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Reducing and managing the energy we consume are fundamental business considerations and, at the same time, environmental imperatives. Optimising our energy use will mean our carbon emissions will be optimised too.

Harmony’s operations consume a significant amount of electricity in the production of gold. We account for our product to the point at which it is sent for refining (by Rand Refinery in South Africa and by Perth Refinery in Western Australia for Papua New Guinea). Rand Refinery consumed 31MWh of electricity, of which an estimated 10% can be attributed indirectly to Harmony.

In South Africa, almost all of the energy we consume is indirect energy, in the form of electricity purchased from the national power utility, Eskom. Eskom’ electricity is largely derived from coal-fired power stations, and there is very little scope for the large-scale purchase of energy from renewable sources.

In Papua New Guinea, we aim to maximise our use of alternative energy sources. In 2011, Hidden Valley was connected to a new hydropower transmission line, part of the Papua New Guinea electricty grid, and the operation is now predominantly driven by a hydropower electricity grid. In this reporting year, 70% of Hidden Valley’ power consumption was generated by hydropower, the same as in the previous year.

Energy consumption is a significant portion of our operating costs in South Africa (16.1%) but less so in Papua New Guinea (8.3%).

Direct and indirect energy consumption in FY14
  MWh % of total energy used
South Africa    
Direct (1) - -
Indirect (3) 2 756 029 100
Total 2 756 029 100
Papua New Guinea    
Direct (1) 18 354 30
Indirect (2) 42 060 70
Total 60 414 100
Harmony total    
Direct 18 354 1
Indirect 2 798 089 99
Total 2 816 443 100
  1. (1) Diesel
  2. (2) Renewable energy – hydropower generated electricity
  3. (3) Non-renewable – coalfired power stations (Eskom)
Energy consumption
  FY14 FY13 FY12 FY11 FY10
Intensity consumption (MWh/tonne treated) 0.15 0.14 0.19 0.19 0.22
Absolute consumption (MWh) 2 816 443 2 704 220 3 058 219 3 534 000 3 659 376
Energy consumption (MWh)
  FY14 FY13 FY12 FY11 FY10
South Africa 2 756 029 2 664 111 3 013 150 3 429 000 3 659 376
Papua New Guinea 60 414 51 414 50 312 52 508 -
Total 2 816 443 2 704 220 3 058 219 3 534 000 3 659 376

Energy Management

Harmony is building a strategic and reputational advantage over competitors by optimising energy use, while also managing rising energy costs and reducing emission intensity. Harmony’s revised energy efficiency and climate change policy and strategy articulate our commitment to improving energy efficiency.

Our primary focus has been on making mine cooling, compressed air, water management and ventilation more efficient. In addition, we improved the solar generation capacity within the group.

All of these projects saw a decrease in consumption and an associated decrease in our intensity factors.

By the end of FY14, 13 projects had been implemented and six were ongoing. Once completed, these will result in a total annual energy saving of 101.2MWh. The energy-efficient fans installed underground at Kusasalethu as well as Tshepong’s optimisation of compressed air projects are exceeding expectations in terms of energy savings. Most of the other projects are on target or slightly below target.

While we are still driving efficiencies within the group, our strategy is to move to enhancing our energy with solar, hydropower and bio-energy in the short term.

In FY14, total energy use was 2 816 443MWh (FY13: 2 704 220MWh), up by 4% with corresponding energy intensity levels of 0.15MWh/tonne treated (FY13: 0.14MWh/tonne). Absolute energy consumption in FY14 relative to that in FY13 was higher owing to the four-month suspension of operations at Kusasalethu in FY13 as a result of labour unrest. In all, our energy consumption has declined by 23% in the past five years and our intensity usage by 32%.

Harmony South Africa's electricity consumption increased by 92GWh and emissions by 96 879t CO2e (FY13: 186.6GWh and 184 767t CO2e respectively). The electricty generated from diesel at Papua New Guinea was 18 354MWh (FY13: 20 767MWh).

Harmony’s business strategy has been influenced by the company’ drive to reduce energy consumption and greenhouse gas emissions, as well as by the need to adapt to climate change and diversify its energy mix. Our energy management strategy is thus aligned with that of our business strategy, particularly regarding effective carbon management. Our responsible stewardship of the environment encompasses:

  • Promotion of energy efficiency at our deep-level operations in South Africa
  • Design and development of renewable-energy driven operations in Papua New Guinea
  • Optimisation and rebalancing of our asset portfolio through the decommissioning of operations where the marginal returns of mining payable reserves are outweighed by the rising cost of the energy to mine those reserves
  • Promotion of an alternative energy mix
  • Alignment of our rehabilitation programme with the green energy agenda

Harmony emits a certain quantity of carbon given the fossil fuel (petrol/diesel) consumed in transporting people and material in the course of our business. We have embarked on a drive to optimise our fleet that includes reducing the number of vehicles in the supply chain fleet as well as their average age. This has resulted in less fuel being used by transportation services to all operations, which has in turn led to lower carbon emissions. We monitor our fuel consumption monthly, as part of a standard set of key performance indicator measurements. Reducing the average fleet age also leads to reduced emissions as there is a direct correlation between the fleet age, kilometres travelled and oil consumption, not to mention the maintenance costs involved in running an ageing fleet. In 2006, our average vehicle age was 24 years. The current average age of our fleet is 20 years with the lowest average of 18 years recorded in July 2013.


The company is well-placed to capitalise on climate change opportunities that involve land rehabilitation, biodiversity, energy management, carbon sequestration and solar power.

Climate change risks have influenced both the design of new assets and the operation of current assets (in terms of energy efficiency and alternative energy use). Opportunities presented by climate change have been included in mine closure plans regarding postmining land use. The climate change risks and opportunities affecting Harmony’s business strategy are monitored continuously at an asset level and are communicated to the board throughout the year. The overall strategy is reviewed annually.


We continue to support the South African government’ energy efficiency strategy, announced in 2005, which set a national improvement target of 12% by 2015. After the electricity crisis of 2008 when structural failures in the national grid led to a significant decrease in electricity capacity, Eskom imposed a 10% reduction in energy supply to the mining industry. We have worked closely with Eskom to manage electricity usage as part of our commitment to reduce energry consumption.

Electricity tariffs have risen steadily in South Africa since 2010 and, given electricity’ relatively significant contribution to operating costs, tariff increases exceeding 8% will have an impact on the sustainability of several of our operations. Our work with Eskom to manage electricity usage, includes the use of demand-side management strategies to reduce electricity consumption during peak periods. Demand-side management involves the reduction of energy usage during periods of high demand. This involves, for example, the scheduling of pumping to coincide with cheaper off-peak periods, making more efficient use of Eskom tariffs that reward load-shifting, and improving the efficiency of pumping operations.

  FY14 FY13 FY12 FY11 FY10
Electricity tariffs (c/MWh) 0.0624 0.0587 0.0507 0.0411 0.0326

By the end of FY14, 13 projects had been implemented and six were ongoing. Together these projects, once completed, will result in a total annual energy saving of 101.2MWh. The energy efficient fans installed underground at Kusasalethu and Tshepong optimisation of compressed air projects are exceeding expectations in terms of energy savings. Most of the other projects are on target or slightly below target. Certain ‘old' completed projects that are being reimplemented as part of a maintenance programme, have had limited success given operational challenges such as excessive water consumption. This will be rectified with the implementation of a project to reduce the wastage of water and compressed air being used underground in mines.

A further 15 energy efficiency projects are planned for FY15, and for which approval for Eskom funding is pending. These 15 projects will contribute to annual savings of 82.3MWh and, the six projects being carried over, will be prioritised for completion in FY15.

The energy-saving initiatives planned for FY15 include:

  • Installation of energy efficient LED lighting in mine haulages and of underground ventilation fans
  • Optimisation of ore transport and reduce wastage of compressed air through effective management at all our production shafts
  • Implementation of online energy monitoring, analysis and management of all our electricity consumers (shafts, plants, workshops, etc) to identify potential efficiency improvements and savings
  • At Kusasalethu, bulk air cooler peak-load clipping to minimise power usage during national peak hours
  • At Bambanani, the installation of peak-loading clipping fridge plant which will reduce power usage during national peak hours
  • At the Phakisa and Nyala shafts, the installation of pumps for load shifting so that pumping will take place during off-peak periods when tariffs are cheaper
  • At Masimong, the relocation of the compressor closer to the Masimong 5 shaft will improve its operational efficiency and thus its energy usage too
  • At Masimong, optimising cooling and reducing the use of compressed air for cooling purposes, which is not energy efficient
  • Installation of solar hot-water geysers or heat pumps at all mines. This includes the change houses, hostels and company housing

Harmony remains committed to the challenge of creating an enabling environment as well as to the adequate allocation of resources to achieve our environmental goals and commitments. Dedicated staff have been appointed to manage our energy efficiency programme to which Harmony has allocated R12 million. Most of the demand-side management projects have a 50:50 match funding arrangement.

Those climate change aspects that have had the greatest influence on Harmony’s business strategy are:

Regulatory risks: The major regulatory risk facing Harmony’s South African operations is the proposed carbon tax. We have adjusted our strategy to ensure that this tax forms part of our long-term planning. To take advantage of the tax relief associated with carbon tax offsets, Harmony has completed feasibility studies for bioenergy and solar initiatives.

Energy pricing: Deep-level mining is inherently energy intensive. Given the impact of climate change on energy pricing, Harmony’s strategy is to rebalance its portfolio towards shallower/open-cast mining operations. Harmony’s portfolio in Papua New Guinea includes Hidden Valley, an open-cast mine, and the Golpu project, which is a bulk deposit, and therefore less emissions-intensive. Harmony also closed two shafts at its South African operations in the reporting year (Steyn 2 and the Kimberly-reef section at Doornkop) as the reserves were not meeting rising energy costs.

Physical risks: Significant climate-related physical risks facing Harmony include a change in rainfall patterns and the consequential risk of water supply. Intermittent water supply poses a threat to the operational continuity of Harmony’s mines and thus has the highest impact on the profitability of the business. As such, Harmony’s strategy is to ensure that no mine is affected by water constraints through the implementation of a holistic water management plan.

Harmony’s short-term strategy for next five years is driven by adaptation, conservation and a move toward achieving an alternative energy mix to supply its operations. In terms of conservation, Harmony is reducing its grid-electricity consumption and greenhouse gas emissions through targeted year-on-year and multi-year reductions. The most recent reductions have been achieved by the implementation of a suite of energy efficiency initiatives and the closure of carbon-intensive shafts. Harmony is to increase its use of green energy derived from hydropower, solar power and biomass.

Harmony’s long-term strategy is based on two elements to mitigate the risk of climate change:

  • Rebalancing of our asset portfolio: In the rebalancing of our portfolio, energy intensive operations are being closed and the focus in the long term will be on the development of lower-carbon intensity assets. This will minimise the impact of increased energy costs and our potential exposure to carbon taxes. In FY14, Steyn 2 shaft and the Doornkop Kimberley section were closed. Shafts decommissioned in recent years have been rehabilitated; their shaft cavities have been filled with inert material and capped to prevent, among other things, potential fugitive methane emissions. This process is now underway at Steyn 2. Our operation in Papua New Guinea has significantly lower emission intensities than its South African counterparts and has been designed for energy efficiency with a predominantly renewable energy base
  • Post-mining land use: Several options are being considered for post-mine life land use, such as the creation of carbon sinks (see below) and the conversion of rehabilitated land for the cultivation of non-edible crops for renewable bioenergy production (the land is not suitable for food production). This will reduce the demand for coal-based electricity, thereby mitigating the effects of climate change. Non-edible crops will be planted on Harmony-owned land for the production of energy such as biogas and biochar. (Biochar is charcoal made from the conversion of biomass, using heat by means of pyrolosysis, into carbon in the form of a final product that is used in agriculture to improve land quality)


The National Energy Regulator of South Africa (Nersa) approved a renewable energy feed-in tariff (REFIT) guideline in 2009. These guidelines have stimulated the development of renewable energy projects as they become a more feasible investment option.


Harmony is currently assessing various energy-generating initiatives for the land it owns in South Africa. The generation of additional power will help to alleviate current supply concerns and the cost of energy.


Harmony is also implementing a bio-energy project involving the propagation of biocrops on mine-impacted land in the Free State to generate natural gas as a substitute for fossil fuels in the company’ Harmony 1 Gold Plant elution and carbon regeneration circuits. Phase 1 of the project aims to deliver 71 000GJ of energy within 18 months with production being ramped up to generate 187GJ within 36 months. This project aims to turn mine-impacted land to account by creating a value-adding use for it and, in so doing, to promote skills development and job creation for communities and ensure a sustainable legacy in the Free State.

Following a feasibility study for the development of biomass capability in the Free State, implementation began in September 2014. The aim of the project is to use mine impacted land as part of the provincial rehabilitation initiative for to create economic opportunities for local communities. As part of this process, we will convert electrical and polyfuel heating of elution water at our gold plants to biogas heating.

Bioenergy will be produced in the Free State from Giant King Grass, Sweet Sorghum or Sugar Beet to supplement fossil energy.

Solar power

Harmony is building expertise in renewable energy and participating in a group that is to develop an 18MW solar park at Kalgold in terms of the government’ renewable energy power programme. The solar energy to be generated will be fed into the Eskom electricity grid. The proposal for this project is to be submitted in the next round of public bidding.

Another two solar parks involving photovoltaic plants (2 X 10MW) are planned for the Free State and are currently in the environmental impact assessment stage. A third initiative, a 40MW plant at the African Rainbow Minerals 1 shaft, is also being investigated. All three projects will be implemented on Harmony-owned land.

Carbon sink

In FY14, Harmony undertook a prefeasibility study on establishing a reforestation plantation of a biocrop on rehabilitated land, in Virginia, in the Free State. The aim is to utilise the biocrop to generate biochar for community consumption and to conduct trials to ascertain whether this crop could be planted and used on tailings dams for dust suppression and final rehabilitation as a carbon sink. With recent advances in the cultivation of Giant King Grass on affected land, and the ability of this grass to sequester carbon where it remains in the biomass of the grass, the project has developed into an opportunity for a carbon sink. Given the success of this project, it will be implemented as part of the rehabilitation strategy for Harmony’s tailings dams.

Power generating turbines

At Kusasalethu, a project involving the recommissioning of four underground power generating turbines has begun. By year-end, three 3.1MW turbines had been commissioned at a cost of R21 million (US$ 2 million). These turbines will be used to generate power from mine water being transported underground from surface. The fourth turbine, which is brand new, has been installed and will be commissioned in FY15.

These four turbines are expected to generate 17 520MWh annually. This energy will be fed directly into the mine grid and hence reduce our Eskom consumption. The annual cost saving is estimated at R11.3 million (US$ 1.1 million).

Solar geysers

Harmony aims to replace electrical geysers with solar ones at Harmony-owned villages. This is for 1 254 Harmony-owned low-cost houses. The project, which has been approved by Harmony, is part of Eskom’ domestic solar geyser rollout and Eskom still needs to finalise the supplier of the solar geysers to include more local content in the product.

Collectively, these projects could reduce CO2 emissions by 635 000t by FY15, but many of them require supplementary funding to be executed timeously. Accordingly, Harmony and Nedbank are to register three projects (the bioenergy and carbon sink projects) under the Clean Development Mechanism for carbon trading. This mechanism allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement an emission-reduction project in developing countries. The purpose of carbon trading is to maximise the financial gain from energy-saving initiatives while building our reputation as a responsible corporate citizen and environmental steward. Private sector experts are working closely with National Treasury in South Africa to develop a carbon offsets/trading scheme. Harmony is monitoring the debate on the subject so as to identify opportunities for trading. No carbon projects have been registered as yet.

Harmony is implementing six energy efficiency projects that will lead to a reduction in annual greenhouse gas emissions of 66,489t CO2e. We have also begun engagements with our major suppliers to reduce climate change risks across the value chain. New, group-level absolute and intensity-based greenhouse gas emission reduction targets have been set for the five years to FY18 (see our environmental objectives for 2015).

Our aim is to maximise the use of alternative energy sources. While opportunities in South Africa are currently limited, government-led intiatives have increased the scope for alternative energy generation in the future, and Harmony wishes to be at the forefront of this process. (See discussion alongside)

The situation in Papua New Guinea is a little different where a greenhouse gas management strategy has been developed for Harmony’s Papua New Guinea operations. Here, greenhouse gas emissions are direct (scope 1) emissions only since the main source of power is hydropower (scope 2) which generates no greenhouse gas emissions.

Our aim is to reduce our reliance on diesel-generated power at Hidden Valley and the amount of fuel that needs to be trucked to this remote site. Management has set a target that hydropower should make up 75 – 80% of energy used at Hidden Valley by FY15. The Hidden Valley plant, which accounts for the vast majority (about 85%) of the power consumed at this operation, is equipped with the latest technology to ensure optimal use of energy.

The Wafi-Golpu project will be designed to meet environmental best practice. Environmental design criteria incorporate both Papua New Guinea statutory requirements and, where applicable, Australia, World Health and International Finance Corporation (World Bank) standards or guidelines. Prefeasibility infrastructure designs have been scoped with energy efficiency and water conservation in mind. The use of natural gas for power generation is also being considered as part of the prefeasibility study, which is scheduled for completion by the end of the first half of FY15.

Important note

For printing purposes only, Harmony’s annual financial statements are presented in a seperate document, the Financial Report 2014. This document is also available in the download manager.