South Africa's Largest Gold Producer Harmony Sees Profits Double
TLDR
- Harmony Gold's profit likely doubled in the financial year ended June 30 due to increased gold output, higher grades, and a price surge.
- Preliminary headline earnings per share reported at $0.98, up from $0.45 per share the previous year.
- Harmony's gold production exceeded target, reaching 1.56 million ounces, but faced a writeoff of R2.8 billion on its Target North project due to lower-than-expected mineral reserves.
South Africa’s largest gold producer by volume, Harmony Gold, announced on Monday that its profit likely doubled in the financial year ended June 30, driven by increased gold output, higher grades, and a price surge.
The Johannesburg-based miner reported preliminary headline earnings per share of $0.98, up from $0.45 per share the previous year. Final full-year results will be released on September 5.
Harmony's gold production rose 6% to 1.56 million ounces, exceeding its target of 1.55 million ounces. However, the company faced a R2.8 billion ($157.51 million) writeoff on its Target North project in South Africa, where recent studies revealed lower-than-expected mineral reserves.
Key Takeaways
Harmony Gold's strong financial performance underscores its ability to extract value from aging and deep mines in South Africa, even as it faces challenges with projects like Target North. Despite the profit boost, the write-off at Target North highlights the difficulties of maintaining profitability in some of the world’s deepest gold mines. As Harmony shifts its focus to more lucrative copper projects in Australia and Papua New Guinea, the company is aligning with global demand trends for metals essential to electric vehicles and renewable energy systems. This strategic pivot reflects a broader industry trend among South African miners seeking growth opportunities beyond traditional gold mining, which has become increasingly costly and hazardous.
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