Gold mining company Harmony Gold has proposed two significant transactions aimed at advancing broad-based black economic empowerment (BBBEE) within its operations.

The proposals involve the issuance of convertible preference shares to the trustees of the Harmony Community Trust and no-par value ordinary shares to the trustees of the Harmony Sisonke employee stock ownership plan (Esop) Trust.

The Harmony Community Trust share issue is a key element of Harmony’s broader BBBEE transactions, while the Esop Trust share issue is specifically intended for the benefit of eligible employees.

“Our employees and host communities are the cornerstone of our success. We believe in shared value and partnership in order to grow our business and develop thriving communities where we operate. This is mining with purpose.

“We continue to illustrate our firm commitment towards long-term value creation and responsible stewardship through these transactions,” Harmony CEO Peter Steenkamp said on December 11.

The proposed BBBEE transactions stem from Harmony's acquisition of fellow gold miner AngloGold Ashanti's South African assets, including Mponeng and related assets in 2020.

Harmony said this strategic move aligns with its merger and acquisition criteria, leveraging its existing assets, stakeholder relationships, and previous acquisition experience from the Moab Khotsong mine in 2018.

The Harmony Community Trust and the Sisonke Esop Trust were established in 2018 to administer benefits for communities and an employee share ownership plan, respectively.

The proposed issuance of additional preference shares and ordinary shares to these trusts is being done to align with Harmony's previously stated commitment to meaningful participation by historically disadvantaged South Africans in the mining sector.

Harmony proposes to issue about 2.4-million preference shares to the Harmony Community Trust and 12.7-million ordinary shares to the Esop Trust.

Following the transactions, the Harmony Community Trust will hold more than 6.8-million preference shares, which, when converted, would constitute about 0.4% of the issued ordinary shares, while the Esop Trust will hold more than 12.6-million ordinary shares, amounting to about 2% of the total issued ordinary shares.