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Harmony 'not blind' to power debate

Source: I-Net Bridge

Harmony Gold Mines, South Africa's third largest gold producer, on Monday said it was not blind to 'rumbles' out of South Africa that threatens the attainment of objectives "particularly the outrageous power price increases and that old chestnut, nationalisation of the mines."

"Nor are we complacent. We will continue to engage in robust, constructive debate on these and other issues concerning ourselves and our industry, with a view to securing the best possible outcomes for all our stakeholders," said Harmony CEO Gram Briggs.

South African gold producers have warned of the consequences of power utility Eskom's request for a 35% tariff hike over each of the next 3 years.

They have warned that the tariff hikes if granted could shut down mines and lead to job losses.

In the meantime, the country's alliance partners are engaged in a debate of the nationalisation of the country's mines.

While South African mines minister Susan Shabangu said last week that nationalisation would not happen in her lifetime, calls from the ANC Youth League for the government to seriously consider the option have grown louder.

Mining companies have in the meanwhile had to make investment decisions despite this uncertainty.

Harmony, like all of the industry's players, has had to restructure its operations for profitability.

The company on Monday reported December quarter headline earnings per share (HEPS) of 49 cents for the 3 months to end December 2009 compared to a headline loss of 12 cents per share reported for the 3 months to end September 2009.

But HEPS for the first half of its 2010 financial year were down 64.8% to 37 cents from 105 cents for the same six months the year before.

Production was down 1.2% quarter-on-quarter and for the half year with December quarter production coming in at 371 956 ounces and first half production at 748 555 ounces mainly due to restructuring.

Briggs also warned that there could be "more pain before gain" on the production front as Harmony continued to assess those of its South African operations with depleted ore bodies in the company's pursuit of 2.2 million profitable ounces by 2012.

Harmony closed the Evander 7 shaft in South Africa's Mpumalanga province and Brand 3 Shaft in the Free State during the December 2009 quarter and the Evander 2 and 5 shafts last month, redeploying most of the affected employees to its new growth projects.

Briggs said that, while the Merriespruit shafts in the Free State appear to have remaining potential, provided they meet their production targets, the Harmony 2 Shaft, also in the Free State, would continue to be closely monitored.

Looking ahead, Briggs said restructuring would continue.

Annual report

Integrated annual report 2016
Integrated annual report 2017


Investor brief

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

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