Our Strategy

We revisit our strategy throughout the year to ensure that it remains relevant and appropriate, while being responsive and adaptive to both internal and external changes.

Our aim is to be safe, highly profitable and generate the cash necessary to underpin the development of Golpu, be a sought-after investment, be robust at any gold or copper price, have a diverse risk portfolio (with exposure to South Africa, Papua New Guinea, gold and copper) and to continue growing our quality ounces. Our strategy for 2015 to 2020 is to improve our margins through safely delivering on our plans and increase free cash flow through higher grades and cost control, retain a flexible balance sheet grow our value per share of our Papua New Guinea assets and complete the Golpu studies as it is our intention to build the Golpu mine. We also intend identifying acquisition opportunities of open pit mines and bulk projects.

Our strategy forms the basis of all our actions at Harmony. One of the ways in which we achieve our strategy is through having the right people in the right jobs, who understand our objectives and strive to achieve our strategy. We do this by highlighting our strategy in all training and communication between management and employees. For example, when general managers and the chief executive officer present to employees, they will relate the topic back to our Harmony strategy. This means our strategy underpins our actions, allowing everyday decisions to move the company towards our goals.

UNPACKING OUR STRATEGY

1. 1. IMPROVING OUR MARGINS

   Safely delivering on plans

   • A continuous improvement in safety and health is a primary overriding imperative, and crucial to our ability to care for our people and optimise our operations. More details under the safety and health section

   Increase free cash flow through higher grades and cost control

   • Harmony’s underground grade has improved for a two consecutive years. We have invested in higher grade ore bodies, improved grade control and closed lower grade mines. To avert the consequences of the lower gold price we further improved on our cost control by reducing corporate and overhead costs and managing our capital expenditure. We expect to see a further increase in gold production and grades and this will reduce our unit costs going forward

   Retain flexible balance sheet

   • We are highly geared to the gold price and therefore we retain low debt levels to reduce our exposure to liquidity and interest charges. Please refer to the balance sheet included in our financial statements

2. 2. GROWING THE VALUE OF OUR Papua New Guinea ASSETS TO REFLECT IN OUR SHARE PRICE

   Complete Golpu studies

   • We plan to release our Golpu pre-feasibility study by the end of 2014, and the Golpu feasibility study by the end of 2015

   Build a mine at Golpu

   • We plan to build the Golpu mine following the completion of a successful feasibility study

3. 3. IDENTIFYING ACQUISITION OPPORTUNITIES

   Assess and evaluate open pit mines or bulk mining projects

   • We are exploring greenfield and brownfield gold and gold copper opportunities and available assets which we can mine more efficiently
   • We will not acquire assets at the expense of building Golpu