HARMONY GOLD MINING COMPANY LIMITED - Harmony's risk-based approach to managing impact of COVID-19Release Date: 20/04/2020 10:49:00 Code(s): HAR PDF(s):
Harmony's risk-based approach to managing impact of COVID-19
Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
JSE share code: HAR
(“Harmony” or “the Company”)
HARMONY’S RISK-BASED APPROACH TO MANAGING IMPACT OF COVID-19
Johannesburg, Monday, 20 April 2020. Harmony Gold Mining Company
Limited (“Harmony” and/or “the Company”) noted, supports and commits
to comply fully with the requirements of the amended lockdown
regulations announced by the South African Government on 16 April
Committed to a safe resumption of underground operations
During the remainder of the current national lockdown period, to the
end of April 2020, operations at our underground mines will resume
and will be conducted at a reduced capacity of not more than 50% and
thereafter at increasing capacity as determined by the Minister of
Mineral Resources and Energy. The Company anticipates that it will
take up to five working days to restart its underground operations.
The Company rolled out a risk assessment-based COVID-19 prevention
strategy across all of its operations before the lockdown was
announced in March 2020 (see our SENS announcement released on 18
March 2020). The objective of the risk assessment is to identify,
evaluate and rank the hazards associated with any exposures to COVID-
19 and potential infections. It allows the Company to reduce or
eliminate the probability of an employee contracting COVID-19 and to
limit the severity should an employee be infected.
Harmony’s COVID-19 Standard Operating Procedure (“SOP”) is aimed at
ensuring a safe return to work for each of its employees and meeting
the conditions contained in the amended lockdown regulations
published in the Government Gazette on 16 April 2020 for the safe
resumption of operations. It has been informed by guidelines provided
by the Department of Mineral Resources and Energy, the National
Council for Infectious Diseases (“NCID”), the World Health
Organisation (“WHO”), discussions with our trade unions and the
Minerals Council South Africa.
All requisite staffing, facilities and equipment, as well as
communication and education mechanisms, are in place to ensure:
- rigorous screening as employees return to work and when at work;
and if employees show
COVID-19 symptoms, to test and treat these employees for COVID-
- quarantining of employees who test positive for the virus.
Harmony has identified two quarantine sites – one at Brand 5
hostel in Welkom (Free State) with over 200 rooms available and
a quarantine facility with 150 rooms in the Klerksdorp area
- submission of data collected during screening and testing to the
- transport of South African employees from their homes in the
remote labour sending areas back to the Company’s mines;
- recall of workers from neighbouring Southern African Development
Community countries will be done at the end of lockdown in those
- care and counseling of employees deemed to be vulnerable;
- preventive personal hygiene measures; and
- social distancing and relevant controls in high density areas;
a large congregation of people will not be allowed.
Harmony has a medical hub at each of its mines. These hubs are staffed
with medical professionals, with at least one qualified doctor per
hub, supported by qualified nurses.
In respect of the safe resumption of mining operations at its South
African mines, the Company has conducted its own audits to check that
the operations have adhered to its COVID-19 SOP. We have also agreed
with our trade unions that they may conduct similar safety audits in
conjunction with our management teams, to provide them with the
assurance that our employees’ safety and health are protected.
Investors should note that in terms of South Africa’s Disaster
Management Act 57 of 2002 ("DMA"), irrespective of the date on which
the operations re-open or the lockdown is uplifted, the state of
disaster remains in place for three months from the declaration date,
or such earlier or extended date. Therefore, Harmony will ensure on-
going compliance with the DMA COVID-19 regulations until mid-June
2020, or such time as the period is extended.
Harmony’s Hidden Valley mine in Papua New Guinea has continued to
operate during the COVID-19 State of Emergency declared in that
country. The delivery of essential supplies to the mine have
continued, with strict isolation control measures in place. All non-
essential staff has been removed from site and certain activities and
expenditures have been curtailed to focus on safe, profitable
operations during the pandemic. Protocols are being developed to allow
the safe movement of personnel to and from site during this period.
Stronger free cash flow in Q3 FY2020
Harmony is cognisant of shareholder interest in and concern about the
impact of the current global pandemic on its business. The Company
is pleased to announce that an approximate 55% increase in operating
free cash flow margin is expected for the quarter ended 31 March 2020,
compared with the quarter ended 31 December 2019. This is attributable
to an estimated 11% increase in the gold price received. The average
recovered grade at our underground operations in South Africa was
about 7% higher quarter on quarter. Total gold production quarter on
quarter, was approximately 8% lower, due largely to the impact of the
COVID-19 lockdown announced on 23 March 2020 and the usual slower
start-up after the Christmas break.
A more comprehensive operational update on the nine months ended March
2020 will be provided during the first week of May 2020.
Balance sheet protection measures
The Company has committed to several measures to protect its balance
sheet in the face of the global pandemic.
- cash preservation
- suspension of exploration and major capital projects;
- rolling forward a majority of our hedge transactions maturing from
the middle of April 2020 up to the end of May 2020, into the first
three quarters of the new financial year. This was also done to
better match the gold production;
- declaration of force majeure on select supplier agreements;
- drawing down on our Rand and US Dollar facilities to ensure
sufficient liquidity during the lockdown and as we start up our
underground operations; and
- not committing to any new debt facilities.
The operating and financial information provided in this announcement
is the responsibility of the directors of Harmony, and such
information has not been reviewed or reported on by the Company´s
auditors. The operating and financial information provided does not
constitute an earnings forecast.
“Harmony employees belong to the Harmony family and are important to
us. We are committed to protecting their health and ensuring a safe
working environment. We are grateful that we can start up our
underground mines and undertake to do so responsibly. Every possible
mitigating and preventative process, procedure and control has been
adopted to ensure that we start-up in a safe, controlled and
accountable manner,” said Peter Steenkamp, chief executive officer.
FOR MORE DETAILS,
Marian van der Walt
Executive: Corporate and Investor Relations
+27 (0) 82 888 1242
Manager: Investor Relations
+27 (0) 82 759 1775
Johannesburg, South Africa
20 April 2020
J.P. Morgan Equities South Africa Proprietary Limited
Date: 20-04-2020 10:49:00
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