12.2 C
Saturday, November 26, 2022
HomeBusinessHarmony’s production knocked by Eskom load shedding in quarter

Harmony’s production knocked by Eskom load shedding in quarter

Harmony’s production knocked by Eskom load shedding in quarter

- Advertisement -

Harmony Gold suffered lower output and production took a knock during the quarter period to the end of September amid Eskom load shedding.

Harmony said yesterday the ongoing electricity supply crisis, which is forcing Eskom to institute load-shedding, negatively impacted “group production, with approximately 3 215 ounces in production lost” from its South African operations.

Higher winter electricity tariffs by Eskom also had a severe financial impact on the company as it contributed to a 5% growth in its all-in sustaining costs that rose to R907 864 per kilogram.

Overall bullion production for Harmony dipped 4% for the quarter period under review to 366 390 ounces compared to the same period in the prior year. The dip in production has been attributed to “the closure of Bambanani” mine in the Free State.

“On the back of the strong quarterly performance from the South African assets and the favourable US$/rand exchange rate, Harmony remains on track to meet the FY23 (financial year 2023) cost, grade and production guidance,” Harmony said.

It expects Harmony gold production to range from 1.4 million to 1.5 million ounces for its full-year financial period to June 2023. Its shares shed 2.4% to trade at around R58.40 on the JSE in intraday trade.

Despite the loss of production for the quarter under review owing to the closure of Bambanani, there was a 1% increase in underground recovered grades to 5.35g per ton. The South African surface operations raised output by 4% to 61 634 ounces.

With production costs largely rand denominated, the gold price received for the period “continued to move in Harmony’s favour”, firming up by 1% to R954 916 per kilogram of gold.

Additionally, derivative gains for the quarter amounted to R236 million as the “average forward rand gold price on the hedge book now increased to R1 036 000 per kilogram as at 30 September 2022” compared to R1 016 000 per kilogram as at the end of June.

These movements resulted in a marginal 1% rise in gold revenue for the company for the quarter to R11.2 billion.

Operating free cash flow subsequently strengthened by as much as 17% to R857m with group operating cash flow margins improving from 7% in the previous quarter to 8% during the quarter under review.

Harmony Gold reported two fatalities from its Moab Khotsong and Tshepong North operations in August and November in “fall of ground” incidents. The company, hobbled by power outages from Eskom, said the first phase of a three-stage renewable (solar) energy project “is progressing well and is expected to contribute 30MW into the energy supply” next year.

Production from Harmony’s international segment declined by 28% to 32 537 ounces, with lower production at the Hidden Valley in Papua New Guinea (PNG) “expected due to planned waste stripping” to expose higher ore grades.

After the period under review, Harmony announced the acquisition of Eva Copper in Australia on October 6 “to boost our existing copper footprint”.

“Alongside the Tier 1 Wafi-Golpu project in PNG, this investment introduces lower-risk, near-term copper into the Harmony portfolio. This acquisition complements our investments in our higher grade and higher margin assets and will ensure we continue to deliver on our strategy of safe profitable ounces,” the company said.


Original Article

- Advertisement -
- Advertisment -

Most Popular

- Advertisment -