TORONTO (miningweekly.com) – The power tariff increases in South Africa over the next three years could potentially lead to some older mines being closed earlier than would otherwise be the case, Harmony Gold CEO Graham Briggs said on Tuesday.

“It's certainly a consideration,” he conceded, answering a question during a presentation at BMO Capital Markets' Global Metals and Mining conference, in Florida.

“It's a balance between cost and grades,” Briggs said.

“Some of our orebodies have been fairly well depleted, and at high costs, and these increased costs, it certainly brings a decision probably closer.”

However, Harmony expects that its new lower-cost projects will help the group weather the cost hikes.

It is also looking at measures to use less electricity, Briggs added.

“But we have done a lot of that in the past, so the low-hanging fruit is really gone,” he said.

“Really, the new projects are where we can achieve the savings on a cost per ounce.”

EXPANSION

Like rival Gold Fields, Harmony wants to increase its geographical diversification.

The firm produced 100% of its gold from South Africa last year and, even with the contribution of the new Hidden Valley mine in Papua New Guinea, South Africa will still account for at least 90% of the total, Briggs said.

“Certainly, one of our main thrusts right now, is looking at geographical diversification,” he commented.

The company is looking for opportunities in South East Asia in particular.

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