Harmony Gold Mining Co (NYSE:HMY) trying to re-harmonize its operations
On Wednesday, Harmony Gold Mining Co (NYSE:HMY) had attributed its net loss in the last financial year to labor disruptions and an impairment to the lower price of the yellow metal. The company also said that since gold prices have dropped, it is reassessing how it will now develop its gold mine in Papua New Guinea.
The company had reported a net loss of $240M (2.4B rand) in the 12 months that ended on 30 June from a 2.6B rand profit in the previous year. The gold output for the year totaled 1.14M troy ounces which were a 25 drop from 1.27M troy ounces that it stood at a year earlier. HMY said that it had to writedown $268M (2.7B rand) due to the drop in gold and silver prices as well as dismal production performance at the Hidden Valley mine
By output, Harmony is the 3rd largest gold producer in South Africa. It is developing Wafi-Golpu an entirely new gold mine located in Papua New Guinea. This is being developed via a 50:50 partnership with Newcrest Mining. Graham Briggs, HMY’s chief executive said that despite what the quality of the ore-body is, development of the Golpu in line with the pre-feasibility study of 2012, will not be able to deliver a sufficient amount or ROI, especially in the current market climate. This is exactly why it needs to be repositioned.
The company is re-strategizing on a large scale. It will be lowering capital-expenditure by R650M in the next financial year. This will help it gain some firm ground in the future. HMY has 37,000 employees. It produced 2% less gold or 1.14M ounces than the 1.27M ounces that were produced last year. This was primarily due to the strikes that took place in Kusasalethu. The gold production from most of its ther mines had also reduced.