Charlotte Mathews
18 August 2008
Johannesburg — HARMONY Gold Mining was considering the viability of spending up to R850m in Free State to build tailings reprocessing plant at the now-closed St Helena mine, CEO Graham Briggs said on Friday.
Tailings are the surface residue of old mining operations that still contain small quantities of gold. Using new technology, and at recent high gold prices, it can be profitable to extract the gold because the costs of treatment are relatively low.
Briggs said Harmony owned about a billion tons of surface tailings in Free State and could potentially treat about a million tons a month at St Helena. It would cost about R850m to treat those quantities over 20 years. The project was still being studied .
This was one of several growth projects Harmony was considering.
In SA, it was searching for new reserves for the Evander South mine in Mpumalanga and exploring the adjacent Poplar and Rolspruit areas.
In the past year Harmony has cut jobs by closing unprofitable shafts, terminating continuous operations at all but one shaft, and selling off or entering into joint ventures .
Briggs said he believed the restructuring was now complete. Any future transactions were likely to be in projects under development .
The proceeds of the restructuring would be used to reduce debt, Briggs said, with the aim of making Harmony debt-free . Harmony owed R4bn at the end of June . It had realised R1,8bn from entering into a joint venture with Newcrest Mining in Papua New Guinea and almost R2bn from selling some of its uranium assets to Rand Uranium.
For the year to June, Harmony increased revenue 15% to R9,2bn compared with last year. But after the impairment of assets, impairment of its investment in Pamodzi Gold and loss on the sale of its Gold Fields shares last year, it realised a net loss of R245m from last year's R382m profit.
Headline earnings rose to 127c a share from 53c.
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