Harmony reports continued losses

HARMONY Gold is the third major South African gold miner to report losses in the March quarter‚ prompting it to announce the restructuring of three large mines in South Africa and Papua New Guinea.

Harmony posted a narrowing net loss of R263-million compared with a loss of R856-million in the December quarter and a R31-million profit in the March quarter last year.

However‚ looking at the nine months to end-March‚ the net loss stood at R1.38-billion compared with a R47-million loss in the same period in the previous year.

“We have responded to a lower gold price – first by rationalising our assets and then restructuring our portfolio – cutting costs‚ reducing labour numbers and focusing on mining only safe‚ profitable ounces‚” Harmony CEO Graham Briggs said.

Harmony has cut about 3 000 jobs in the past year and will cut 400 more jobs from its Masimong mine in the coming months as part of the restructuring of three mines‚ including Doornkop in South Africa and Hidden Valley in Papua New Guinea.

Gold production in the March quarter fell to 245 697oz from 271 963oz in the previous quarter‚ with year-end holidays and safety stoppages affecting production.

The Kusasalethu mine was restructured during the March quarter.

The mine is forecast to produce between 170 000oz and 180 000oz in the 2016 financial year starting on July 1 at a total cash cost of about R400 000/kg.

Harmony could not afford the wage increases that unions had been speaking about ahead of wage talks due to start in the coming weeks‚ Briggs said.

Gold mining companies have long spoken about the need to address declining productivity as part of wage settlements. – BD Live