South Africa: Harmony Reinstates Dividend As Gold Price Boosts Earnings

Harmony Gold reinstated its dividend on Tuesday after it unveiled robust interim results, underpinned by red-hot prices for the precious metal.

Harmony is the latest gold producer to report a big boost in profits after gold bulls ran rampant last year, taking the price at one point into record territory above $2,000 an ounce. The Covid-19 pandemic has roiled the global economy while lifting gold in the process.

Low interest rates enhance the yield appeal of gold, while general uncertainty burnishes its status as a safe haven for capital. For South African producers, rand weakness becomes a double bonus as gold is priced in dollars while most of their cost base is in the domestic currency. With wages talks in the gold sector set to take place later this year, none of this will be lost on unions.

Gold companies need to be in a position to take advantage of rising prices and so work on raising productivity, containing costs and mining ore bodies with high grades. This means that even small price bumps can flow hugely to the bottom line, and a fall in prices can be taken on the chin. Of course, a big fall can still...

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 900 reports a day from more than 130 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.