(Bloomberg) -- Harmony Gold Mining Co. expects to increase production this year after coronavirus disruptions meant the miner was unable to take full advantage of near-record bullion prices in the 12 months through June.
Production fell 15% in that period as Harmony’s deep-level mines in South Africa were disrupted by virus shutdowns and power outages. Harmony, backed by black billionaire Patrice Motsepe’s African Rainbow Minerals Ltd., will become the nation’s No. 1 gold producer when it completes the acquisition of AngloGold Ashanti Ltd.’s South African assets later this month.
While AngloGold is departing a South African industry that’s become expensive and dangerous as mines extend miles underground, that doesn’t deter Harmony. The company squeezes profits from its portfolio of mines by cutting costs and extending their lifespan. Buying Mponeng, the world’s deepest mine, from AngloGold will help boost Harmony’s annual output to more than 1.6 million ounces.
“We take these ore bodies that have got good potential and we develop them, extending the life of mine over the years,” Chief Executive Officer Peter Steenkamp said on a conference call on Tuesday. “We have the last part of the gold mining industry that is still probably available.”
South Africa’s gold industry is less than a fifth of the size it was at its peak and its importance to the economy is rapidly diminishing. Still, Harmony’s shares have more than doubled in value this year, and rose 4% as of 9:28 a.m. in Johannesburg.
Harmony’s loss narrowed to 850 million rand ($51 million) in the year through June, from 2.6 billion rand a year earlier. The translation loss on the Johannesburg-based company’s dollar borrowings jumped ninefold to 967 million rand as the rand weakened.
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