By Felix Njini and Nelson Banya
JOHANNESBURG (Reuters) -Harmony Gold, South Africa’s biggest gold producer by volume, will fund the construction of a new Australian copper mine using its own cash, the miner said on Tuesday, as its earnings jumped on a rally in gold prices. The Johannesburg-based miner is diversifying into copper – a metal critical to electric vehicles and power grid infrastructure – as gold mining in South Africa becomes more costly and geologically challenging due to increasing depth.
Harmony wholly owns the Eva copper project in Queensland, Australia, and is joint owner with Newmont of Wafi Golpu in Papua New Guinea.
The mine in Australia could produce 55,000 metric tons to 60,000 tons of copper annually from 2029, the company says. The cost of building the mine, expected to take about three years, could be higher than an initial estimate of $600 million, CEO Beyers Nel told Reuters. Harmony is “blessed with a robust and flexible balance sheet and quite comfortable” that it can fund the construction of Eva copper mine on its own, Nel said.
Finance director Boipelo Lekubo told analysts the surge in the gold price was a significant tailwind which had increased Harmony’s net cash position to nearly $400 million. This and available financing facilities mean Harmony has about $1 billion it can use on its growth projects.
Gold prices have risen more than 20% over the past year, driven by safe-haven demand amid global economic uncertainty and central bank buying. Nel said Harmony was updating the planned mine’s studies before announcing how much financing would be required. Harmony also owns the Hidden Valley gold mine in Papua New Guinea. It is among a dwindling number of South African gold miners still battling to squeeze profits from some of the world’s deepest mines.
Earlier on Tuesday, Harmony said its net profit jumped 33% to 7.9 billion rand in the six months to December 2024, reaping a windfall from a 28% increase in the price of gold during the half-year period. Harmony said it would pay an interim dividend of 2.27 rand per share or about 1.4 billion rand, compared to about 1.47 rand per share paid out a year ago.
($1 = 18.5896 rand)
(Reporting by Felix Njini in Johannesburg and Nelson Banya in Harare; Editing by Rachna Uppal and Emelia Sithole-Matarise)
