“Although our production will be marginally less next year,” he explains, “we have five new growth projects, costing a combined total of close to R6 billion, starting production of higher-quality ounces between 2008 and 2012. These projects represent the life-blood of Harmony going forward, and bringing them on stream on time and at the right cost remains our top priority,” Briggs emphasises. “They will be adding a combined total of more than 1.4Moz to our total output over the next four years,” he adds.
Four of the five projects are in South Africa, and the first of these to reach full production will be the Tshepong project, which began production in April this year and will reach full production in May 2008. It has a total of 1.47 million life-of-mine ounces at a grade of 7.2 oz/t. The US$43 million (R300 million) mine is expected to produce 135 000 oz pa at a cash cost of US$279/oz.
The Doornkop project moved into production in July of this year, and is expected to reach full production by December 2009. The US$178 million (R1.25 billion) mine has more than 3 million life-of-mine ounces reaching a grade of 6.6g/t. It will produce an average of 347 000 oz pa at a cost US$301/oz.
The US$130 million (R900 million) Phakisa project is scheduled to start production in June 2008, and is due to attain full production in August 2010. This mine has 5.4 million life-of-mine ounces at a grade of 8.3g/t. Its production will average 282 000 oz pa at a cash cost of US278/oz.
The final South African project is Elandsrand, which is already producing, but will only attain full production in 2012. This US$130 million (R950 million) mine has 7.5 million life of mine ounces at an average grade of 7.9g/t. It will produce an average of 416 000 oz pa at a cost of US$272/oz.
The fifth project is the Hidden Valley mine in Papua New Guinea. This project – which has more than 2.6 million life-of-mine ounces at an average grade of 2.2g/t – is costing a massive US$385 million (R2.6 billion). It is due to start production in March 2009 and to reach full production within three months, producing 285 000 oz pa at a cost of only US$224/oz.
EXCITING URANIUM PROSPECT
As far as other new production possibilities are concerned, Briggs mentions that Harmony’s Cooke uranium dumps remain an exciting project. “The two alternatives under consideration are joint-venturing with an interested party or listing the resources,” he suggests. “We are currently in discussion with a number of interested parties who are in the process of evaluating the potential of the Randfontein operations, dumps and underground resources,” he adds.
The only new expansion on the cards outside South Africa is in the South-East Asian region, where Harmony’s Wafi Golpu copper and gold exploration project is reported to be producing excellent results.
Turning to exploration, Briggs confirms that Harmony’s expenditure and activities have been suspended in South Africa and north-west Africa. “We will continue to maintain a presence in Papua New Guinea, where our exploration activities have intensified and we intend growing our South-East Asian mining operations,” he explains.
It has obviously been a rough year for Harmony with spiralling costs, decreasing production, the Elandsrand closure and the resignation of Bernard Swanepoel, but Briggs believes that the company can recover from these setbacks by adhering to its recovery strategy.
“My immediate focus is the short-term strategy,” he says, and a key priority for the year ahead is to ensure that we turn our current operations to optimal account,” he insists.
“Due diligence procedure will be completed at all our shafts to ascertain what measures should be implemented where,” he adds.
“Our ‘back to basics’ approach and focus on disciplined mining should have management and the workforce concentrating on reversing the downward trend in our production and the upward trend in costs,” Briggs emphasises. “We have excellent ore-bodies, welladvanced projects and high-calibre management, and productivity improvements are expected from every employee,” he points out.
“We are keenly aware that good management and intensive cost controls will enhance the company’s prospects,” Briggs concludes, “although no dramatic upturn should be expected in the next two quarters.”