South Africa’s Harmony Gold (JSE: HAR) (NYSE: HMY) is mulling the acquisition of new assets to sustain growth and replace capacity currently coming from its Masimong and Unisel mines, which are running out of ore.
Delivering full-year results, the company’s chief executive officer, Peter Steenkamp, said that South Africa remained its main investment target, even as its gold industry is facing mounting challenges, including geological and safety aspects of extracting ore from the world’s deepest mines.
“Harmony will be operating in South Africa for a very long time,” Steenkamp said on a media call. “We are not against any investment in the country, provided it matches our criteria and we can make money out of it.”
Steenkamp revealed that the Mponeng mine, AngloGold Ashanti’s (NYSE: AU) (JSE: ANG) last underground operation in South Africa, was among the many projects the company was looking at.
The Randfontein-based miner also said it would delay and revise its planned work at its Papua New Guinea Wafi-Golpu mine, a joint venture with Australia’s Newcrest Mining (ASX: NCM).
Permitting of the $5.4-billion gold and copper project has been stalled since May, when Papua New Guinea elected new Prime Minister James Marate. Since assuming the post, the former finance minister has downplayed his nation’s vast mineral wealth, declaring that the country’s economic future lies in becoming the food bowl of Asia, and not in being a source of raw minerals.
In the latest indication of PNG’s intention of “taking back” its mineral resources, the government said on Monday it wanted a larger share of the Porgera gold mine as part of lease-renewal talks, diluting the ownership of partners Barrick Gold and Zijin Mining.
In terms of results, Harmony’s total gold output jumped 17%, which resulted in an R6.5 billion (about $420 million) production profit. The purchase of Moab Khotsong from AngloGold Ashanti and the reopening of Hidden Valley mine in PNG generated R1.35 billion (roughly $88 million) of Harmony’s operating cash flow.
The company has not declared a dividend since 2017.