SA rand  US dollar
20092010Figures in million20102009


Commitments and contingencies

   Capital expenditure commitments  
248128 Contracts for capital expenditure1732
230207 Share of joint venture's contract for capital expenditure2730
7341 006 Authorised by the directors but not contracted for13295
1 2121 341 Total capital commitments176157
   This expenditure will be financed from existing resources and where appropriate, borrowings.  
   The group is contractually obliged to make the following payments in respect of operating leases, including for land and buildings, and for mineral tenement leases:  
4028 Within one year45
109 Between one year and five years11
5037  56
   This includes R7 million (US$0.9 million) for the MMJV. For details on the group’s finance leases, refer to note 29.  
   Contingent liabilities  
2525 Guarantees and suretyships33
301513 Environmental guarantees (i)6739
326538  7042
Included in the balance for the 2010 financial year is an amount of R130 million (US$17.0 million) (2009: R130 million (US$16.8 million)) relating to guarantees provided for the Rand Uranium transaction. These guarantees will be cancelled once Rand Uranium puts its own guarantees in place. R112 million (US$14.6 million) has been pledged as collateral for environmental guarantees in favour of certain financial institutions for 2010 and 2009 financial years. Refer to note 18.
Class action: On 18 April 2008, Harmony Gold Mining Company Limited was made aware that it had been named or might be named as a defendant in a lawsuit filed in the U.S. District Court in the Southern District of New York on behalf of certain purchasers and sellers of Harmony’s American Depository Receipts (ADRs) and options with regard to certain of its business practices. Harmony has retained legal counsel.
   During January 2009, the plaintiff filed an Amended Complaint with the United States District Court (Court). Subsequently, the company filed a Motion to Dismiss all claims asserted in the Class Action Case. On 19 March 2010, the Court denied the company's application for dismissal and subsequently the company filed a Motion for Reconsideration in which it requested the Court to reconsider its judgement. This matter was heard on 27 April 2010 and the company's request for reconsideration of judgement was denied. The company is defending the matter and the legal process is taking its course. It is currently not possible to estimate if there will be a financial effect, or what that effect might be.
  (b)The group may have a potential exposure to rehabilitate groundwater and radiation that may exist where the group has and/or continues to operate. The group has initiated analytical assessments to identify, quantify and mitigate impacts if and when (or as and where) they arise. Numerous scientific, technical and legal studies are underway to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The group has instituted processes to reduce future potential seepage and it has been demonstrated that monitored natural attenuation ((MNA) by the existing environment will contribute to improvement in some instances. The ultimate outcome of the matter cannot presently be determined and no provision for any liability that may result has been made in the financial statements.
  (c) Due to the interconnected nature of mining operations, any proposed solution for potential flooding and potential decant risk posed by deep groundwater needs to be a combined one, supported by all the mines located in these goldfields. As a result, the Department of Mineral Resources and affected mining companies are involved in the development of a Regional Mine Closure Strategy. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.
  (d)On 1 December, 2008, we issued 3 364 675 shares to Rio Tinto for the purchase of Rio Tinto’s rights to the royalty agreement entered into prior to our acquisition of the Wafi deposits in PNG. The shares were valued at R242 million (US$23 million) on the transaction date. An additional US$10 million in cash will be payable when the decision to mine is made. Of this amount, Harmony is responsible for paying the first US$6 million, with the balance of US$4 million being borne equally by the joint venture partners.
  (e)In terms of the sale agreements entered into with Rand Uranium (refer to note 14), Harmony retained exposure to environmental liabilities (excluding rehabilitation liabilities) relating to environmental disturbances and degradation caused by it before the effective date, in excess of R75 million (US$10 million) of potential claims. Rand Uranium is therefore liable for all potential claims up to R75 million (US$10 million). The likelihood of potential claims cannot be determined presently and no provision for any liability has been made in the financial statements.