Harmony's $1bn (R18bn) copper deal a 'sweet spot' for the company
The MAC Copper acquisition is its second foray into copper after buying the Eva Copper project in Queensland in 2022, a mine that is likely to produce up to 60,000 tonnes of the metal a year from 2029.
CEO Beyers Nel said MAC Copper's CSA Copper mine in New South Wales, which produces 40,000 tonnes of the metal a year, represented a 'sweet spot' for the group.
'There is a scramble for copper mines in the market at the moment, people pay top dollar. But we believe because this mine is a deeper mine — it is more of a mine that suits Harmony's skills set — it potentially kept other bidders out of the mine.
'It is too big for the juniors and probably too small for the majors. The 40,000 tonnes of copper from a size point of view is ideal and a sweet spot for a company like Harmony to take it. It is production from day one because it is an operating mine. It is also in a tier-one mining jurisdiction; New South Wales in Australia is a good place to mine,' said Nel.
Nel said the shift enhanced profitability, reduced geographical concentration risks, and positioned Harmony to deliver sustainable long-term returns.
He said the mine also presented near-term copper into Harmony's production mix as opposed to its Eva project in Australia and Walfi-Golpu, a gold/copper project in Papua New Guinea (PNG) it jointly owns with Newmont Corp.
He said the Walfi-Golpu project had been frustratingly slow. However despite violence at Barrick Gold Corporation's Porgera Gold Mine in Papua New Guinea's Enga province, the area was calm.
'I would not say there are problems there. It is calm. People sometimes throw one blanket over Papua New Guinea and think what is happening at Porgera with Barrick is happening everywhere in Papua New Guinea. That is not the case. Where our mine is, things are calm and the communities are supportive of the mine,' he said.
The Harmony share traded 6% lower after the announcement this week. Nel said the market still needs to digest the deal.
'It is still $1bn, it's a lot of money. It is typical that when a big transaction takes place that the buying company's share price comes under pressure.
'We are not fixated about the day trade, we think this is a good asset for Harmony's skills set and we can add a lot of value to it, there is a lot of blue sky, upside potential beyond the current mine life. We are very bullish about the copper price long term. if you think about the global energy transition and supply and demand. We need to look at the long-term perspective.'
TimesLIVE
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mail & Guardian
4 days ago
- Mail & Guardian
Infrastructure, governance failures limit growth of agriculture and development in rural areas
The rural economy depends on resource-based industries such as agriculture, mining, fishing, tourism and forestry. Photo: File On 6 August, I had an opportunity to deliver the Among other things, I emphasised that the rural economy should not be forgotten in South Africa's economic growth agenda, where there tends to be a strong urban bias in policy discussions. The rural areas are still a significant segment of society and the economy, though 68% of the population now lives in urban areas. Apart from the rural areas' reliance on remittances and social transfer payments, the one outstanding characteristic of the rural economy is its dependence on a few key industries, all of which are typically resource-based, such as agriculture, mining, fishing, tourism and forestry. With rising unemployment and low economic activity, policymakers are searching for areas of growth and job creation. For many rural areas, agriculture and tourism are the only industries that still have the potential to generate livelihoods and employment. But, for these industries to perform better, we must address the various infrastructure and governance constraints that have limited the development and growth of agriculture to its potential levels. Indeed, the sector has more than doubled since 1994, but it is not yet at capacity. We have detailed many growth-constraining issues in our latest joint work with Professor Johann Kirsten, These include: Market failures (high transaction costs, remote location); Government failures (inefficiencies, poor service delivery and corruption); Community failures (poor local institutions, vested interests of traditional leaders); and Poor land governance (lack of secure tenure). These constraints cause many rural communities to be caught in a poverty trap from which they cannot escape. What's worse, rural areas have less access to public services and infrastructure than urban areas due, partly, to the higher per-unit cost of infrastructure investment and service delivery in rural areas. This extends to 'soft' infrastructure such as healthcare centres as well as 'hard' infrastructure such as road networks, rail, silos, irrigation systems, water and electricity. This leads to low agricultural productivity and poor linkages to markets for farmers. What should be done differently to address these problems so that economic activity and employment can take off in rural areas? To an extent, these problems are well understood and were highlighted in The lack of implementation of agricultural government policy and infrastructure-related constraints comes down to the following reasons: Weak coordination and misalignment of functions and priorities between different government departments and different spheres of government. A misallocation of the budget by the national and provincial governments; and Poor coordination between the government and the private sector has led to a misalignment of transformation programmes, incentives and in some cases, vision. I won't delve into further details, especially as my book, This is a challenge that the government and the private sector should address, and refocusing on the Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. You can watch the lecture . I speak at 1:10:10 minutes.
The Herald
04-08-2025
- The Herald
Ramaphosa urges SA to adapt quickly to US 30% tariff
'South African exports do not compete with US producers and do not pose a threat to US industry. It remains our aspiration that this should continue. Largely, our exports are inputs into US industries and therefore support the US' industrial base. South Africa is also the biggest investor from the African continent into the US, with 22 of our companies investing in a number of sectors including mining, chemicals, pharmaceuticals and the food chain.' He said the government has been engaging the US to improve trade and investment relations that would benefit both countries. 'Our priority is protecting our export industries. We will continue to engage the US in an attempt to preserve market access for our products. We must also accelerate the diversification of our export markets, particularly by deepening intra-African trade.' The government has established an export support desk to assist affected producers. Ramaphosa said the government would soon announce the modalities of support packages for those affected which would also help guide industries looking to expand into markets in Africa, Asia, the Middle East and others. 'Strengthening regional value chains will be key to building resilience for our export markets in the longer-term. Much as strengthening and establishing alternative value chains will take time, this moment presents us with an opportunity to push forward with the implementation and expansion of the African Continental Free Trade Area. 'Reducing over-dependence on certain markets is a strategic imperative to build the resilience of our economy. It will also enable us to expand the frontiers of opportunity for South African businesses, goods and services. In the coming months we will scale up our trade missions into new markets in Africa and beyond, as well as the national exporter development programme whose aim is to grow the pool of export-ready companies.' TimesLIVE
Mail & Guardian
31-07-2025
- Mail & Guardian
Copper will determine South Africa's digital economy success
South Africa's digital economy is being undermined by local beneficiation for copper, which has become an essential mineral in the age of artificial intelligence — from data centres, electricity cables and battery storage. (Flickr) The economy is expected to create a jobs boom if the country can fix its electricity grid and meet the increasing demand for local copper beneficiation This content is restricted to subscribers only . Join the M&G Community Our commitment at the Mail & Guardian is to ensure every reader enjoys the finest experience. Join the M&G community and support us in delivering in-depth news to you consistently. Subscription enables: - M&G community membership - independent journalism - access to all premium articles & features - a digital version of the weekly newspaper - invites to subscriber-only events - the opportunity to test new online features first Already a subscriber?
