Harmony Gold CEO Shares Optimism on Industry Growth and Cultural Transformation at Mining Indaba

Earlier today, my colleague Fifi Peters caught up with one of the world's largest gold producers at the on-going Mining Indaba in Cape Town. Let's take a look at that conversation with Peter Steenkamp, CEO at Harmony Gold. Our focus on this Mining Indaba is more about the building of our projects, where we want to go, the financing of that. Obviously, we cannot speak to investors because we are in a closed period, so we really use this time to catch up with potential growth and potential investors and potential banks. Just reflecting on the fact that you are in a closed period, last week, Thursday, I believe it was, I think you gave a number of your investors a little bit of relief, just confirming the fact that your full year production guidance is very much on track. What can you say about the state of your industry right now? I think our gold miners are actually in a good space, a good price, especially in the rent kilogram terms. Our operators have done quite well for the first six months of the financial year, so we are very happy with the performance of the mines. We are quite confident about our performance for the year. I think importantly is that we had, as you can see in our result, a good grade improvement, and that's on the back of some of our assets, including that we are doing well. In terms of the broader theme of this year's Endeavor, it speaks to further disruption, as it were. I think maybe even the mining industry being ahead of the curve of the disruption that is happening from a technological point of view, and perhaps also from commitments around ESG. How is Harmony Gold interpreting the theme around disruption, and what does disruption look like in your mine? I think it's in all different areas. For instance, in new energy, it is about women in mining, and it's about all these other kinds of things that want to be in place. I think I'll be glad to say that we have very strong plans, and we've been very successful in integrating all these new gender-based violence opposing, and women in mining, and also things like, for instance, our new energy. Already we have our first phase completed, and we're now very far down the line with the second phase of that. Safety, I mean, this is something that comes up all the time. Yes, we had, in our calendar year, we had probably the best performance ever in the history of Harmony. Certainly, we have a much bigger Harmony than we used to be in the past, so that obviously helps a lot. But, you know, obviously we can never stop in our efforts to do that. But we are very glad to see the efforts that we've put in, especially on the cultural transformation side, is now starting to bear fruit. We had, you know, out of the nine mines, we had seven, you know, millionaires, and out of those seven, five of them were multi-millionaires. So that's, you know, in gold mining terms, that is very good performance. So yes, there are still areas that we need to fix, and I'm glad to say, you know, the mine that we have, from a safety perspective, was always our biggest problem was Casals-Aletou, and we had a very good run of Casals-Aletou. So you mentioned some of the conversations that you are having here, with particularly your lenders, and all the things that are important for both of you to discuss. Of course, we know that policy makers are also here. I've seen a couple of ministers of mines from across the continent. Just your reflection on the policy environment then, and what kind of conversations you're having there. You know, personally, I think, you know, especially for us operating in South Africa, we have a very stable policy environment now for a long period of time, and we have a very supportive minister of mines that really helped us. And, you know, we did quite a number of transactions in a period that he was in charge of mining, and always had a lot of support from his side. And, you know, also with my role in the Minerals Council, it's actually good to have a minister that understands mining, understands, you know, what it needs to actually get an operation, you know, mines work. So, very happy with that. You know, policy, obviously, the other one is now in Australia, which is obviously a First World country, and we really have no issues as far as policy is concerned. And the other one is Papua New Guinea, where, again, we have a, you know, I think a very good regime. We are slowly but surely progressing our, you know, licensing of Wafi Golpu. And looking forward to this year to actually conclude the licensing of that. Sure. Talking about Wafi Golpu, of course, you've got a new partner there, just following a new mines acquisition of the Newcrest last year, them assuming that partnership as a result of that acquisition. Again, there, respecting the fact that you are in a closed period, but what can you tell us about that partnership right now? No, the partnership is working perfectly well. We've obviously had the PNG conference at the end of last year, had lots of time to catch up with the Newmont team. Tom Palmer, obviously, being the CEO there, and, you know, we've got a longer relationship with that. We also have, funnily enough, quite a number of South Africans there. Right. Alvin Pretorius used to work in Harmony. He's now the country manager for PNG. And obviously, Natasha is out there. So, it's a, no, I think, you know, it's a wonderful partner to have, and we really get along really well with them. Peter, just picking up on the comment that you made about the business environment right now in South Africa, as the largest South African gold miner in this country, we do know that what has hurt your industry is the situation around power and also the situation around logistics. Just what can you say there regarding whether you are seeing an improvement on those two lines? Yeah, of course. I mean, the logistics doesn't really affect Harmony because we don't have bulk commodities that we want to transfer to ports and things like that. But we do, obviously, have, you know, the energy is an issue for us. We don't get load shedding. We get load curtailment. So, we actually can manage, you know, our load cuts to the best of our ability. And over time, we've obviously become very good at it in terms of being able to cut where we can, and then obviously making sure that we have, you know, if you run four pumps, you run three for a period, and then you get back to the four pumps, and those kind of things. So, we are managing these things. They are not ideal. It's a 24-7 control room environment that you have to sit down and think about how you're going to manage these cutbacks. So, we went through quite a bad spell, I think, last year at one stage. But, you know, we managed to get through it without any interruptions. So, and I think, you know, where we are now as a country, our load shedding levels are down. The curtailment is not asked that often. So, we are at this point in time, you know, managing it all the time. So, since the load, or the energy crisis in Africa, we've never actually had a point where it affected our production up to now. But again, it took a lot of effort, and I take my hat off for my teams, because, I mean, they have to constantly manage these things, and that's not always an ideal environment to be in. No, of course, not for anyone. We were just conducting an interview, and during the interview live, the lights went out. So, you can imagine as a viewer at home, when you're watching this darkness, not pleasant at all. I also want to reflect on the fact that the mining endeavor is marking its 30th year anniversary, which also happens to coincide with the 30th anniversary of South Africa as a democracy. So, just, I suppose, a more throw forward for the outlook for your industry as you do see it. I mean, for gold players like yourselves, what we are seeing is a whole lot of diversification into other metals and minerals, particularly those that will be critical for the future. But when you do look at the future of mining from a South African, perhaps even a global context, what does that look like? Yeah, I think, one, they have to look at South African mining, you know, with and without gold. And if you look at it without gold, it's actually, in fact, you know, not doing badly. It's actually growing, and we can, and we have potential to grow, certainly for the areas. Obviously, there will be less demand on coal, there will be less demand on platinum going forward, and that will have an effect on, you know, our minerals that we mine. But then, of course, you know, with manganese, iron ore, other commodities as well. On the gold side, obviously, we got to the end of the big Basin mining, and there's still a number of mines that can continue, like Moab Katsong, which we are currently doing, telling through treatment, but also potential of expanding or deepening and putting mine out there. There's the Target North project that we were drilling now of late. We will come back to the market in terms of the results, but it's, you know, it's still that one gap that is still available to be mined going forward. You know, we encourage what we saw there, but obviously, we still have to put the models and everything together to make sure that this is a real viable opportunity. But it is a mine that's going to be a three and a half kilometre deep mine, you know, quite a massive capital in terms of mine to build, you know, and we have to find, you know, the appetite to do things like that as a company, but also as a country. Sure. But, yeah, so, but, so, you know, it is a still environment, you know, that's got pockets of growth somewhere, but obviously not what it used to be, especially in gold mining in the past. But South Africa, again, you know, we have to go to the top of minerals that's going to be there for the future, and we need to go and find those and mine those. And that was Peter Stink, CEO at Harmony Gold.

CNBC Africa’s Fifi Peters caught up with Peter Steenkamp, CEO at Harmony Gold at the on-going Mining Indaba in Cape Town. 

Steenkamp: Cultural transformation bearing fruits at Harmony Gold

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Steenkamp: Cultural transformation bearing fruits at Harmony Gold

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