Gold miner Harmony Gold recorded a 3% year-on-year rise in gold production to 36 453 kg, or 1.17-million ounces, for the 2014 financial year.

However, its operating profit dropped to R3.8-billion, down 5% year-on-year, owing to a 5% drop in the rand gold price and a 4% rise in cash operating costs.

Speaking at the results present-ation, held in Johannesburg, last week, Harmony CEO Graham Briggs highlighted that the company’s capital expenditure (capex) had decreased by 30% year-on-year to R2.5-billion “as planned”.

This is due to a decrease in capex at the greenfield Hidden Valley project, in Papua New Guinea.

Cash operating costs, however, increased by 6%, or R180-million, in the quarter ended June 30, owing to a rise in consumables and higher winter electricity tariffs for the company’s South African operations.

Meanwhile, in terms of all-in sustaining costs (AISC) – a new cost reporting metric developed by the World Gold Council that covers day-to-day operations, and an ‘all-in cost’, which includes all capex, including growth projects – Harmony Gold achieved a stable 4% year-on-year reduction to R413 433/kg.

“We are satisfied with the year despite fairly abundant opera-tional challenges experienced at our larger operations, which was compounded by the low gold price,” says Briggs.

At the presentation, Briggs also highlighted Harmony’s increased focus on safety, having experi-enced “far too many fatalities during this year”, including fatalities at its Masimong and Tshepong mines, near Welkom, the Doornkop mine, west of Johannesburg, the North West-based Kusasalethu mine and the Free State-based Joel mine.

COO Alwyn Pretorius adds that, although the miner has made significant progress in terms of safety in the past three years, much has still to be done.

“Since undertaking an external safety audit this year, we have put a safety improvement plan in place that focuses on the imple-mentation of industry best prac-tises at all our operations.”

“Since undertaking an external safety audit this year, we have put a safety improvement plan in place that focuses on the implementation of industry best practises at all our operations.”

He further notes that, while the safety audit has revealed that the company has sufficient standards and risk management processes in place, its strategy is not proactive enough.

As a result, the gold miner has built leading indicators, as opposed to lagging indicators, into its safety management system.

This is being done in collaboration with the Department of Mineral Resources.

Meanwhile, Harmony this year also revised its five-year strategy based on three key strengths, namely improving its margins, growing the value per share of its Papua New Guinea assets, and identifying openpit mines and bulk mining project acquisition opportunities outside South Africa.