Annual Report 2010 Annual Report 2010


Contribution to group production – FY10

Contribution to group production – FY10
Map of South Africa indicating the location of Kalgold


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

Kalgold employed 480 people – 230 employees and 250 contractors – in FY10.

Detailed information on the Kalgold’s resources and reserves are available in the Mineral resources and mineral reserves section of this annual report.


There were no fatalities at Kalgold in FY10 while the LTIFR for the year was 1.49 per million hours worked compared to 2.94 in FY09.

More detailed information on safety performance and Harmony’s sustainable development concerns in South Africa can be found in the online Sustainable Development Report. A summary of this can be found under Harmony and sustainability.

Kalgold key statistics
Volumes milled000t (metric)1 7001 5421 530
 000t (imperial)1 8731 7001 687
Gold producedkg1 5262 0152 869
 oz49 06364 78492 229
Average gradeg/t0.901.311.87
RevenueR million390512557
 US$ million515777
Operating cost*R/kg182 215146 31494 312
Operating profitR million116220279
 US$ million152539
Capital expenditureR million111010
 US$ million111
Number of employees  
    Employees 230
    Contractors 250
    Total 480
HDSAs in management**%63
Women in mining**%13
Expenditure on training and developmentR million1
No. of fatalities 0
LTIFRper million hours worked1.49
Energy used000MWh77
Water used for primary activities000m32 337
GHG emissions000t CO2e65
Expenditure on local economic developmentR million1
Status of mining rightNew order mining right granted
in December 2007

* Includes royalty payment in FY10

** Indicator reported in terms of the MPRDA and the South African Mining Charter

Operations review

Kalgold performed in line with expectations in FY10. Volumes processed rose by 10% to 1.7Mt as planned.

Gold production declined by 24% to 1 526kg (49 063oz), a result of the planned decline in grade to 0.90g/t as operations at the high-grade D Zone pit came to an end in March 2009. The sulphide material, which does not present the same problems as the oxidised material, is now being mined at the lower-grade Watertank pit. Mining at the A zone pit, where grades will be similar to those at the Watertank pit, is scheduled to start in 18 months’ time.

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

Financial review

Despite the lower level of production and cash costs of R182 215/kg (US$748/oz), Kalgold reported an operating profit of R116 million (US$15 million). Capital expenditure for the year was R11 million (US$1 million), spent mostly on the maintenance of major equipment. Productivity levels at Kalgold in FY10 were 331g/TEC, the highest in the group.


Mining will continue in the Watertank pit during the next year and volumes and grade are expected to be in line with those reported in FY10.

Tonnes milled annually will remain stable at around 1.7Mt. An average recovered grade of 0.74g/t over the life of mine will not vary significantly. Annual gold production should therefore be around 1 226kg (39 400 ounces). Cash costs** are expected to be in the region of R216 500/kg in FY11 (US$883/oz), partly due to increased contractor costs resulting from the deeper pit design.

Total capital expenditure** planned for FY11 is R67 million (US$9 million). This will mainly be spent on the upgrade of old plant equipment so as to improve availability.

* Please refer to the forward-looking statements

** June 2010 money terms. The exchange rate of R7.63/US$ as at 30 June 2010 has been used for all forward-looking conversions.