Harmony Gold diversifies into copper with MAC Copper acquisition
Harmony Gold's Doornkop Mine. Harmony Gold is diversifying into copper after completing a transaction for the acquisition of New York listed MAC Copper Limited
Harmony Gold is diversifying into copper after completing a transaction for the acquisition of New York listed MAC Copper Limited, which controls CSA Copper mine in Australia for about $1 billion (R17.9bn).
Copper, deemed a future proofing mineral, has been the center of merger and acquisition activity among South African and global miners.
The South African gold miner said Tuesday that it had entered into a binding agreement to acquire 100% of the securities in MAC Copper Limited for $12.25 per share. This implied a total equity value for MAC of $1.03bn or about R18.4bn.
'The acquisition of the CSA Copper Mine in Australia is significant as it introduces a high-quality, established underground producing copper asset to the Harmony portfolio. CSA is one of the highest-grade copper mines in Australia, producing 41kt of copper in calendar year 2024,' said Harmony Gold CEO Beyers Nel.
He described the Australian mine Harmony Gold was acquiring as 'a logical fit with the portfolio' as it meets the company's 'core investment criteria, including increasing free cash flow generation while improving margins at long-term expected commodity' prices.
'We believe that Harmony is well positioned to leverage its expertise in underground mining to further enhance operations. Furthermore, the Transaction represents a significant step forward in transforming Harmony into an increasingly de-risked, higher-quality, global gold and copper producer through disciplined and effective capital allocation,' added Nel.
Earlier this year, Nel said the operating environment in South Africa has started to stabilise, helping the company to lift up earnings for the half year to December although analysts had varying evaluations of the gold miner's diversification strategy into copper.
In the half year to December, Harmony Gold raised revenues by 19% to R35.45 billion, with net profits for the period jumping 33% to R7.93bn and headline earnings per share also soaring by 33% to 1 270 SA cents. View: www.businessreport
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