Harmony Gold Mining, South Africa’s biggest gold producer by volume, said it will seek board approvals on deepening its flagship Mponeng mine, which buoyed a rebound to profit in the year through June.
The Johannesburg-based firm aims to extend the life of the world’s deepest gold mine and will seek board approvals when studies are completed this year, CEO Peter Steenkamp said.
Harmony said Mponeng delivered a “stellar” performance with output up 22% as the miner rebounded to an annual profit of $275 million from a net loss of $48 million a year earlier.
“My personal belief is it will be a mine that’s got a very long life, it’s a very high grade ore and it’s certainly something that’s worth pursuing,” Steenkamp said on a conference call.
Harmony is among South Africa’s few gold miners battling to squeeze profits from some of the world’s most costly, ageing and deepest gold mines. Companies in South Africa, once the world’s top gold producer, are also struggling with rolling electricity outages and rising crime that’s threatening profits.
Harmony wants to extend depths from current levels of about 3.8 kilometres (2.4 miles) and “has a good handle in terms of mining at those depths”, Steenkamp said.
“It’s not significantly deeper than where we are currently mining so we are quite comfortable we could do it safely.”
The company bought Mponeng from AngloGold Ashanti, which has shifted focus away from South Africa to more lucrative deposits across Africa, in Australia and the Americas.
Harmony forecasts it will produce between 1.38 million and 1.48 million ounces of gold this year, compared with 1.47 million ounces last year.