Harmony plans disposals as losses decrease

Harmony, the beleaguered South African gold miner, plans to sell the parts of the business that are underperforming.

The company recorded a net loss of $88m in the third-quarter, compared to a loss of $99m in the second-quarter of 2007.

According to acting chief executive Graham Briggs, the new IT system, which was responsible for an accounting crisis and the departure of senior management earlier this year, has been implemented too quickly and without proper staff training.

He estimates that it will take another five to six months for it to run smoothly.

In the meantime, manual checks are being undertaken and Mr Briggs is confident that the company’s accounts are now accurate.

Harmony’s cost reduction programme will continue during the coming six months and production should resume at Elandsrand in mid-November.

The mine has been closed following a lift shaft incident that trapped over 3,000 workers underground.

As a result 48 days of production, or 1,000 kg of gold will be lost, but an insurance claim for losses will be submitted.

Finally, Harmony plans to secure a 50% equity partner for its Papa New Guinea operations in the first half of 2008.

If successful, it will be moving ahead with its projects in the country ahead of schedule.