KEY POINTS
- Harmony will fully benefit from gold prices.
- MWS’s cash flow to grow by $56.18 million.
- Kareerand TSF expansion to extend mine life.
Now that Franco-Nevada and Mine Waste Solutions (MWS) have finalized their streaming deal, Harmony Gold will fully benefit from rising gold prices.
Harmony to benefit from rising gold prices
This coincides with the completion of Phase 1 of the Kareerand tailings retreatment facility (TSF), a 15-year, high-margin gold recovery project, which was finished on time and within budget.
Assuming the current gold price, MWS’s free cash flow is expected to grow by over R1 billion annually. The project is also driving environmental, social, and governance (ESG) improvements in the Vaal River, Stilfontein, Orkney, and Klerksdorp areas.
The Kareerand TSF expansion has increased storage capacity, allowing ongoing re-mining of old tailings and extending MWS’s life-of-mine to 2040. Built according to global tailings management standards, the 900-hectare facility is part of Harmony’s retreatment operations.
Now that the contract has ended, MWS’s average gold price will align with current market prices, replacing the previous arrangement where 25% of MWS’s gold went to Franco-Nevada at a fixed price.
Construction of reclamation and pumping stations at tailings storage facilities (TSFs) 4 and 5 is complete, and they have been operational since August, retreating 14 historic tailings sites. Phase 2 of the Kareerand TSF project, which will focus on infrastructure for tailings deposition, is set to be completed by the end of 2025.
MWS focuses on ESG and local communities
According to Mining Weekly, MWS is also incorporating ESG principles, especially in reducing environmental impacts and benefiting local communities. Harmony CEO Peter Steenkamp noted that the company has moved tailings away from nearby communities and is rehabilitating the affected areas.
Socially, the project has had a positive impact, with 30% of contractor costs going to local businesses. The 15-year extension of MWS’s operations has also created 2,400 jobs, 1,700 of which were filled by locals.
MWS plans to add a fourth tailings stream, boosting daily processing capacity from 78,000 to 86,000 tonnes. The expanded Kareerand TSF will support this, raising annual gold production to 110,000 ounces through 2040.
Harmony is also preparing to start construction on a 100-megawatt renewable energy facility that will provide power to MWS and Harmony’s Moab Khotsong gold mine. The project is expected to break ground soon, with all contracts in place.
Harmony has allocated R2.3 billion to the TSF extension, which is expected to pay for itself within three years.
