Harmony’s big decision
Deepen an already 3.7km-deep mine in power-starved South Africa or go large in copper? It’s a tougher call than it seems
Harmony Gold’s nonexecutive directors will be earning their fees this year with one weighty, strategy-defining decision pending. That is whether to build a new copper mine in Australia or stick to its knitting by deepening an existing gold mine in South Africa.
If feasibility studies due at the end of this year check out, the projects could fly simultaneously, at least in theory. In practice, Harmony may be hard-pressed to do both. It reported a ratio of debt to earnings before interest, tax, depreciation and amortisation (ebitda) of 0.6 as of end-December. While that ratio comfortably falls within its debt covenant, the board thought it prudent to pass the interim dividend ahead of a R17bn stay-in-business capital programme for 2023 and 2024...
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