130 million (US$14 million).


The restructuring currently under way is scheduled to be completed in FY10 and the benefits in terms of further increases in productivity, greater output and improved efficiencies/performance will be seen. Tonnes milled are expected to rise to 1 million tonnes per annum, although the grade is expected to decline to around 5 g/t. Grade will recover in FY11 and FY12. Cash costs** are expected to be in the region of R134 000/kg (US$540/oz). Gold production is expected to be in the order of 4 900 kilograms (158 000 ounces).

Capital expenditure** of R238 million (US$31 million) is planned for FY10 – R110 million (US$14 million) on on-going development, R24 million (US$3 million) on major equipment maintenance and R104 million (US$13 million) on other shaft capital.

*  Please refer to the forward-looking statements (PDF - 54KB)

** June 2009 money terms. The exchange rate as at 30 June 2009 of R7.72/US$ has been used for all forward-looking conversions.

 Masimong: Five-year production profile [graph]
Harmony Annual Report 2009