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Harmony to Swing Back to Profit at Current Gold Price, CEO Says

Feb. 4 (Bloomberg) -- Harmony Gold Mining Co., South Africa’s third-largest producer of the metal, will swing back to profit in the next six months if the gold price stays at current levels, Chief Executive Officer Graham Briggs said.

Harmony is aiming for all of its mines to produce gold at a cost of less than 400,000 rand ($35,580) a kilogram (2.2 pounds) and to bring the average cost across its operations to about 390,000 rand a kilogram, Briggs said yesterday. A kilogram of gold sold at 453,306 rand, at 7:31 a.m. in Johannesburg, 16 percent more than Harmony’s targeted all-in sustaining costs.

“We’re planning for a more conservative gold price at 400,000 rand a kilogram and below,” he said at an interview at the Mining Indaba in Cape Town. “Therefore the next six months at these gold prices should be quite profitable.”

Harmony yesterday posted its second loss in three quarters after gold production and the price of the metal declined. The company didn’t pay a final dividend last year and wrote down the value of its 50 percent stake in the Hidden Valley venture with Newcrest Mining Ltd. in Papua New Guinea by $268 million. The higher gold price may allow the board to pay a dividend in the next six months, Briggs said.

At the current gold price “you can see the sort of margin that we have,” he said. “That would be a good intent to pay some dividends during this next half year, but we don’t know what the gold price is going to do.”

The price of gold in rand has risen 12 percent this year, partly due to the South African currency’s 6.5 percent drop against the dollar, the worst of 16 major currencies tracked by Bloomberg. Harmony’s costs are mostly in rand, while gold is priced in dollars.

To contact the reporter on this story: Kevin Crowley in Johannesburg at

To contact the editor responsible for this story: John Viljoen at

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