Harmony’s safety plans delay full Moab benefit

The immediate benefits of the inclusion of the Moab Khotsong mine in Harmony Gold’s SA asset base have not been realised as the company takes pains to raise the mine’s safety standards.

Harmony took ownership of Moab Khotsong near Orkney, in the Free State, in March, paying AngloGold Ashanti $300m for the mine, its sister Great Noligwa shaft and tailings.

The recovered grade at Moab Khotsong dipped in the September quarter as management took steps to shore up underground safety and it expects the grade to return to 10g/ton from 8.44g/ton in the first quarter of Harmony’s 2019 financial year.

With the mine delivering gold as it should, this will be an important source of cash for Harmony, which needs to find about R21bn to fund its half of the Wafi-Golpu gold and copper mine in Papua New Guinea.

Moab Khotsong is the biggest in the Harmony stable and a critical addition to its fleet of older mines that CEO Peter Steenkamp has flagged for closure in the next few years.

The underground pillars left at Great Noligwa promise to be another source of gold for Harmony, which prides itself on its ability to extract the gold from these support structures.

Mining pillars, which essentially hold up the ceiling of tunnels and working areas, is a risky business. Harmony will have to tread carefully and ensure maximum safety for any efforts in this regard to avoid perpetuating the perception that gold mining is an inherently dangerous business in which fatalities are unavoidable.

It has been a steep learning curve for private education and (more recently) retirement village developer Pembury Lifestyle Group.

The company seemingly misread the market’s willingness to back an attempt to replicate the Curro and Advtech success stories, and the share price slunk south in a hurry. Then Pembury stumbled early in its delivery stride, getting suspended from the JSE for not delivering its financial results timeously.

Now worried shareholders will read of an attempt to liquidate Pembury over a debt that is no more than petty cash.

The company, however, claims it has incorrectly been cited as owing about R484,000 to Artificial Grass.

The bill was for work carried out at two of Pembury’s schools, PLG Willow View Academy and PLG Raslouw Academy.

Pembury maintains the work was contracted by Kygoway, the company that does the construction work for the schools and retirement villages.

In any event, a dispute has arisen between Artificial Grass and Kygoway around the quality of the workmanship.

Pembury reckons Artificial Grass has applied for the liquidation of the group as a means of enforcing payment of a debt due by Kygoway.

Pembury stresses it is not a party to the disputed transaction and has not been invoiced by Artificial Grass.

While this seems to suggest that Artificial Grass’s claim is spurious, what Pembury does not mention in its Sens announcement on Tuesday is that Kygoway is a related party. According to the last set of interim results, Kygoway and Pembury have common directors and shareholders.

Surely this little matter could have been easily resolved before things got nasty, if only to placate already jittery shareholders?