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Harmony Gold Mining Company Limited - Harmony way is good in South Africa

Release Date: 04/11/2004 08:27:02      Code(s): HAR
Harmony Gold Mining Company Limited - Harmony way is good in South Africa       
Harmony Gold Mining Company Limited                                             
(Incorporated in the Republic of South Africa)                                  
(Registration number 1950/038232/06)                                            
Share code: HAR     ISIN: ZAE000015228                                          
"THE HARMONY WAY IS GOOD IN SOUTH AFRICA."                                      
Ian Cockerill, Gold Fields CEO, 3rd November 2004                               
Gold Fields Limited ("Gold Fields") seems to be confused over the issue of      
efficiency gains at its South African Operations.                               
When Harmony announced its offers, Ian Cockerill stated that Harmony"s target of
ZAR 1 billion of cost savings per annum was "beyond bold" and that he and his   
management team "have been scratching our heads" to see where these could come  
Now, Gold Fields has found that it is possible to reduce costs and has announced
new initiatives of a further ZAR 200 to 300 million in South Africa. So Harmony 
is right after all then?                                                        
However, there is one major difference between Harmony and Gold Fields - ability
versus desire.                                                                  
When asked why it has taken so long to notify Gold Fields" shareholders of the  
possibility of such cost savings, Ian Cockerill responded:                      
 "A desire to cut costs has always been part of the Gold Fields strategy but a  
desire to deliver and the ability can often be two entirely different things"   
While Gold Fields has wasted valuable time thinking about how to improve the    
performance of its South African operations, Harmony has a track record of      
delivering such performance, time and time again.  As can be seen from the      
following, based on previous experiences, Harmony"s targets for Gold Fields are 
not `beyond bold".                                                              
Planned                                   Achieved                              
           Total    Harmony    Cost       Evander St      Randfontein Elandsrand
           Cost     Cost       Savings            Helena                        
2004     Reduction  as a % of                                        
           (ZAR m)  Target     total                                            
                    (ZAR m)                                                     
Head       140      98         1.45%                                            
Total      6589                                                                 
s Cost                                                                          
Labour              330        5%         20%     18%     8%          8%        
Stores              264        4%         4%      8%      13%         2%        
Electrici           132        2%         2%      5%      3%          2%        
ty &                                                                            
Other               297        4.5%       7%      (2%)    (3%)        7%        
incl G&A,                                                                       
Contracto           66         1%         1%      2%      4%          (1%)      
Total      6729     1185       17.95%     33%     32%     35%         17%       
By applying the techniques of the Harmony Way to the Gold Fields" mines, as     
Harmony has in the past, it will extract value for all shareholders, for all    
employees and for the country. Harmony will deliver at least ZAR1 billion in    
cost savings at Gold Fields.  Together, with Harmony"s proven methodology and   
the skills and experience of the Gold Fields" employees, Harmony can transform  
the South African mining industry and build a true national champion for South  
HARMONY: THE ABILITY TO CUT COSTS                                               
4 November 2004                                                                 
Harmony will be hosting a conference call for investment analysts and the press 
at 16h30 (South Africa) today. Call numbers are available on www.harmony.co.za  
In connection with the proposed acquisition of Gold Fields, Harmony has filed a 
registration statement on Form F-4, which includes a preliminary prospectus and 
related exchange offer materials, to register the Harmony ordinary shares       
(including Harmony ordinary shares represented by Harmony American Depositary   
Shares (ADSs)) to be issued in exchange for Gold Fields ordinary shares held by 
Gold Fields shareholders located in the US and for Gold Fields ADSs held by Gold
Fields shareholders wherever located, as well as a Statement on Schedule TO.    
Investors and holders of Gold Fields securities are strongly advised to read the
registration statement and the preliminary prospectus, the related exchange     
offer materials and the final prospectus (when available), the Statement on     
Schedule TO and any other relevant documents filed with the Securities and      
Exchange Commission (SEC), as well as any amendments and supplements to those   
documents, because they will contain important information.  Investors and      
holders of Gold Fields securities may obtain free copies of the registration    
statement, the preliminary and final prospectus (when available), related       
exchange offer materials and the Statement on Schedule TO, as well as other     
relevant documents filed or to be filed with the SEC, at the SEC"s web site at  
www.sec.gov.  The preliminary prospectus and other transaction-related documents
may be obtained for free from MacKenzie Partners, Inc., the information agent   
for the U.S. offer, at the following address: 105 Madison Avenue, New York, New 
York 10016; telephone 1 (212) 929 5500 (call collect) or 1 (800) 322 2885 (toll-
free call); e-mail proxy@mackenziepartners.com. Investors and security holders  
may obtain a free copy of the Form 20-F filed with the SEC on October 5, 2004,  
as amended, and any other documents filed with or furnished to the SEC by       
Harmony at www.sec.gov.                                                         
This communication is for information purposes only.  It shall not constitute an
offer to purchase or exchange or the solicitation of an offer to sell or        
exchange any securities of Gold Fields or an offer to sell or exchange or the   
solicitation of an offer to buy or exchange any securities of Harmony, nor shall
there be any sale or exchange of securities in any jurisdiction in which such   
offer, solicitation or sale or exchange would be unlawful prior to the          
registration or qualification under the laws of such jurisdiction.  The         
distribution of this communication may, in some countries, be restricted by law 
or regulation.  Accordingly, persons who come into possession of this document  
should inform themselves of and observe these restrictions.  The solicitation of
offers to buy Gold Fields ordinary shares (including Gold Fields ordinary shares
represented by Gold Fields ADSs) in the United States will only be made pursuant
to a prospectus and related offer materials that Harmony expects to send to     
holders of Gold Fields securities.  The Harmony ordinary shares (including      
Harmony ordinary shares represented by Harmony ADSs) may not be sold, nor may   
offers to buy be accepted, in the United States prior to the time the           
registration statement becomes effective.  No offering of securities shall be   
made in the United States except by means of a prospectus meeting the           
requirements of Section 10 of the United States Securities Act of 1933, as      
The directors of Harmony accept responsibility for the information contained in 
this announcement.  To the best of the knowledge and belief of the directors of 
Harmony (who have taken all reasonable care to ensure that such is the case),   
the information contained in this announcement is in accordance with the facts  
and does not omit anything likely to affect the import of such information.     
Joint financial advisers and                                                    
investment banks               Co-financial advisers                            
HSBC           Investec        Merrill Lynch  Morgan                            
Joint transaction sponsors     Attorneys                                        
Investec       Merrill Lynch   Cliffe Dekker  Hogan and                         
Date: 04/11/2004 08:27:08 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             

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