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HARMONY GOLD MINING COMPANY LIMITED - HARMONY GOLD MINING COMPANY LIMITED

Release Date: 04/11/2004 12:34:31      Code(s): HAR
HARMONY GOLD MINING COMPANY LIMITED - HARMONY GOLD MINING COMPANY LIMITED       
("HARMONY") DETAILS OF EFFICIENCY GAINS AT GOLD FIELDS LIMITED ("GOLD FIELDS")  
Harmony Gold Mining Company Limited                                             
(Incorporated in the Republic of South Africa)                                  
(Registration number 1950/038232/06)                                            
Share code: HAR     ISIN: ZAE000015228                                          
("Harmony")                                                                     
Harmony Gold Mining Company Limited ("Harmony") Details of Efficiency Gains at  
Gold Fields Limited ("Gold Fields")                                             
Harmony today announced details of its proposed cost saving measures, which will
deliver at least ZAR1billion per annum in improved pre-tax operating profit at  
Gold Fields" South African operations.                                          
Harmony Chief Executive, Bernard Swanepoel said:                                
"Now that we have seen the detail of Gold Fields defence, we are providing      
detail of our own cost savings proposals - we wouldn"t have wanted to give Gold 
Fields a route map to success prior to the launch of their defence.             
"Last week Gold Fields announced new cost savings initiatives of ZAR 200 to 300 
million in South Africa, though given the circumstances one has to treat this   
with a pinch of salt.  However, it does confirm the potential for cost savings  
that Harmony has identified.  The key difference between Harmony and Gold Fields
is that while Gold Fields has spent 6 years thinking about efficiency           
improvements, Harmony has a track record of delivering such improvements time   
and time again."                                                                
Harmony has stated that it can achieve sustainable cost reductions equivalent to
15% per annum in Gold Fields" South African cost structure, over and above Gold 
Fields current efficiency initiatives.  Harmony will do this through applying   
the `Harmony Way", which has been so effective at other mines in South Africa,  
including mines previously owned by Gold Fields.                                
Specifically for Gold Fields current operations, Harmony sees opportunities to  
improve the cost structure as follows:                                          
Planned Savings at Gold Fields           Previously Achieved Savings            
Total  Harmony    Cost      Evander St      Randfontein Elandsrand 
             Cost   Cost       Savings           Helena                         
              2004  Reduction  as a %                                           
             (ZAR   Target     of                                               
m)      (ZAR m)   total                                            
Head Office  140    98         1.45%                                            
Total        6589                                                               
Operations                                                                      
Cost                                                                            
Labour cost         330        5%        20%     18%     8%          8%         
Synergies:                                                                      
Stores              264        4%        4%      8%      13%         2%         
Electricity         132        2%        2%      5%      3%          2%         
& Water                                                                         
Other cost,         297        4.5%      7%      (2%)    (3%)        7%         
incl G&A,                                                                       
Services                                                                        
Contractors         66         1%        1%      2%      4%          (1%)       
Total        6729   1185       17.95%    33%     32%     35%         17%        
Savings from                                                                    
operations                                                                      
Capital      880    66                                                          
Optimisation                                                                    
Additional          (150)                                                       
Development                                                                     
Total Cost          1101       16.36%                                           
Savings                                                                         
"We have based these targets on our previous experience so this is not just     
wishful thinking, even without full due diligence.  The Harmony Way is to reduce
overall costs and to increase the proportion of jobs actually at the mining     
level.  Our history shows that we are job preservers in that we are able to     
extend the life of the mines we acquire.                                        
"In the case of Gold Fields, any jobs lost will be at the head office, senior   
management and service level," said Bernard.                                    
The development of the Gold Fields" mines is another key aspect of Harmony"s    
proposal.  While Gold Fields has effectively put these mines in harvest mode,   
Harmony intends to invest in their future.  Again, Harmony has done this in the 
past, turning previously abandoned reserves into growth projects.  When these   
projects are completed, abandoned reserves from previous Harmony acquisitions   
will produce an aggregate of over 1.5 million higher-grade, lower cost          
additional ounces per annum.                                                    
"Gold Fields is condemning its South African assets to a lingering death.       
Harmony will enhance their life.  As Ian Cockerill said at the presentation of  
Gold Fields" formal defence, `The Harmony Way works in South Africa.....",""    
commented Bernard.                                                              
Attached: Note to Editors - The Harmony Way                                     
Harmony will host a conference call at 1630hrs (South Africa) 0930hrs (EST)     
today.  Slides for this call will be available at 1530hrs (South Africa) 0830hrs
(EST) on www.harmony.co.za                                                      
South Africa                            UK                                      
Toll:          011 535 3600             Toll Free:     0800 917 7042            
Toll Free:     0800 200 648                                                     
USA                                Canada                                       
Toll:          1 412 858 4600           Toll Free:     1 866 519 5086           
Toll Free:     1800 860 2442                                                    
Australia                          Europe and Other                             
Toll Free:     1800 350 100             Toll:          +41 916 105 600          
                                   Toll Free:     +800 246 78 700               
Issued by (direct line, mobile):                                                
Harmony Gold                                                                    
Ferdi Dippenaar          +27 11 684 0140     +27 82 807 3684                    
Corne Bobbert       +27 11 684 0146     +27 83 380 6614                         
South Africa - Beachhead Media & Investor Relations                             
Jennifer Cohen      +27 (0)11 214 2401  +27 (0)82 468 6469                      
Patrick Lawlor      +27 (0)11 214 2410  +27 (0)82 459 6709                      
United States - Financial Dynamics Business Communications                      
Hollis Rafkin-Sax   +1 212 850 5789     +1 917 509 0255                         
Torie Pennington    +1 212 850 5629     +1 917 838 1369                         
United Kingdom - Financial Dynamics Business Communications                     
Nic Bennett         +44(0)207 269 7115  +44(0)7979 536 619                      
Charles Watenphul   +44(0)207 269 7216  +44(0)7866 438 013                      
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      
amended.                                                                        
Forward-looking Statements                                                      
Statements in this announcement include "forward-looking statements" that       
express or imply expectations of future events or results.  Forward-looking     
statements are statements that are not historical facts.  These statements      
include financial projections and estimates and their underlying assumptions,   
statements regarding plans, objectives and expectations with respect to future  
operations, products and services, and statements regarding future performance. 
Forward-looking statements are generally identified by the words "expect,"      
"anticipates," "believes," "intends," "estimates" and similar expressions.  All 
forward-looking statements involve a number of risks, uncertainties and other   
factors, and Harmony cannot give assurances that such statements will prove to  
be correct.  Risks, uncertainties and other factors that could cause actual     
events or results to differ from those expressed or implied by the forward-     
looking statements include, without limitation, the satisfaction of closing     
conditions, the acceptance or rejection of any agreement by regulators, delays  
in the regulatory processes, changes in the economic or political situation in  
South Africa, the European Union, the United States of America and/or any other 
relevant jurisdiction, changes in the gold industry within any such country or  
area or worldwide and the performance of (and cost savings realised by) Harmony.
Although Harmony"s management believes that the expectations reflected in such  
forward-looking statements are reasonable, investors and holders of Gold Fields 
securities are cautioned that forward-looking information and statements are    
subject to various risks and uncertainties, many of which are difficult to      
predict and generally beyond the control of Harmony, that could cause actual    
results and developments to differ materially from those expressed in, or       
implied or projected by, the forward-looking information and statements.  These 
risks and uncertainties include those discussed or identified in the public     
filings with the SEC made by Harmony and Gold Fields, including those listed    
under "Cautionary Statement Concerning Forward-Looking Statements" and "Risk    
Factors" in the preliminary prospectus included in the registration statement on
Form F-4 that Harmony filed with the SEC.  Harmony does not undertake any       
obligation to update any forward-looking information or statements. You may     
obtain a free copy of the registration statement and preliminary and final      
prospectus (when available) and other public documents filed with the SEC in the
manner described above.                                                         
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.     
NOTE TO EDITORS - THE HARMONY WAY                                               
A fundamental aspect of Harmony "s success has been the application of the      
unique "Harmony Way ",a set of management practices and philosophies that       
essentially flatten the management structure and empower individuals and mine   
management teams.  Four cornerstones underlie this approach:                    
1.Creating value is about the business of gold mining                           
We spend money on what really counts -the business of gold mining -most         
importantly it is an intense focus on the development and optimisation of the   
value contained in the ore body.  It is this scientific approach to ore body    
optimisation and disciplined approach to cost reduction which has enabled       
Harmony to successfully make money out of mines that other operators have       
regarded as throwaway. These principles apply equally to existing long life     
operations.                                                                     
2.No frills                                                                     
Our disciplined cost management approach enables us to reduce cut-offs,  thereby
dramatically increasing the proportion of the ore body that is available to be  
mined economically -thus increasing the number of ounces in the ore body,       
extending the life of mines and saving jobs.                                    
Some people criticise Harmony "s "no frills "approach.  However, our people take
pride in the fact that we don "t spend money on anything that isn "t revenue    
generating (like the thickness of the carpet, the neatness of the gardens, and  
the smoothness of the roads).At Harmony the "garden "is underground, i.e.our ore
body. That "s where our focus and our future lie.                               
3.We believe in the ability of our people -all our people                       
We believe that it "s our crews operating underground that make the difference. 
They are the key revenue generators in our business. The rest of us are actually
"costs "-which need to be justified as adding value or delivering a cost        
efficient service to enable the crew at the rock face to perform the task of    
extracting the ore body more efficiently.                                       
4.We are lean                                                                   
The management structures that outsiders see are a real demonstration of this   
belief.  We have a head office/corporate office, which accommodates no more than
eight executives. We have no mine related regional offices and extremely flat   
management structures on our operations. We have forgone the convoluted         
hierarchical structures that have traditionally dogged the mining industry and  
are fundamentally based on the premise of supervisors to supervise supervisors. 
Instead, Harmony has four levels of management on each shaft because that is    
what we believe is needed to mine optimally. The 26 heads of individual mines   
and plants report directly to the executive team.  By creating an enabling and  
empowering environment, the individual "s productivity improves and consequently
the efficiency and the overall performance of the entire business improve.      
In summary, the Harmony Way is not rocket science ...anything but.  It "s a back
to-basics approach which brings simple, yet dynamic, business thinking (cost,   
value, focus and attention to detail)to the mining equation; a philosophy that  
if you create the right environment, ordinary people will do extraordinary      
things; all wrapped up in a belief that the right attitude can make ANYTHING    
possible.                                                                       
Date: 04/11/2004 12:34:37 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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