Harmony Gold, a key player in the mining industry, has recently announced a significant R7.9-billion investment to extend the life of its Mponeng gold mine in South Africa’s Gauteng province. This strategic move is set to expand the mine’s operation from seven to an impressive 20 years, solidifying Mponeng’s position as a cornerstone asset for Harmony Gold until at least 2044.
The announcement came on the heels of Harmony’s exceptional half-year financial performance, which saw the company not only posting strong earnings but also declaring a record interim dividend. “Mponeng is an incredible mine with existing world-class infrastructure,” Harmony CEO Peter Steenkamp shared with enthusiasm during the financial results presentation.
The journey to this pivotal decision began in 2020 when Harmony acquired Mponeng from AngloGold Ashanti. Since then, the company embarked on an extensive review of the mine’s feasibility study, aiming to ascertain the possibility of extending its operational life. The outcome? A resounding success. Harmony now boasts an optimized mine design that promises safe and profitable operations for the extended period.
Financing for the Mponeng project will come directly from Harmony’s own coffers, relying on internal cash flows to cover the substantial capital investment required. Harmony’s Financial Director, Boipelo Lekubo, detailed the funding strategy to Mining Weekly, expressing confidence in Mponeng’s ability to generate sufficient operating cash flow to support the project. “This makes the project affordable,” Lekubo noted, highlighting the financial viability of the life-extension endeavor.
This ambitious project aligns perfectly with Harmony’s investment criteria, complementing other ongoing extension initiatives at the company’s Moab Khotsong gold mine, Mine Waste Solutions tailings project, and the Hidden Valley mine in Papua New Guinea. Mponeng’s two high-grade ore bodies, the Carbon Leader and the Ventersdorp Contact reefs, are set to deliver an impressive average steady-state production of 260,000 ounces of gold annually once the project is in full swing.
The anticipated completion of the project will not only boost Harmony’s annual cash contribution by about R2.5-billion but also promises an attractive cost profile, with all-in sustaining costs estimated at R768,000 per kilogram of gold. This project is poised to further Harmony’s goal of converting its extensive mineral resources into valuable mineral reserves, ensuring the company’s production profile remains robust for years to come.
Peter Steenkamp emphasized the broader impact of the Mponeng project, stating, “We’re proud that, in our hands, Mponeng will reach its true potential and deliver significant positive social impact.” This initiative underscores Harmony’s commitment to generating long-term value for both shareholders and stakeholders alike, leveraging the company’s expertise and deep understanding of its ore bodies to unlock further potential.
With a foundation strengthened by strong commodity prices, operational excellence, and a stable cost structure, Harmony Gold is on track to continue its trajectory of growth and value creation. The recent half-year results have already demonstrated the company’s operational prowess, with record operating free cash flow and an increase in underground recovered grades. As Harmony Gold looks to the future, the Mponeng life-extension project stands as a testament to the company’s strategic vision and its unwavering commitment to sustainability, operational efficiency, and community impact.
