MANAGEMENT

Harmony to shutter Tshepong mine

Johannesburg-based Harmony Gold will shutter Tshepong mine in South Africa due to a downgrade in reserves at the mine.

Harmony saw higher costs due to production difficulties and inflation.

Harmony saw higher costs due to production difficulties and inflation.

Tshepong will now be restructured into two separate operations, Tshepong North and Tshepong South. Tshepong North sub-75 project has been suspended, and the life of mine has been reduced from 19 years to seven years, Harmony chief executive Peter Steenkamp said.

The project at Tshepong had been to extend the mine life to 20 years.

Capital which had been intended for development of Tshepong North will instead be put towards higher-return projects, specifically the Zaaiplaats project and the Kareerand tailings expansion in the Vaal River region.

"As we continue to grow and diversify production, capital expenditure must remain disciplined, focused and affordable," Steenkamp said.

"We continue to optimise our existing operations and asset mix, reallocating capital towards those projects and operations that will deliver the highest possible returns, while lowering the overall risk profile of Harmony."

The decision to shut down Tshepong North came as a result of an expected impairment of 4.43 billion South African rand (US$261.2 million). This impairment was due largely to production decreases, inflationary costs, and the cost of labour.

Headline earnings per share will be between 4.61 rand and 5.49 rand, Harmony warned. In he previous fiscal year, headline earnings per share were 9.87 rand.

Tshepong operations contributed to 16% of Harmony's 2021 gold production.

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