Skip to content skip to secondary navigation Top of the page

and events

Media coverage

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.

SAFM: Special Report Podcast: Graham Briggs – CEO, Harmony

Publication: Money Web

Graham Briggs talks second quarter and half year results.

Listen to the SAfm Market Update


GEOFF CANDY: Hello and welcome to this Newsmaker podcast, my name is Geoff Candy and joining me, in Cape Town, is Harmony CEO, Graham Briggs, and new financial director, Frank Abbott. Graham, Harmony released its second quarter and half year results this morning, some of the key highlights include record operating profit of R2.1bn, headline earnings up to R1bn and a 13% increase in recovery grade. Let’s talk about those grades because there were some sharp increases across the mines, what was the reason for that jump?

GRAHAM BRIGGS: A lot of hard work from a lot of people on the mines obviously but really what you also see is that last quarter we underperformed a bit on grade, so you do see a little bit of an exaggeration. The tendency is up and that was planned and so this year we’ve got a plan of somewhere around 4.8 to 4.85 gram a ton on our underground operations and it looks like we’re pretty well in line with that. So no planned but also a lot of hard work from the guys on the operations.

GEOFF CANDY: How sustainable is this uptrend in grade?

GRAHAM BRIGGS: Oh no it’s sustainable, our grade is increasing as well, remember that in a build-up in production and we’ve got several mines in build-up, we’ve got obviously Kusasalethu, we’ve got Target 3 as an example, Phakisa, Doornkop. When you’ve got a developing mine like that you have a dilution effect because you have the ratio of tonnage coming out of the ore, which is the stopes and the development in the slightly the wrong way round. So you need to get to full production before you get the balance right, so yeah, the grades are going to improve even beyond this, ja.

GEOFF CANDY: And clearly this has an impact on costs because as your grades improve your costs come down somewhat and…

GRAHAM BRIGGS: Rand per kilogram cost will come down as your grade improved, ja. Obviously total cost; a different picture. Ja and really that’s probably where Harmony has been. Harmony is always seen to be the high cost producer, part of the story behind that is that Harmony has really been the lower grade producer and so that’s the history of Harmony. Everything that we’ve been planning and doing for the last few years is planning to reverse that and so we are one of probably the few companies that is planning an increase and improvement in grade into the future.

GEOFF CANDY: And it’s a great place to be as gold prices increase.


GEOFF CANDY: Graham, if we look at the other side of the cost issue or the other side of the cost coin, there are a number of issues including things like electricity, are there any particular cost points that you’re concerned about?

GRAHAM BRIGGS: No, not really, I think, again, the guys have done excellent work on electricity. I think since 2008 we made some dramatic cuts in our electricity and I’m talking about kilowatt hours now and not cost because a 25% increase is difficult to counter those increases. But there’s always work to be done, there’s always something new, especially in the technology side that one can do things a little bit differently that improve the situation. So one has to continue working on those things and this is where the engineers are focused on, so a lot of the easy stuff is done, it’s now sort of doing the more difficult and tweaking a few things and that will help on the efficiency side of electricity use. Obviously the gross bill in electricity is still very high and that is a big cost effect on our total costs.

GEOFF CANDY: One of the big macroeconomic unknowns at the moment is the price of oil and clearly it has broader economic implications but how would it affect you? How would an increase in oil prices affect Harmony, if at all?

GRAHAM BRIGGS: Well, in South Africa we’re sort of fairly insensitive to that. One of our operations, which would be Kalgold open pit, is somewhat more sensitive to oil prices and really diesel prices. Obviously international operators that operate a lot of equipment or diesel generation that’s where you’re affected more. So Hidden Valley would, as an example, be affected by an increase in oil prices quite dramatically but in South Africa really quite a low effect on oil prices. I don’t know how that’s going to change the international costs, dollars per ounce type of thing but surely there will be an effect if high oil prices continue to do what they’ve been doing.

GEOFF CANDY: Graham, if we look at the South African ops in particular and now, as we mentioned, significantly higher grades, Kusasalethu did have a problem with safety stoppages and that did impact production at the mine, what’s the outlook at Kusasalethu for the rest of the year?

GRAHAM BRIGGS: It’s unfortunate in that when Kusasalethu does have a safety event it obviously affects the whole mine. A safety stoppage, per say, is not a problem, a fatal is certainly a problem, it has a morale effect, it has all sorts of effects. So Kusasalethu has had an admirable safety improvement over the years. If you go back to 2007 and you remember that was with the big publicity of mining safety, it’s improved dramatically since then. So it’s doing much better on safety, the fall of ground instance, the seismic effects are much better managed these days than they have been in the past. But those are the sort of fundamentals of the things that are in place at Kusasalethu, better mining practices, better support practices, better procedures and standards. The mine will, in my mind, achieve its projections, so ja.

GEOFF CANDY: Tshepong and Doornkop particularly strong increases in the grade, where is that at a sustainable level or how sustainable is that kind of increase going forward?

GRAHAM BRIGGS: Ja, I think Tshepong is probably slightly above where we were planning it to be but those sort of issues you do get the changes quarter on quarter but it’s around about the level that it should be because it’s basically in steady state. Doornkop is still building up and therefore the Doornkop grades will go through a general improvement in time. It may have quarters, which take a dip, if we get to the end of this quarter and Doornkop’s grade’s down a bit there’ll be good reasons for it if you look at the production and the development and so on and so forth. So it wouldn’t surprise me in a build-up that you get those changes but generally the curve is going in the right direction If Mariaan were to draw you the longer term of Doornkop grade, you’ll see the graph is going in the right direction, ja.

GEOFF CANDY: Talking about some of the ops that are now discontinued or that you’re selling, I’m thinking particularly of Evander now, you mentioned during the conference call with Wits Gold and Pan African that with enough work it could be – in your hands – it’s about an eight year operation, with work and with focus that the two consortiums could bring to it, it could be as high as a 50 year mine. How much work would it take to get to that or what’s going to be needed to go into it?

GRAHAM BRIGGS: Ja, I think the plan in Evander is for a mine life that actually just exceeds ten years, so that’s the eight shaft plan. It is a plan which has unfortunately got bottlenecks to it, so you can’t dramatically improve the tonnage coming out of eight shaft. The shaft actually capacity is fine, it’s actually the declines down to the working levels. So it needs a capital injection but it’s got some great projects, it’s got Evander South, not very high grade but quite a shallow project, it’s got Poplar, Poplar is sort of a medium depth, I think it’s probably average depth, somewhere around 800 metres or so below surface, so that’s fairly shallow in South African terms these days and I think that’s probably closer to five grams a ton or so. Then it’s got Rolspruit, which is very much deeper, it’s basically the extension of the eight shaft pay shoot. Then one other project it’s got is Project Libra, which is really a tailings operation. Now all of those projects, I should imagine, in the hands of the new owners will go through a process of looking at the study, doing feasibility studies and choosing one to go forward first and maybe if there’s enough money they can do more than one first. If you look collectively at those projects the most expensive is the deepest one, which is Rolspruit and probably the most easiest one to do is the shallow one and that would probably be somewhere around, I don’t know, maybe R3bn to get that mine going and obviously it’s a fairly long lead time. But that’s the sort of thing that would’ve competed with our spending money on Wafi-Golpu and that’s really the reason behind it. In our hands it was going to be a mine that lasted just more than ten years but with significant resource potential. In the new owner’s hands it’s a mine life that’s going to last ten years but invest more and it could be a heck of a lot longer. 

GEOFF CANDY: Let’s talk about Wafi-Golpu because clearly that’s where a lot of your focus as Harmony is going to be going forward. Newcrest have put out some drill results, the market didn’t really react to them too much but how are things looking there?

GRAHAM BRIGGS: Very good, very good, it’s obviously a huge technical problem getting that much information about an ore body like this, it’s a big ore body, drilling takes a long time, you’re drilling boreholes nearly two kilometres long and the rocks are not easy to drill through and so on. So collecting information from that point of view is quite problematic but is making progress and it hasn’t disappointed us in the shape of the ore body. In fact, it’s been growing a bit, so it’s very close to the resource outline that we’ve been showing in the past. So there’s no disappointment on that side. At the same time all the technical studies on metallurgy and infrastructure and so on, all of those are continuing. So a lot of hard work going on out there and it’s incredibly busy on site, I can tell you that. So ja and the two companies are focused on achieving a good feasibility outcome but it’s a good ore deposit and obviously that’s what drives the keenness on this deposit.

GEOFF CANDY: Any concerns or any potential problems on the horizon or is it smooth sailing at this stage?

GRAHAM BRIGGS: If only a project like this is going to be smooth sailing, no, it’s not going to be smooth sailing; it’s going to be a rough ride for a lot of guys and a lot of people. There are going to be technical issues and there are going to be local communities that get upset with us or have a different perception of what’s happening. No, it’s going to be a rough ride but that’s part of building a mine, you’ve got to look at the whole picture, you’ve got to bring all the parties on side, you’ve got to bring the Department of Environment, Department of Mines, Treasury, all those things have to be…you have to get them all aligned. No, not for one minute am I going to pretend that this is going to be a walk in the park and I can delegate it to somebody else to do, it’s going to take a lot of delegation from a lot of people to get everything aligned, there’s no doubt about it. But it’s a good project and therefore we’ve got some very good people on site, we’ve got some very good people in our Brisbane office, we’ve got great partners and I think it’s going to be a great project but it’s going to go through a few bumps, there’s no doubt.

GEOFF CANDY: Graham, just in terms of the macroeconomic side of things, the gold price has started to rise again after the drop in the fourth quarter, how do you see things going in terms of the gold price, the fundamentals seem, at least in my view, to not really have changed much in the last few months.

GEOFF CANDY: Graham Briggs is the CEO at Harmony Gold and that’s it for this Newsmaker podcast. From me, Geoff Candy, thanks for listening and please join us again.

Podcast: Graham Briggs – CEO, Harmony


Annual report

Integrated annual report 2016
Integrated annual report 2017


Investor brief

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

(PDF - 6.5MB)

Register for alerts