* Harmony plans to seek acquisition opportunities
* S.African mining groups want to diversify out of home base
(Recasts, adds details)
By Ed Stoddard
JOHANNESBURG, Aug 14 South African bullion
producer Harmony Gold said on Thursday it was looking
for acquisition opportunities elsewhere in Africa and in Papua
New Guinea, even as it scales back investment on existing
"There are quite a few assets that are on the block,"
Harmony chief executive Graham Briggs told a conference call
after the release of the group's fourth quarter and year
He said Harmony would not be looking into new regions such
as South America but would focus its attention in Africa and
also Papua New Guinea, where it currently has operations.
Harmony's operations in South Africa, which account for over
90 percent of its production, are mostly older and deep-level
mines and it is becoming increasingly expensive to extract ore
at such depths.
Mining companies in South Africa are also trying to
diversify out of their domestic base because of labour unrest,
uncertainty over policy, and rising costs associated with
While Harmony has signaled its very clear intention to hunt
new assets, it is also scaling back capital expenditure on
existing projects, an industry-wide trend in the face of
Harmony fell to a steep fourth-quarter loss because of a 1.4
billion rand ($132 million) write-down on an expansion project
at its Phakisa operation, which was shelved because it would
have required too much capital.
"The net loss for the June 2014 quarter was 1.22 billion
rand, compared to a net profit of 31 million rand in the March
2014 quarter, mainly due to the impairment of 1.41 billion rand
recorded," the company said.
Its loss for the year narrowed to 293 cents per share from
543 cents, in part because of cost reductions but also because
it recorded even bigger write-downs last year.
Harmony also reiterated it planned "significantly lower"
investment in its Papua New Guinea Wafi-Golpu mine, which has
become its flag-ship project.
Plans unveiled in 2012 called for spending of almost $6
billion to develop the mine which would have been shared with
Harmony's joint-venture partner Newcrest Mining.
Harmony had been expected to update investors this month
about its current expenditure plans for the project but Briggs
said on Thursday it would likely finalise its new capital
blueprint in September .
(1 US dollar = 10.5869 South African rand)
(Editing by William Hardy)