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Harmony Gold Mining Company Ltd. (NYSE:HMY,JSE:HAR) announced that it has concluded an “intensive performance review” of its Kusasalethu gold mine, and now will put in place a plan that will make it profitable once again.
Harmony Gold Mining Company Ltd. (NYSE:HMY,JSE:HAR) announced that it has concluded an “intensive performance review” of its Kusasalethu gold mine, and now will put in place a plan that will make it profitable once again.
As quoted in the press release:
Kusasalethu has consistently recorded losses since September 2012. The mine recorded negative free cash flow of R392million in the financial year ended June 2014 and negative free cash flow of R112 million between July and October 2014. This is despite ongoing improvement initiatives and continued investment in the mine (some R3.9 billion in capital since 2001) to improve the mine?s performance. Engineering infrastructure and water reticulation failures in the past year exacerbated the underperformance at the mine further, as have excessive stoppages for various reasons, including illegal mining activities.
The current situation is clearly unsustainable. Harmony’s intention is to restore the mine to profitability in the fourth quarter of the current financial year and – in so doing – preserve as many jobs as possible. The new plan will entail mining lower volumes at higher grades at a reduced cost.
Graham Briggs, CEO of Harmony, commented:
Kusasalethu has not returned to profitability after various setbacks. We need to be both decisive and mindful in our actions so that we preserve the viability of this mine for several decades to come. Without these actions, this mine will not survive and that would indeed be a tragedy for our company, our employees, our communities and our country.
Click here to read the full Harmony Gold Mining Company Ltd. (JSE:HAR) press release.