bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Reuters

South African miner Harmony Gold reported a further quarterly loss yesterday and suggested it might have to cut jobs as it contends with a depressed gold price and operational problems which include an escalating battle with illegal miners.
Unveiling its financial results for the three months to September, the company said its losses narrowed by 78 per cent to 226 million rand (HK$157.6 million) as production output rose 6 per cent to just over 303,000 ounces.
The company also benefited from an increase in the rand gold price because of weakness in the currency.
The average gold price in the quarter eased 0.5 per cent to US$1,282 an ounce but the rand gold price rose 2 per cent.
However, the current quarter will be a tough one as the company said last week it was closing its key Kusasalethu mine west of Johannesburg for two weeks to try to remove illegal miners who are believed to be starting fires in the mine.
"The decision comes after a third underground fire in October was started by illegal miners. Although no one was harmed in any of these fires, it did result in 10 production days lost in October," Harmony said in its results statement.
The company is especially sensitive about safety after nine employees died in a fire in February at its Doornkop mine.
Harmony has also struggled to get Kusasalethu back to full production after shutting the mine for several weeks at the start of last year because of labour violence rooted in union rivalry.
"Kusasalethu's production has continued to be problematic and management is working on an alternative plan to return the mine to profitability," the company said.
Chief executive Graham Briggs implied that any restructuring at the mine was likely to include job cuts.
"The plans at Kusasalethu we will be signing off in the next few weeks … we will have to go through a negotiating process with unions," Briggs said.
Under South African labour law, companies have to hold talks with unions if they plan lay-offs.
"If we look at job cuts, 50 per cent of our costs are on labour, so any major restructuring always involves jobs and we have to look carefully at that," Briggs said.
He said Kusasalethu had not made a profit since 2012 and the company had been "throwing a lot of resources at it to try to improve the situation there".
Gold producers in general are caught in a bind as prices tumble and costs climb. The spot price dropped to fresh four-year lows yesterday to less than US$1,200 an ounce - a critical level that many analysts see as a "tipping point" that will cause shaft closures.
Any move to cut jobs at Kusasalethu could meet stiff labour resistance given the heavy presence at the mine of the hardline Association of Mineworkers and Construction Union, whose members have downed tools in the past at Anglo American Platinum in protest against planned lay-offs.
Meanwhile, Briggs said the market would get an update next month on the pre-feasibility study at Harmony's flagship Wafi-Golpu project in Papua New Guinea, with new estimates on capital expenditure.
Harmony has already said it expects "significantly lower" investment than previous estimates which called for spending of almost US$6 billion to develop the mine.
Costs will be shared with joint-venture partner Newcrest Mining.


Harmony Gold mulls job cuts as gold price slumps

Harmony Gold pared its losses on increased production output.

Business

Companies

Commodities

South African firm under pressure after posting more losses and labour problems at key mine


South African miner Harmony Gold reported a further quarterly loss and suggested it might have to cut jobs as it contends with a depressed gold price and operational problems which include an escalating battle with illegal miners.
