South Africa's Harmony Gold to resume reduced operations during coronavirus lockdown

South Africa’s mining company Harmony Gold have said it will resume operations up to 50% capacity after the government relaxed regulations on miners during the coronavirus lockdown.

The South African government said last week it would allow mines to operate at up to half capacity after it had previously ordered most underground mines and furnaces to be put on care and maintenance, apart from coal mines supplying state power utility Eskom.

The bullion miner said it expects it to take up to five working days to restart its underground operations.

“We are grateful that we can start up our underground mines and undertake to do so responsibly. Every possible mitigating and preventative process, procedure and control has been adopted to ensure that we start-up in a safe, controlled and accountable manner,” said Peter Steenkamp, CEO, Harmony Gold.

The company said operating free cash flow margin is expected to rise by around 55% for the quarter ended March 31 compared with the previous quarter due to a rise in the gold price.

Total gold production quarter on quarter was expected to be 8% lower, due largely to the impact of the COVID-19 lockdown announced on March 23 and the usual slower start-up after the Christmas break.

Harmony said it had suspended exploration and major capital projects, embarked on cash preservation and rolled forward the majority of its hedge transactions maturing from mid April to the end of May to protect its balance sheet during the pandemic.