South African miner Harmony Gold’s recently acquired CSA copper mine in Australia requires a capital injection and a strategic rethink which could take two years, chief executive Beyers Nel said on Monday.
Harmony, South Africa’s top gold producer by volume, is diversifying into copper – a metal critical to electric vehicles and power grid infrastructure – as gold mining in South Africa becomes more costly and geologically challenging due to the depth of the country’s mines.
Harmony officially took over the CSA mine in New South Wales last October after acquiring it from Australian miner Mac Copper Ltd in a deal worth $1.03 billion.
Under Mac Copper the mine was producing 40,000 metric tons a year of copper, but Harmony has yet to say whether it can maintain or increase that output.
Nel said the operation requires significant work.
“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 recapitalization.”
The two core issues that need fixing are insufficient ventilation and limited mining flexibility due to inadequate insulation, he said.
Harmony is reviewing short‑term projects to improve ventilation and enable deeper mining. The company plans to give the first formal production outlook for the mine when it reports 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.
Harmony also wholly owns the Eva copper project in Queensland, Australia, and is joint owner with Newmont of Wafi-Golpu, a gold-copper project in Papua New Guinea, which is in the process of permitting 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.
(By Nqobile Dludla and Olivia Kumwenda-Mtambo; Editing by Nelson Banya and Susan Fenton)
