Johannesburg - Harmony Gold Mining Company [JSE:HAR], South
Africa's third largest gold producer, said its second quarter earnings were
higher despite a 9% fall in output after post-strike violence at one of its
biggest South African mines forced it to halt the operation.
Headline earnings were 28% higher at 158 cents per share for
the three months October to December, which beat the Reuters consensus of 102
An interim dividend of 50 cents per share has been declared.
Production in the second quarter was 291,734 ounces after it
lost 25,000 ounces to an illegal strike at its Kusasalethu operations near
Despite relying on South Africa for more than 95% of its
output, the impact on Harmony from violent wildcat strikes that crippled
operations at other South African gold and platinum producers was limited to
A burst of post-strike violence and intimidation spurred by
inter-union rivalry at Kusasalethu prompted the company to say it would mothball
the mine, which could lead to the sacking of 6 000 employees.
After discussions with trade unions and the government
earlier this month, Harmony said it was one step closer to re-opening the mine.
"I am positive about the re-opening of Kusasalethu. In
six weeks we could start to produce some ore with full production closer to the
end of the quarter," said chief executive Graham Briggs.
The unions and Harmony have until March 7 to decide on the
future of the mine, which has historically contributed about 14% to the
company's annual output of roughly 1.3 million ounces.
Harmony's shares have lost 38% of their value in the last
year, compared with a 27% drop in the JSE's Gold Mining [JSE:J150] Index.
Shares in Harmony Gold jumped 5.4% to R60.50 at the open of trade on Monday.