South African gold mining giant seals R18 billion deal

Harmony Gold agreed to buy MAC Copper for $1.03 billion (R18.4 billion), enabling the top producer of South African gold to expand its exposure to copper in Australia.

Johannesburg-based Harmony said it’s offering $12.25 a share in cash, a 21% premium to MAC Copper’s closing price in New York on Friday. MAC Copper’s shares rose 20% in premarket trading.

Harmony, like larger peers Newmont and Barrick, is seeking to grow its exposure to copper in anticipation of spiking demand for the metal driven by the green-energy transition.

The firm also expects to make a final decision this year on whether to develop the Eva Copper project in Australia, which it acquired in 2022.

MAC’s sole asset is the CSA copper mine, about 700 kilometres northwest of Sydney, which produced about 41,000 tons of the metal last year.

Through Eva and CSA, Harmony said it has the potential to produce 100,000 tons of copper annually within the next five years.

Harmony specialises in generating value from ageing, deep underground assets in South Africa that other operators, such as AngloGold Ashanti, no longer want. It also operates a gold mine in Papua New Guinea. 

The transaction represents a “significant step forward in transforming Harmony into an increasingly de-risked, higher-quality, global gold and copper producer through disciplined and effective capital allocation,” CEO Beyers Nel said in a statement on Tuesday.

Harmony share fell as much as 7.5% in Johannesburg trading, before paring those losses. The company said it will use a $1.25 billion bridge facility for the acquisition.

Citigroup, JPMorgan Chase and Macquarie Bank will arrange and underwrite Harmony’s facility, which has a 364-day tenure with a six-month extension that the gold producer can exercise. Harmony said it expects to complete the transaction toward the end of the year.