South Africa – Harmony Gold has announced that it will continue to restructure its operations for long-term profitability.
Harmony’s life-of-mine optimisation process, which was completed during the December 2014 quarter, has resulted in a greater focus on mining profitable and higher grade areas at its South African operations.
It also resulted in removing lower grade and unprofitable areas from the mine plan for most of the operations, which includes the abandonment of levels and areas with a carrying value at Kusasalethu (R214 million) and Masimong (R216 million) and such areas were accordingly identified for scrapping.
The plan at Kusasalethu will also entail mining lower volumes at higher grades at a reduced cost, as the mine has not returned to profitability after various setbacks.
Harmony believes that the decision to restructure and optimise its operations, will contribute to a more profitable Harmony in the future.
The restructuring at its Kusasalethu mine near Carletonville was completed and the company expects the full cost saving of this to be realised in the June quarter. Production at the Kusaslethu mine, subsequent to its restructuring, is ramping up to planned levels, Harmony said in the announcement.
Slow start to 2015
Overall, slow start-ups after the December holidays and safety stoppages resulted in group production being 10% lower quarter-on-quarter.
Operating and capital costs are expected to have reduced by a similar percentage compared to the previous quarter.
Despite this, Harmony reports that underground grade has remained consistent.
Harmony’s results for the third quarter of financial year 2015 ended March 31, 2015 will be released on Friday May 8, 2015.