South African miner Harmony Gold’s recently acquired CSA Copper Mine in Australia will need fresh capital investment and a strategic overhaul that could take up to two years, Chief Executive Beyers Nel said on Monday.
Harmony, South Africa’s largest gold producer by volume, is expanding into copper, a metal seen as critical for electric vehicles and power grid infrastructure.
The move comes as gold mining in South Africa becomes increasingly expensive and technically difficult because of the depth of its mines.
Harmony formally took control of the CSA mine in New South Wales last October after buying it from Australian miner Mac Copper Ltd in a deal valued at $1.03 billion.
Under Mac Copper, the mine produced about 40,000 metric tons of copper annually, but Harmony has not yet said whether it can sustain or raise that level of output. Nel said the operation needs major improvements.
“It could be up to two years or even more potentially to de-risk and de-bottleneck the mine,” he told Reuters on the sidelines of the Africa Mining Indaba conference. “It is a mine that is constrained at the moment. It is a mine that requires a bit of a rethink and recapitalisation.”
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Nel explained that the two main problems are poor ventilation and limited mining flexibility caused by inadequate insulation. Harmony is currently reviewing short-term projects to improve ventilation and allow for deeper mining.
The company plans to release its first formal production guidance for the CSA mine when it reports its half-year results in March, covering the six months from January to June.
“We’re not expecting it to shoot the lights out. I mean, the mine is constrained,” Nel said.
Beyond the CSA mine, Harmony fully owns the Eva copper project in Queensland, Australia, and is a joint owner with Newmont of the Wafi-Golpu gold-copper project in Papua New Guinea, which is currently going through the permitting process for a special mining licence.
“We haven’t got a definitive timeline on when it would happen (issuing of licence), but we are confident that we are slowly progressing towards getting that outcome that we want,” Nel said.
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Image Credit: Mining.com
