Harmony Gold Mining is assessing the acquisition of new assets, including AngloGold Ashanti’s last underground operation in South Africa, as the company seeks to bolster growth and replace depleting reserves.
While gold output rose 17% in the year through to June, Harmony needs to find new capacity as the Masimong and Unisel mines in South Africa run out of commercially viable ore and a project in Papua New Guinea stalls amid regulatory challenges, said Chief Executive Officer Peter Steenkamp. The Mponeng mine being sold by AngloGold is one possibility.
“Mponeng is probably one of the many projects we are looking at,” Steenkamp told reporters on a conference call from Johannesburg.
The CEO said Harmony would invest in South Africa, even as its gold industry declines amid the geological challenges of exploiting the world’s deepest mines.
“Harmony will be operating in South Africa for a very long time,” he said. “We are not against any investment in South Africa provided it matches our criteria and we can make money out of it.”
Production in the last fiscal year was boosted by Moab Khotsong, a South African mine it previously bought from AngloGold, and its existing Hidden Valley operation in Papua New Guinea. Harmony expects its output to be little changed at 1.46 million ounces in the current financial year.
The company is looking at operations that produce more than 100 000 ounces a year at an average cost of $950 an ounce, Phillip Tobias, chief operating officer for new business development, said on the same call.
Steenkamp said there’s no timetable for when work will resume on the $5.4 billion Wafi-Golpu mine as he only expects talks about the project to restart once Papua New Guinea has finalised discussions with Total SA over its liquefied natural gas joint venture. The project has been in limbo since a new government, led by Prime Minister James Marape, swept to power in May pledging to get better resource deals for the country.
© 2019 Bloomberg L.P.