Harmony Gold haunted by Kusasalethu curse | Fin24
 
  • Load Shedding Schedules

    Find information for Johannesburg, Durban, Cape Town and other cities.

  • Govt Pension Fund

    The fund says it would be wrong to dismiss R250bn Eskom bailout proposal without all the facts.

  • Sovereign Wealth Fund

    Questions around the fund's scope & mandate remain unanswered, writes Dr. Malan Rietveld.

Loading...

Harmony Gold haunted by Kusasalethu curse

Feb 23 2015 15:32
Mining

(Shutterstock)

Company Data

HARMONY GOLD MINING COMPANY LIMITED [JSE:HAR]

Last traded 59
Change 4
% Change 7
Cumulative volume 4938615
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

All free after underground fire traps 486 miners

184 of almost 500 trapped mineworkers rescued

 

Johannesburg – Harmony Gold [JSE:HAR] must feel cursed by its Kusasalethu mine, where a fire on Sunday has delivered a fresh blow to the company's efforts to boost earnings.

In the latest setback to an operation that has been closed before because of labour violence and illegal miners, the blaze took hold deep underground during maintenance work.

All 486 miners working at the time were brought safely to the surface, but Harmony's profits will not make such a swift ascent, especially since the mine will almost certainly be closed for an indefinite period while an investigation is held.

READ: Kusasalethu gold mine closed after fire

"It’s a massive blow. More than half of their book is not making money and Kusasalethu is the main culprit," said Daniel Sacks, portfolio manager at Investec.

The deep level operation west of Johannesburg is Harmony's single largest gold producer and has been burning cash, posting a production loss of R113.5m in the December quarter.

Kusasalethu produced just shy of 25 000 ounces in the December quarter, about 10% of the company's output and well down from the almost 43 000 ounces it had churned out in the previous quarter.

Kusasalethu was shut for two weeks in the December quarter when the company flushed out illegal miners, who had been trespassing into the operation.

The asset, which has a troubled history, was also shut for several weeks at the start of 2013 in a bid to quell violent clashes rooted in a union turf war.

READ: All 486 trapped mineworkers rescued - as it happened

Chief executive Graham Briggs said last year that 18 months after it had reopened, the mine was still producing below capacity as problem after problem emerged during the protracted restart.

The company's safety record will also be back in the spotlight after Sunday's mishap. Nine workers were killed after a fire triggered by a small earthquake at Harmony’s Doornkop mine in February last year.

"We are extremely concerned about Harmony's safety record," Frans Baleni, general secretary of the National Union of Mineworkers, told Reuters.

Harmony said earlier this month it expected to return Kusasalethu to profitability by the June quarter this year, through job cuts and mining lower volumes at improved grades.

The company reported a headline loss of R496m in the three months to December 31, 2014.

johannesburg  |  earnings  |  gold  |  mining
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
3 comments
Comments have been closed for this article.
 

Company Snapshot

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote

Loading...