Latest news with #R100-billion
Daily Maverick
27-05-2025
- Business
- Daily Maverick
Harmony Gold strikes R18bn copper acquisition Down Under
Copper is king these days, and the price for such assets is probably only going to keep going north amid warnings about looming shortages of the red metal. With record gold prices filling its sails, Harmony Gold went on a fishing expedition Down Under and landed a big one. The JSE-listed miner said on Tuesday that it had acquired MAC Copper Limited – which has one asset, the high-grade CSA copper mine in Australia – for $1.03-billion (R18.4-billion) in cash. The deal makes sense on a range of fronts. Harmony is on a diversification drive away from gold and its South African base – and copper has long been on its sonar screen. Copper is highly coveted these days because of its applications to the green-energy transition and its older industrial uses. But investors, who have shown themselves wary at times of M&A in mining, did not immediately rise to the bait. Harmony's share price initially sank over 7% on the news – a move that was also partly a reflection of a fall in the gold price overnight – before regaining some of the lost ground. There is often a knee-jerk reaction to the announcement of such deals and this move in that regard is not exceptional for the company that is buying. In 2022, Gold Fields' share price tanked more than 20% after it announced its intention to acquire Canada's Yamana Gold in an all-share deal worth R100-billion – a deal that eventually came unstuck. 'I think the market needs to digest the deal,' Harmony CEO Beyers Nel told Daily Maverick. As the deal is digested, the market may find it more appetising. Strategic boxes ticked Copper these days is king, and the price for such assets is probably only going to keep going north amid warnings about looming shortages for the red metal. For Harmony, it ticks its main strategic boxes: copper exposure and geographical diversification – and the company does not need to build a new mine from scratch. 'This is cash-generative from day one,' Nel said. The CSA mine is one of the highest-grade copper operations in Australia and has a current reserve life of 12 years with what Harmony said was '… significant exploration potential.' At 1.9km deep, the mine is down under in more ways than one. But Harmony owns and operates Mponeng, the world's deepest mine west of Johannesburg, which is more than twice as deep, so its engineers are not intimidated. The deal will also complement Harmony's Eva copper project, which it is aiming to approve this year. Harmony's offer is a 20.7% premium on MAC's closing price on 23 May. The target company's board has unanimously backed the proposal as well as more than 20% of its shareholders. Harmony expects the deal to be finalised by the fourth quarter of this year. The transaction will be paid with $50-million (R893-million) from Harmony's current cash resources. The rest will be financed by a bridging facility, which is effectively a short-term loan to 'bridge' the gap and enable the deal. 'It's an interim arrangement to pay for the transaction. It's just 12 months with an option to extend,' Nel said. Harmony is in a good position for such a financial arrangement. The asset it wants to acquire will generate cash immediately and Harmony is pumping money from its gold operations as the precious metal's price remains elevated and not far off its record peak of around $3,500 (R63,000) an ounce scaled in April. What this means Harmony is raking in cash at the moment, but the price of gold may eventually fall back to earth. Demand for copper, by contrast, looks set to surge as the global economy and the green energy transition will both sink without it. Everyone wants a piece of the copper action these days, and not just South Africa's cable thieves. It's better to secure a copper asset now because down the road, they are likely to be rare and much more costly. For Nel, who has been CEO since only the start of this year, the transaction – if it goes through – will be an ostrich feather in his hard hat. A big, bungled deal can cost a CEO his or her job. By contrast, a blockbuster that delivers long-term value goes down well in the boardroom. DM
Daily Maverick
09-05-2025
- Automotive
- Daily Maverick
Hallelujah and praise be, give thanks for the humble N2 and our national highways
Gather round, people and join me in celebration. I wish to sing a paean of praise for… the N2. The nation's coastal artery runs from Cape Town to Hluhluwe through divergent and often glorious landscape before twisting north past Eswatini and (who knew?) ending its 2,214km life deep inland on the eastern highveld at Ermelo. I have no knowledge of anything on the N2 north of King Shaka Airport, but much of the rest in KZN, the Eastern Cape and the Western Cape I have travelled on in recent times and can report very positively. Sanral – the government organisation responsible for our national roads – gets a bad rap, largely because of its poorly thought-through and costly idea to toll the commuter motorways around Johannesburg. But, to my eyes, they are a functional bunch who do a pretty good job. Our major road infrastructure is generally solid and a source of wonder to visitors from the US, Italy, the UK and even Australia, where their equivalent routes are either crumbling or permanently under laborious repair. Sanral's R100-billion budget seems to represent good value by parastatal standards. And before you scream 'what about the potholes?', those tend to be on municipal roads, which are not within Sanral's remit. On the 870km from Cape Town to Makhanda last week, I did not encounter a single piece of unsafe surface. There is work to be done on the patchwork quilt of bitumen east of Swellendam, and some of the markings are perilously scant, but that's not a bad report card, especially given the pressure that the collapse of the rail freight system has put on the roads. There were three sets of road works under way – which is a good thing. Stop/Goes may irritate, but they demonstrate that maintenance is being done. And on that subject, I spotted five verge clearing crews mowing and trimming diligently. And, while I am in a positive mood, allow me to reflect on a few other N2 things. In 20 hours of easy driving, I did not encounter a single piece of the insane overtaking-on-a-blind-rise kind of driving that used to be routine. Are we becoming safer drivers? The polite yellow line passing dance with flashing lights in thanks is done by pretty much everyone. The route was well policed with a regular presence of flashing blue lights, which generate a Pavlovian response of good behaviour, and a couple of roadblocks. And I saw not a single rust bucket, held-together-by-wire-and-duct-tape taxi. They also used to be commonplace. I appreciate that the Taxi Recapitalisation Programme, begun in 2006, was deeply flawed and has many critics. But the government claims 84,000 old taxis have been scrapped at a cost of R6-billion, and I suspect that the overall outcome is positive, given that almost every taxi I see now is in decent condition. The vibrant health of our agriculture was in abundant and constant evidence all along the N2. The extraordinary orchards of Elgin; shiny new seeding machinery in action near Bot Rivier; the immaculate vineyards of Gabrielskloof; vast oceans of pristine netting covering fruit trees in the Overberg; healthy herds of ostriches, cattle and sheep everywhere; barns, fences and warehouses in good condition. And, where traditional farming has proved burdensome, the owners have reinvented themselves into thriving game farm destinations like Amakhala in the Eastern Cape. Or they farm the wind. The massive sets of metal sails at Caledon and Humansdorp represent huge investments. Thinking of investments, there's new housing in abundance beside the N2 in Mossel Bay and Plett, and even whizzing past much-maligned Gqeberha, some serious evidence of fresh economic activity can be spotted. And who remembers a time, not so long ago, when a journey on the N2 was a culinary desert in which a Wimpy coffee was your best option? Not any more. The route is littered with magnificent offerings: the astonishing Peregrine Farm Stall, Houw Hoek, the Ou Meul at Riviersonderend (which was running full throttle at 7am last Friday), Tredici at Swellendam, Ikigai at Riversdale, the venerable Blue Crane at Heidelberg, 'Thyme and Again' at Keurbooms – just some of the superb roadside outlets, along with countless other splendid padstals, all of which seem to have excellent, friendly staff. Please don't take this for granted. My international guests marvel at these places, saying they have nothing remotely like them on their primary routes for the quality of what they offer. Yes, questions abound and the true picture of the journey is complicated. How much are the farmworkers paid? Will Trump, the ANC and Portnet between them shaft our successful farmers? What is life like in the ever-sprawling townships outside Grabouw and Mossel Bay, and in the backstreets of those country towns? What on earth is going on with the forestry land at Knoflokskraal? That 60kmh speed limit on the downhill to Kaaimans before Wilderness is a straight revenue gouger. The sulking, hulking, mothballed Mossgas refinery near Mossel Bay is a monument to the incompetence and corruption of PetroSA. Makhanda is still a mighty municipal mess. And every river you cross raises an alarm on water quality. All valid and true. Our land is both beautiful and ugly. But can we, just for once, don the rose-tinted glasses and celebrate something that works remarkably well? Please give me a hallelujah for the N2. Thank you, brothers and sisters. Amen. DM
