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 (NYSE: HMY), South Africa’s leading gold miner by volume, said on Wednesday it will spend 7.9 billion rand ($410 million) to extend the life of Mponeng, the world’s deepest gold mine.
The company acquired the mine from AngloGold Ashanti four years ago. The new investment will extend Mponeng’s life from seven to 20 years, with work due to begin in 2025, it said.
Harmony also announced on Wednesday its financial and operating results for the six-month period ending December 31, 2023.
The miner saw a 14% increase in half-year gold production to 832,349 oz., up from 733,325 oz. during the same period in 2022. Output was buoyed by a 30% increase in production from Mponeng.
Harmony’s profit tripled to 5.96 billion rand in the final six months of 2023 compared to a year earlier. As a result, it will pay a record interim dividend of 147 rand cents per share.
Meanwhile, the group’s full-year 2024 production guidance remains unchanged at 1.38 to 1.48 million oz.
“While strong commodity prices have provided Harmony with good tailwinds, improved safety, good mining discipline and operational flexibility with a stable and a predictable cost structure, remain fundamental to creating the long-term value expected by our stakeholders,” said Peter Steenkamp, chief executive officer of Harmony.
Shares of Harmony Gold rose 1.1% by 11:30 a.m. in New York. The company has a market capitalization of approximately $3.5 billion.
