Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Harmony Gold Mining Company released its financial results on Monday for the quarter and the year ended 30 June 2011.
The company said headline earnings improved to R957 million, in comparison to R4 million in the previous year. Harmony recorded a net profit of R617 million (R192m in FY 2010) for financial year 2011.
The operations in the build-up phase showed an increase in gold production of 22%. Hidden Valley increased its production by 64% to 3 118kg,from 1 903kg produced in the previous financial year. Doornkop’s production increased by 562kg (29%), Phakisa’s by 391kg (29%) and Kusasalethu’s by 165kg (3%) on a year on year basis. Underground grade also increased to 4.60g/t.
Gold production for the year under review decreased by 9% – mainly as a result of the shaft closures during the 2011 financial year. Year on year cash operating costs in Rand terms increased by R686 million or 8%, mainly due to restructuring costs, the inclusion of Target 3 (which started commercial production in the past quarter), higher electricity costs and higher labour costs. This resulted in the cash operating cost in R/kg terms increasing by 16% from R195 162/kg in FY10 to R226 667/kg FY11. Rand per tonne unit costs remained stable at R469/tonne.
Read the full news release here.
