Harmony to extend life of world’s deepest mine

Harmony Gold Mining said it will spend R7.9 billion to extend the life of the world’s deepest mine, bucking the trend in South Africa’s dwindling gold industry.

The company acquired the Mponeng mine – east of Johannesburg – when AngloGold Ashanti sold its last remaining assets in South Africa four years ago.

The project has become the star performer in Harmony’s portfolio, helping the miner triple its profit in the six months through December.

The investment will extend Mponeng’s life from seven to 20 years, with work due to begin in 2025. It’s a rare piece of good news for South Africa’s fading gold sector, where production has shrunk to less than a fifth of its peak amid the greater costs and geological challenges of mining ever deeper deposits.

Those realities have driven the likes of AngloGold, Gold Fields and even Harmony to expand into other markets in Africa, Australasia and the Americas. 

Still, Mponeng – the largest contributor to Harmony’s output – is continuing to generate cash for AngloGold.

Under the terms of its original acquisition, Harmony will pay R108 million to the mine’s previous owner because its production in 2023 exceeded 250,000 ounces.

Harmony’s profit tripled to R5.96 billion in the final six months of 2023 from a year earlier, while overall production climbed 14% to 832,000 ounces.