In a dramatic decision which represents a powerful psychological
and economic boost for the Free State goldfields, and the province
as a whole, the new Harmony Gold/African Rainbow Minerals (ARM)
joint venture (JV) which took over four mines in the region from
AngloGold on January 1, is to reopen three shafts which had been
closed by the previous owners.
Actually, the JV is reopening four shafts, but two are to be
operated as a single unit, and so are being classified by the JV
management as one. The shafts to be reopened are Nyala and
Sable-Kudu on the Matjhabeng mine, and Steyn 3 on Bambanani.
Steyn 3 was previously known as Bambanani West, while Sable-Kudu is
the double-shaft operation. „At Matjhabeng, only the Eland shaft
was still operating under Anglogold management,“
points out Harmony corporate development executive Pine
Pienaar.
„The JV will operate three processing plants – Freegold 1,
Freegomini grinder price listld 2 and Joel,“ he adds.
The JV is being run by a board of 12 members, split 50:50 between
Harmony and ARM.
Underneath this board there is a JV steering committee, which is
responsible for the day-to-day management of the JV, and which is
composed of three members from each partner, for a total of
six.
„If the steering committee feels the need for a specific skill,
then JV management can appoint a seventh member to the committee,“
says Pienaar.
Each shaft will be operated separately, each controlled by a team
comprising a mining expert, a geologist – called the ore
reserve manager – an engineer, a humaball mill for sale in australian resources manager, and
an accountant (known as the shaft financial manager).
„This structure is the least complicated and most beneficial to
both the shareholders,“ affirms Harmony marketing director Ferdi
Dippenaar.
„It’s uncomplicated and easy to manage,“ he adds.
Both Harmony and ARM will supply services to the JV, allowing the
rationalisation of the infrastructure and so bringing
savings.
„We make our money underground, mining gold, not by supplying
services, so the services must be simple and effective,“ states
Dippenaar.
Harmony and ARM are both specialists in taking over mature minrecycled asphalt crushers price used in mnes,
radically restructuring them, undertaking considerable
rationalisation and cost-cutting, changing the pyschology of
management and workers, and adding years of life to assets
previously thought to be on their last legs.
Both companies report that they are working well together and that
their corporate cultures are very compatible.
„Both ARM and Harmony have records of reducing cash costs in
their mines,“ said Harmony CEO Bernard Swanepoel at the press
conference in December announcing the Free State deal.
„The cost curve will have to come down significantly – it is
important there is a discernable constant reduction,“ said ARM
executive chairperson Patrice Motsepe at the same event.
„I think reductions of 10% to 15% are possible in the Free State
mines“ Swanepoel added.
„I also think that their costs will be on the right side of $200/oz
in 12 months,“ he stated.
The R2,2-billion deal announced at the end of last year whereby
Harmony and ARM would, in a joint venture, purchase Anglogold’s
last four Free State mines – Bambanani, Joel, Matjhabeng and
Tshepong – plus all their associated surface infrastructure,
metallurgical plants, equipment, commercial and residential
properties, the Ernest Oppenheimer Hospital in Welkom, all
Anglogold’s shares in Jeanette Gold Mines and all mineral rights in
Welkom and the southern Free State gold fields, marks a new era for
the region, the companies concerned, and South African gold-mining
as a whole.
„This deal is good for the consolidation of the industry and for
Black economic empowerment,“ points out Chamber of Mines chief
economist Roger Baxter. It gives a great boost to Black-owned ARM,
which started out as a contract-mining company – and its
first contract was with AngloGold.
While marking a big advance in the consolidation of the Free State
goldfields, the deal also marks a large step forward in another
kind of consolidation as well – that is, the consolidation by
large South African gold companies on the kind of mining operations
they want to focus on.
Thus, while Harmony and ARM get to expand significantly their
specialist portfolio of older mines, which they will now
rejuvenate, AngloGold is now able to concentrate on developing its
preferred portfolio of long-life low-cost mines. Meanwhile, the
agreement between Harmony and Gold Fields Limited (GFL), which
gives the former exclusive rights to negotiate the purchase of the
St Helena and Oryx mines (also in the Free State), and GFL
exclusive rights to buy shares in Goldfields Limited (an unrelated
company) in Australia, has been extended to February 15.
The original deadline had been January 15, but it became clear that
the talks would not be completed by that date, so the extension was
agreed.
St Helena, in fact, was the first of the Free State gold mines to
be legally established, in 1946 – in those days each South
African gold-mine was floated as a separate company, listed on the
Johannesburg Stock Exchange, with one of the great mining houses as
a majority shareholder.
Keith Campbell Mining Weekly contributing editor