• OPERATIONS
TECHNOLOGY SUPPORTS ESG AT ITS BEST AT HARMONY ’ S MWS
Compiled by Sharyn Macnamara
With the help of smart tech , Harmony invests to re-invigorate an ailing economy in SA ’ s North West province .
All images supplied by Harmony Gold Mining Company Limited
On 23 October 2024 , Harmony Gold Mining Company Limited announced that the final delivery has been made into the streaming agreement between Franco- Nevada and Mine Waste Solutions ( MWS ). 1 Furthermore , Phase 1 of the Kareerand tailings storage facility ( TSF ) expansion project had been commissioned and delivered on time and within budget – injecting 15 additional years of life into MWS – benefitting the economy of the region both directly and indirectly .
Smart tech ensures the safety at the TSF facility , its operators and the surrounding community . This project in the Vaal River region is just one of three similar Harmony projects to be completed in South Africa .
MWS is a tailings re-treatment operation near Klerksdorp in North West province that reprocesses low-grade material from old TSFs scattered across the region to reduce the tailings footprint . It was acquired in 2020 as part of the Mponeng related assets transaction . With the contract completed , MWS ' s average gold price is now in line with market prices and flows directly into Harmony ’ s bottom line . At the end of 2024 , expectations were that MWS ' s free cash flow would increase by more than R1-billion on an annualised basis , assuming the spot Rand per kilogram gold price at the time .
Harmony allocated a total of R2.3-billion to the Kareerand TSF expansion project in FY24 and FY25 , andFY25 and intends to invest a further R1.2-billion this year to complete phase 1 of the extension .
The Kareerand TSF has been constructed in line with the guidelines of the GISTM and now covers an area of 900 hectares in total – equivalent in size to around 700 rugby fields .
Streaming agreement history : Harmony ' s subsidiary , Chemwes , the owner of the MWS operation , entered into a contract with Franco-Nevada Barbados ( Franco-Nevada ) where Franco-Nevada was entitled to receive 25 % of all the gold produced through MWS at a predetermined price . MWS was included in the acquisition of Mponeng and related assets transaction on 1 October 2020 . Harmony assumed the obligations determined in the Franco-Nevada contract and delivered the outstanding 100 686 ounces .
The contract was a streaming agreement that commenced on 17 December 2008 . Franco-Nevada paid USD125-million upfront for the right to purchase 25 % of the gold production through MWS for a fixed amount of consideration until the balance of the gold cap was delivered . The gold cap was a provision included in the contract , which stipulated the maximum quantity of gold to be sold to Franco-Nevada over the term of the agreement . It was calculated that the gold would be delivered throughout the original life of the mine and would terminate once the required gold had been delivered . The consideration for the contract was determined as the lower of the quoted spot gold price as per the London Metals Exchange , or USD400 per ounce , adjusted with an annual escalation adjustment .
Phase 1 Apart from the generation of high margin free cash flows , this project is enabling the rehabilitation of land and is moving old tailings facilities away from communities . The increased storage capacity resulting from the completion of the expansion and the extension of the LOM to 2040 will enable the continued re-mining of old tailings in the region . The range of benefits this expansion has created includes the creation of work for local contractors during construction and the maintenance of long term job opportunities .
The Kareerand TSF has been constructed in line with the guidelines of the Global Industry Standards on Tailings Management ( GISTM ) and now covers an area of 900 hectares in total – equivalent in size to around 700 rugby fields . Harmony said that the advantage of having a single site here is that long term environmental impact can be concentrated and controlled in a contained environment .
Based on the classification of this TSF , there is comprehensive and integrated risk management throughout the design , construction and management of the TSF . The minimum factors of safety are calculated for drained conditions ( above 1.5 ), undrained peak strengths ( above 1.5 ) and undrained residual strengths S ( above 1.1 ). The design criteria applied to the design to assess for a flood condition is a 1:10 000 year storm event and for an earthquake condition , a 1:10 000 year seismic event .
20 • African Mining • March 2025 www . africanmining . co . za