The mining giant says in a statement that Harmony was identified as the most suitable party to acquire their assets, which consist mainly of Mponeng mine in South Gauteng - considered the world’s deepest mine. This is due to Harmony’s “financial capacity and proven technical capability in operating ultra-deep, hard-rock mining assets in South Africa”.

Harmony has been quite tight-lipped on the deal, with Chief Financial Officer (CFO) Boipelo Lekubo responding cautiously on the matter, first listing Harmony’s current list of priorities which include repaying their debt, before declining to comment further on the matter when speaking to OFM News on Tuesday.

Due to its depth, the Mponeng mine is being viewed as somewhat of a risk, requiring billions of Rands in investments to extend its lifespan. It is this risk that prompted AngloGold Ashanti to sell its remaining assets in the country to focus on its more profitable operations elsewhere. The other assets include “mine waste solutions, the mine waste retreatment operation, and a surface rock dump processing business,” says AngloGold.

The announcement comes on the back of the release of Harmony’s glowing financials for the six month period ending on 31 December 2019, which revealed the company has returned to profit, with revenue going up by 12%, mainly due to a higher gold price. Lekubo says the average gold price increased by 19%. “We’re very satisfied with our performance in the first half of the financial year. We continue to have good momentum at our operations, obviously with the exception of Kusasalethu. Our production was down 8% for the comparative reporting periods, but steady for the six months if you look at December 2019 as compared to June 2019.”

The Harmony Gold CFO says they’ll continue exploring acquisition opportunities, not only in South Africa but in the rest of Africa and Papua New Guinea, only if those opportunities support their ongoing strategy of “increasing their margins” through safe mining.

It appears this latest acquisition does support this very strategy albeit presenting its own challenges.

OFM News