HomeGoldHarmony expects gold to hit US$1 500/oz

Harmony expects gold to hit US$1 500/oz

Harmony CEO
Graham Briggs
Johannesburg, South Africa — MININGREVIEW.COM — 15 October 2010 – Harmony Gold “’ the world’s fifth-largest gold miner “’ expects the price of gold to rise further this year, and to trade at around US$1 500 an ounce in 2011, according to its chief executive.

CEO Graham Briggs said he was still very bullish on bullion, which rose to record highs yesterday as the dollar slid to its lowest this year versus a basket of major currencies, boosting interest in gold as a safe haven.

“In the short term, it’s got good potential of going up. Next year, we will probably be in the region of US$1 500," he told Reuters in an interview.

Briggs said the gold rally had only slightly helped offset the impact of a stronger rand, which has strengthened nearly 30% since the start of 2009 and is trading at its strongest levels in nearly three years.

Rising electricity prices have also hit South African miners, with power utility Eskom mulling two price increases of around 25% each on top of three similar consecutive increases it has already announced.

“If they do have further large increases, it will certainly affect us badly, especially on those operations which are very deep,” Briggs said, although he added that Harmony was looking at cutting down on the amount of electricity it consumed, with its usage already down 28% from 2008.

Harmony, Africa’s third-largest gold miner, expects to produce 1.7 million ounces of gold this financial year, although first-quarter output fell slightly due to closures of two of its shafts and temporary shutdowns at two others.