South Africa’s biggest gold miner is putting serious money behind a second act in copper. Harmony Gold has closed new multi-currency loans worth more than R20 billion, and it is steering the proceeds towards a growing copper business on the other side of the Indian Ocean.
The package is spread across three currencies: US$500 million, A$500 million and R7 billion. Harmony says the deal cuts its funding costs, stretches out when the debt falls due, and strengthens its cash buffer. The money will refinance dollar and rand loans first taken out in 2022, pay off the bridge loan used to buy MAC Copper, and cover general company needs.
Why Australian dollars
The Australian slice is the tell. Harmony has introduced Australian-dollar funding to match its shift into copper Down Under, following its roughly US$1.25 billion acquisition of MAC Copper and the development of the Eva Copper Project, pencilled in at between US$1.55 billion and US$1.75 billion. The idea is to line up the currencies it borrows in with the assets it is building, as a meaningful Australian copper arm grows alongside its South African gold mines. That MAC Copper deal handed Harmony full ownership of the CSA copper mine in Australia, an asset expected to add 17,500 to 18,500 tonnes of copper to the group’s coming annual results. Harmony, long the country’s largest gold producer by volume, has spent years eyeing copper as a way to diversify and cushion itself against a downturn in the gold price.
Lenders lined up
Banks were more than willing. The financing drew roughly 93% lender participation and pledges worth about three times what Harmony was looking for. That oversubscription, the company says, reflects lender confidence and meant commitments had to be scaled back sharply. Citi and Nedbank ran the deal as joint global coordinators and lead arrangers.
There is a green string attached. The facilities are sustainability-linked, tying the interest margin to targets on renewable energy, cutting potable-water use and community-development spending; hit them all and Harmony trims up to five basis points off its margin, miss them and it pays a similar amount more.
With annual results due in under a month, the funding leaves Harmony’s balance sheet freshly set up for a copper push, even as its gold operations keep the cash flowing.
