HomeBusiness and policyHarmony's path to South Africa's largest gold producer on track

Harmony’s path to South Africa’s largest gold producer on track

Harmony’s intention to acquire the last of AngloGold Ashanti’s assets in South Africa for US$300 million was announced in February 2020.

The transaction, which will officially entrench Harmony’s position as South Africa’s largest gold producer.

The transaction is well advanced and the only conditions precedent that remain outstanding to conclude the acquisition are those related to the rectification and approval for the transfer of the mining rights in respect of the West Wits mines (Mponeng and Mine Waste Solutions) from AngloGold Ashanti to Harmony by the Department of Mineral Resources and Energy in accordance with the MPRDA.

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Expected impact on headline earnings due to derivative and foreign exchange losses

The year-on-year weakening of the Rand against the US dollar negatively impacted on the translation of Harmony Gold’s US dollar facility, while also affecting the valuation of the foreign exchange derivatives.

The increase in the gold price – both in US dollar and in Rand terms – negatively impacted on the valuation of the gold hedges.

As such, it is expected that these changes may have an impact on the Company’s headline earnings.

The group continues to enjoy favourable commodity and foreign exchange pricing on the unhedged portion of its exposure, whilst simultaneously locking-in the current higher prices as part of its hedging programme.

Provisional annual results postponed to mid-September

During July 2020 there has been a marked increase in infection rates across South Africa.

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Preparations for the reporting of the Company’s year-end results have been slowed owing to the responsible employees and external audit team members having to manage their schedules in compliance with COVID-19 protective measures.