JOHANNESBURG (miningweekly.com) – South Africa’s biggest gold mining company is well down the track with its solar build amid group operating free cash flows increasing by 46% to a new half-year record of R10.4-billion in the six months to December 31.

“We've got our strategy and our net zero well mapped out,” Harmony CEO Beyers Nel told Mining Weekly in a one-on-one interview following his maiden presentation of stellar financial results on Tuesday, March 4. (Also watch attached Creamer Media video.)

Nel said of the company's recent turning of the first sod for a green-loan-supported 100 MW solar plant: “Our programme is rolling out and we’re going at this as fast as we can. Our mines are deep and energy intensive, so for us, it's not necessarily getting the mines, in the near term, totally off the Eskom grid, but it's about reducing our exposure to the price of electricity.

“Green electrons are not only green, they're also cost-effective, and it makes a huge difference to our power cost, so we're growing our renewable energy as fast as we can,” Nel added.

Regarding Tuesday’s record-laden achievement, Nel was, first-and-foremost, keen to acknowledge the contribution of Harmony’s employees, labour unions, shareholders, board members and "everyone else", including the media, for supporting what he described as “a phenomenal turnaround story”.

“Today, we announced a record interim dividend, which is hugely exciting – giving back to our shareholders and our communities – and that was great for me to see.”

The record interim dividend payout of R1 441-million was on the basis of 227c a share.

What Nel acknowledged as also being hugely exciting to him was the building out of Harmony’s organic South African projects, extending the life-of-mine of the high-grade underground mines, advancing the high-margin surface operations, optimising the mature mines, and progressing the near-term copper opportunity.

“We like to think of our business in four quadrants, each one of them bringing distinctly different risk profiles and a distinctly different value attribute to the business."

On capital expansion projects now underway to give the South Africa's high-grade Mponeng and Moab Khotsong underground mines 20 years of life, Nel enthused: “That's hugely exciting”, as is the high-margin surface retreatment Mine Waste Solutions, which is being given a 16-year life.

On older mine optimisation, he noted: “These mines are equally important to us”, representing as they do 40% of cash-generative production, albeit at a slightly lower margin.

In the remaining quadrant are Harmony’s international assets, with Hidden Valley in Papua New Guinea highlighted for performing “very well” in the reporting period: “There's an opportunity to extend that life, which we're working on.”

Then there is the near-term Eva Copper prize, in Australia, and less-near Wafi-Golpu, in Papua New Guinea, where negotiations for a special mining lease are ongoing.

While Harmony has historically been a gold producer, it's on the cusp of introducing near-term copper, which will further derisk and diversify its production profile. Eva is expected to produce between 55 000 t and 60 000 t of copper a year and 14 000 oz of gold a year for 15 years.

Mining Weekly: When are you going to get Eva going? How much will you spend to get it moving?

Nel: We aim to get first copper in the calendar year of 2029. I can't tell you how much we’ll be spending, but we’ve made good progress on the feasibility study update. Remember, it's an update. We acquired the mine with a study. This mine will be bigger than what was originally contemplated by the previous owners, and the technical aspects of the feasibility study are largely complete. We've signed off on the flow sheet and on the mine design, and we’re comfortable with what that looks like. What is still outstanding for us is amending some of our environmental permits, remembering that we’re building a bigger mine, which needs more water, for example. We need to permit the additional water extraction for the bigger mine, and that’s in process with the Queensland government. From a timing point of view, what we need to do is get a derisked view of the outstanding permit and the timeline thereof and we need to gate the process through our board. As soon as we get to that, we can announce to the market the financials of this exciting project and bring copper production into the mix for Harmony in a Teir 1 mining jurisdiction, leveraging the capability we have in our Brisbane office, where we've been operating for 20 years.

SOUTH AFRICA’S INCREASED GRADES

Harmony’s South African underground recovered grades increased to 6.4 g/t in the six months to December 31 from 6.2 g/t in the comparative period.

The primary contributor was Mponeng, where recovered grades increased by 11% to 11.44 g/t, which contributed to Harmony’s record operating free cash flow increase in the six months to December 31.

Harmony, which has built a robust and flexible balance sheet, has a net cash position of close to R7.3-billion.

Since financial year 2022, the Johannesburg Stock Exchange-listed company has delivered three-fold margin expansion.