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| F2021 OBJECTIVES |
| Produce 277 000 6E PGM ounces by improving the selective mining of split reef and increasing mining flexibility. Focus on improving the mine’s position on the global PGM cost curve |
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| ACHIEVED/NOT ACHIEVED |
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| Production volumes were 300 172 6E PGM ounces. Increased volumes positively impacted unit production costs |
| F2022 OBJECTIVES |
| Produce 277 000 6E PGM ounces by improving the selective mining of split reef and increasing mining flexibility. Focus on improving the mine’s position on the global PGM cost curve` |
| F2021 OBJECTIVES |
| Completion of the concentrator plant expansion is scheduled for the third quarter of F2022 |
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| ACHIEVED/NOT ACHIEVED |
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| Project on track to be completed on schedule in F2022 |
| F2022 OBJECTIVES |
| Ramp up concentrator plant to full capacity by F2023 |
| F2021 OBJECTIVES |
| Achieve sales volumes of 209 000 tonnes of chrome concentrate |
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| ACHIEVED/NOT ACHIEVED |
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| Chrome concentrate sales volumes were 242 945 tonnes |
| F2022 OBJECTIVES |
| Achieve sales volumes of 251 000 tonnes of chrome concentrate |
| Commission Merensky mining in fourth quarter of F2022 |
| F2021 OBJECTIVES |
| Produce 261 000 6E PGM ounces and improve the mine's position on the global PGM cost curve. Accelerate strike development to improve mining flexibility |
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| ACHIEVED/NOT ACHIEVED |
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| Production volumes were 251 755 6E PGM ounces. Production was affected by Covid-19, safety stoppages and industrial action by employees |
| F2022 OBJECTIVES |
| Produce 270 000 6E PGM ounces with a continued focus on improving mine's position on global PGM cost curve |
| F2021 OBJECTIVES |
| Continue South 2 shaft ramp-up and achieve 55 000 tonnes per month |
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| ACHIEVED/NOT ACHIEVED |
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| South 2 shaft system produced an average of 51 000 tonnes per month (the average for 2H F2021 was 58 888 tonnes per month) |
| F2022 OBJECTIVES |
| Continue South 2 shaft ramp-up and achieve 60 000 tonnes per month |
| F2021 OBJECTIVES |
| Complete construction and commission the chrome plant in the fourth quarter of F2021 |
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| ACHIEVED/NOT ACHIEVED |
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| Due to Covid-19-related delays, commissioning is underway |
| F2022 OBJECTIVES |
| Produce 100 000 tonnes of chrome concentrate |
| F2021 OBJECTIVES |
| Preserve cash to reduce partner funding for rehabilitation provision |
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| ACHIEVED/NOT ACHIEVED |
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| Nkomati ended the year with a cash balance of R291 million |
| F2021 OBJECTIVES |
| Cease production by end-February 2021 |
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| ACHIEVED/NOT ACHIEVED |
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| Mining halted in February 2021 with last material processed through concentrator plant in March 2021 |
| F2022 OBJECTIVES |
| Focus on responsible care and maintenance |
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| F2021 OBJECTIVES |
| Ensure LTIFR below tolerance level of 0.20 per 200 000 manhours |
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| ACHIEVED/NOT ACHIEVED |
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| LTIFR was 0.04 per 200 000 man-hours |
| F2022 OBJECTIVES |
| Ensure LTIFR below a tolerance level of 0.15 per 200 000 man-hours |
| F2021 OBJECTIVES |
| Production planned at 12.6 million tonnes to accommodate risk of ongoing Covid-19 impact in F2021, thereafter sustainable production planned at 14.0 million tonnes per annum |
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| ACHIEVED/NOT ACHIEVED |
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| Production volumes were 12.7 million tonnes |
| F2022 OBJECTIVES |
| Production planned at 13.5 million tonnes to accommodate risk of Transnet underperformance and Sedibeng water-supply disruptions |
| F2021 OBJECTIVES |
| Sustain ultra-fines (WHIMS) production at 600 000 tonnes per annum |
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| ACHIEVED/NOT ACHIEVED |
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| Achieved nameplate capacity of 600 000 tonnes per annum |
| F2021 OBJECTIVES |
| Sales planned at 13.1 million tonnes to offset ongoing pandemic risk, sustainable sales are planned at 14.4 million tonnes per annum |
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| ACHIEVED/NOT ACHIEVED |
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| Sales volumes were R13.3 million tonnes |
| F2022 OBJECTIVES |
| Sales planned at 13.8 million tonnes to accommodate risk of Transnet under-performance in F2022, then sustainable sales planned at 14.4 million tonnes per annum |
| F2021 OBJECTIVES |
| Target unit production cost increases below inflation |
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| ACHIEVED/NOT ACHIEVED |
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| Unit production costs increased mainly due to higher working cost waste tonnage and lower production volumes |
| F2022 OBJECTIVES |
| Target unit production cost increases below inflation |
| F2021 OBJECTIVES |
| Ensure LTIFR below tolerance level of 0.20 per 200 000 manhours |
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| ACHIEVED/NOT ACHIEVED |
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| LTIFR was 0.07 per 200 000 man-hours |
| F2022 OBJECTIVES |
| Ensure LTIFR below tolerance level of 0.20 |
| F2021 OBJECTIVES |
| Maintain production at 2.8 million tonnes per annum |
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| ACHIEVED/NOT ACHIEVED |
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| Production volumes were 3.3 million tonnes |
| F2022 OBJECTIVES |
| Maintain production at 3.0 million tonnes per annum |
| F2021 OBJECTIVES |
| Maintain sales volumes of 2.9 million tonnes to local markets and 350 000 tonnes to export market |
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| ACHIEVED/NOT ACHIEVED |
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| Sales volumes were 3.6 million tonnes |
| F2022 OBJECTIVES |
| Maintain sales volumes of 2.65 million tonnes to local market and 350 000 tonnes to export market |
| F2021 OBJECTIVES |
| Maintain unit production cost increases below inflation |
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| ACHIEVED/NOT ACHIEVED |
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| F2022 OBJECTIVES |
| Maintain unit production cost increases below inflation |
| F2021 OBJECTIVES |
| Increase Beeshoek Mine's reserves and extend life-of-mine |
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| ACHIEVED/NOT ACHIEVED |
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| F2022 OBJECTIVES |
| F2021 OBJECTIVES |
| Reduce LTIFR to 0.25 per 200 000 man-hours |
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| ACHIEVED/NOT ACHIEVED |
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| LTIFR was 0.33 per 200 000 man-hours |
| F2022 OBJECTIVES |
| Reduce LTIFR to 0.25 per 200 000 man-hours |
| F2021 OBJECTIVES |
| Target production volumes of 4.4 million tonnes |
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| ACHIEVED/NOT ACHIEVED |
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| Production volumes were 4.0 million tonnes mainly due to the delay of Black Rock and Gloria projects and continued impact of Covid-19 |
| F2022 OBJECTIVES |
| Target production volumes of 4.5 million tonnes |
| F2021 OBJECTIVES |
| Deliver export sales volumes of 3.7 million tonnes |
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| ACHIEVED/NOT ACHIEVED |
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| Export sales volumes were 3.8 million tonnes |
| F2022 OBJECTIVES |
| Deliver export sales volumes of 4.0 million tonnes |
| F2021 OBJECTIVES |
| Target unit production cost increases below inflation |
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| ACHIEVED/NOT ACHIEVED |
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| Unit production costs increased above inflation mainly due to delays in the Black Rock and Gloria projects, together with above-inflation increases to input costs |
| Target unit production cost increases below inflation |
| F2021 OBJECTIVES |
| Maintain good safety performance |
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| ACHIEVED/NOT ACHIEVED |
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| Zero lost-time injuries |
| F2022 OBJECTIVES |
| Maintain zero lost-time injuries and good safety performance |
| F2021 OBJECTIVES |
| Commission sinter plant in July 2021 |
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| ACHIEVED/NOT ACHIEVED |
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| F2022 OBJECTIVES |
| Sinter plant to be commissioned in March 2022 |
| F2021 OBJECTIVES |
| Use manganese ore ultra-fines in BRIX recipe |
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| ACHIEVED/NOT ACHIEVED |
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| F2022 OBJECTIVES |
| Introduce alternate higher-quality sweetener in recipe |
| F2021 OBJECTIVES |
| Increase BRIX in furnace recipe (feed) to 25% |
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| ACHIEVED/NOT ACHIEVED |
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| Continuous optimisation of BRIX recipe |
| F2021 OBJECTIVES |
| Maintain safety performance, ensuring LTIFR below tolerance level of 0.20 |
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| ACHIEVED/NOT ACHIEVED |
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| Zero lost-time injuries |
| F2022 OBJECTIVES |
| Maintain safety performance, with LTIFR below tolerance level of 0.18 |
| F2021 OBJECTIVES |
| Target production volumes of 220 000 tonnes |
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| ACHIEVED/NOT ACHIEVED |
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| Production volumes were 191 000 tonnes due to multiple transformer failures in January, April and May 2021 |
| F2022 OBJECTIVES |
| Target production volumes of 234 000 tonnes |
| F2021 OBJECTIVES |
| Target sales volumes of 220 000 tonnes |
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| ACHIEVED/NOT ACHIEVED |
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| Sales volumes were 218 000 tonnes due to transformer failures |
| F2022 OBJECTIVES |
| Target sales volumes of 227 000 tonnes |
| F2021 OBJECTIVES |
| Maintain furnace efficiencies and improve unit costs by implementing cost-saving initiatives |
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| ACHIEVED/NOT ACHIEVED |
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| Furnace ore efficiencies improved 5.3% and power efficiencies by 1.3%. Multiple cost-saving initiatives kept unit cost increases at 1% |
| Maintain furnace efficiencies and improve unit costs by implementing cost-saving initiatives |
| F2021 OBJECTIVES |
| Complete phase 1 of water-treatment plant project |
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| ACHIEVED/NOT ACHIEVED |
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| Delayed mainly due to Covid-19 restrictions |
| Complete hot commissioning for phases 1 and 2 of water-treatment plant. Expected completion date is September 2022 |
1 ARM Coal holds:
– Access to Glencore Operations South Africa's interest and entitlement in the Richards Bay Coal Terminal (RBCT).
– An export entitlement of 3.2Mtpa in the phase V expansion at RBCT.
2 Participative coal business (PCB) refers to the Impunzi and Tweefontein operations.
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| F2021 OBJECTIVES |
| Continued focus on containing unit cost escalations below inflation |
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| ACHIEVED/NOT ACHIEVED |
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| Higher escalations mainly due to lower saleable production |
| F2022 OBJECTIVES |
| Continued focus on containing unit cost escalations below inflation |
| F2021 OBJECTIVES |
| Continued focus on containing unit cost escalations below inflation |
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| ACHIEVED/NOT ACHIEVED |
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| Unit costs increased in line with inflation on lower saleable production |
| F2022 OBJECTIVES |
| Continued focus on containing unit cost escalations below inflation |
| Unit | F2021 | F2020 | |||
| Gold produced | Kg | 47 755 | 37 863 | ||
|---|---|---|---|---|---|
| 000oz | 1 535 352 | 1 217 323 | |||
| Cash operating costs | R/kg | 600 592 | 553 513 | ||
| US$/oz | 1 213 | 1 099 | |||
| Financial performance | |||||
| Revenue | R million | 41 733 | 29 245 | ||
| Costs of sales | R million | (35 657) | (25 908) | ||
| Impairment of assets | R million | (1 124) | – | ||
| Gross profit | R million | 6 076 | 3 337 | ||
| Net profit/(loss) for the year | R million | 5 590 | (850) | ||
| Total headline earnings/(loss) | Cents per share | 923 | (154) | ||
| Total capital expenditure | R million | 5 142 | 3 610 | ||
| Market performance | |||||
| Average gold price received | R/kg | 851 045 | 735 569 | ||
| US$/oz | 1 719 | 1 461 | |||
| Market capitalisation | R billion | 32.5 | 43.3 |
ARM's investment in Harmony was negatively revalued by R1 426 million in F2021 (F2020: R2 996 million positive revaluation) as the Harmony share price decreased by 27% from R71.86 per share at 30 June 2020 to R52.76 per share at 30 June 2021. The Harmony investment is therefore reflected on the ARM statement of financial position at R3 940 million based on its share price at 30 June 2021.
Gains are accounted for, net of deferred capital gains tax, through the statement of comprehensive income. Dividends from Harmony are recognised in the ARM statement of profit or loss on the last day of registration following dividend declaration.
Harmony declared a final dividend of 27 cents per share, bringing their total dividend for F2021 to 137 cents per share.
Harmony's financial performance for F2021 reflects a net profit increase of 758% to R5 590 million compared to a net loss of R850 million in F2020. Headline earnings improved to 923 cents per share compared with a headline loss of 154 cents per share for F2020.
Revenue increased by R12 488 million or 43% to R41 733 million, mainly due to the operational expansion from the acquisition of Mponeng and related assets as well as an increase in the gold price received.
Production costs increased by R7 726 million or 35% to R29 774 million during F2021 predominantly due to the operational expansion as well as annual price increases.
As at 30 June 2021, net debt decreased by R819 million to R542 million. The cash generated by operations was sufficient to pay for capital expenditure, a dividend and significantly reduce the group's debt.
The reduction in debt as well as the stronger rand resulted in lower finance costs incurred during F2021 of R228 million compared with R424 million in F2020.
Harmony's results for the year ended 30 June 2021 can be found on Harmony's website: www.harmony.co.za
