Harmony shuts shaft to stem cash flow losses

HARMONY Gold would temporarily close its Target 3 shaft because it was bleeding money, the bullion producer said yesterday in a move that could affect up to 1 500 jobs. Harmony said it would take measures to minimise and try to prevent job losses caused by placing the operation on care and maintenance, which meant it would be closed for an indefinite period. “Despite numerous initiatives by both management and organised labour to return Target 3 to profitability, this operation has continued to record cash flow losses,” Harmony said. “Given the current gold price environment, and the significant capital investment required to sustain operations at this shaft, Target 3 is predicted to continue to make a loss in the foreseeable future.” Harmony said last week that it fell to a fourth-quarter loss because of a R1.4 billion write-down on an expansion project at its Phakisa operation, which was shelved because it would have required too much capital. Shares lost 0.06 percent to close at R32.21 yesterday. – Reuters