description of the principal objectives set out in the MPRDA.
On 11 July 2024, during the Department of Mineral and Petroleum Resources ("DMPR'') 2024/25 Budget announcement
following South Africa's general elections, the Minister announced that the DMPR would split into two separate ministries: the
Department of Mineral and Petroleum Resources and the Department of Electricity and Energy, which split has been
subsequently implemented. In addition, the Minister indicated that the DMPR was in the process of drafting amendments to the
MPRDA to address certain perceived deficiencies and to bring the legislation in line with international best practice.
The South African Government published the Mineral Resources Development Bill of 2025 and subsequent correction (the
“MPRD Bill”) for public comment on 20 May 2025 and 9 June 2024, respectively. It invited interested and affected parties to
submit their comments on the Bill on or before 13 August 2025.
Among other things, the MPRD Bill, if promulgated, would achieve the following:
• Black Economic Empowerment
The MPRD Bill proposes regulate Black Economic Empowerment in terms of Regulations to be published pursuant to the
MPRD Bill. It is unclear what requirements will be contained in these Regulations and the extent to which they will be based on
or replace Mining Charter III.
• Ownership of tailings created before 1 May 2004
Historic tailings are not regulated in terms of the MPRDA; however, the MPRD Bill purports to amend the MPRDA so as to
render historic tailings subject to regulation under the MPRDA, resulting in the South African government gaining custodianship
of historic tailings. The current owners of these historic tailings will be afforded an opportunity to apply for amendments to
existing rights or new rights over the historic tailings within two years of Bill being introduced as law.
• Transfers of interests in companies
The MPRD Bill proposes amendments which are unclear but could suggest that a transfer of any interest in an unlisted
company, where such company holds a prospecting right or mining right, requires the prior consent of the Minister.
• Mineral beneficiation
The MPRD Bill seeks to make it mandatory for the Minister to “initiate or promote the beneficiation of minerals and
petroleum resources in the Republic of South Africa”. The MPRDA Bill affords the broad discretion over beneficiation, without
providing any criteria under which such discretion should be exercised.
• Strategic Minerals
The Minister may, in consultation with other relevant Ministers, declare certain minerals or a class of minerals as being
"strategic" to advancing Government imperatives and accordingly restrict their prospecting or mining. The MPRD Bill does not
elaborate on what minerals could be declared strategic.
• Penalties
The MPRD Bill proposes to introduce fines of up to 10% of the offender's annual turnover in the Republic and exports from
the Republic during the preceding financial year, for contraventions of the MPRDA.
• Issue of a closure certificate
The MPRD Bill envisages that a rights holder will remain liable for any latent or residual environmental and associated
damage caused by prospecting and mining operations, even after (and notwithstanding) the issue of a closure certificate by the
Minister. This means that a rights holder will no longer be indemnified from liability after the issue of a closure certificate.
The definition of “This Act” will be amended to elevate status of the the Codes of Good Practice for the South African
Minerals Industry (“Codes of Good Practice”) and the Housing and Living Conditions Standards for the Minerals Industry (“Living
Standards”), from policy documents to law.
There is a large degree of uncertainty regarding the changes that will be brought about in the event that the MPRD Bill is
made law in its current form.
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Regulations under the MPRDA
On 27 March 2020 the Minister published for implementation amendments to the regulations promulgated pursuant to the
MPRDA in 2004 (the “MPRDA Regulations” and as amended the “Amended Regulations”). The Amended Regulations include
the following notable changes:
•Mining right applicants must “meaningfully consult” with landowners, lawful occupiers and interested and affected parties in
accordance with the procedures contemplated under the Environmental Impact Assessment Regulations, 2014 (the “EIA
Regulations”). The office of the Regional Manager is permitted to participate as an observer in these processes.
•Mining right holders must, pursuant to their social and labour plans (“SLPs”), contribute to the socio-economic
development in the areas in which they operate and labour sending areas (i.e. a local municipality which a majority of mine
workers consider to be their primary residence). This requirement may impose obligations on mining right holder to effect
measures in communities that are located far away from the mine and/or could give rise to some social issues.
•Although most of the provisions regulating environmental matters have been deleted from the Amended Regulations, those
sections dealing with mine closure have been retained but have been amended to state that mine closure must be
regulated pursuant to the National Environmental Management Act, 107 of 1998 (“NEMA”), the EIA Regulations and the
Financial Provision Regulations, 2015. As discussed in Item 4: “Information on the Company – Business Overview –
Regulation - Laws and Regulations Pertaining to Environmental Protection – South Africa” it is anticipated that the
Financial Provision Regulations, 2015 will be replaced by revised regulations following further engagement with the mining
industry.
•The appeal process in the MPRDA Regulations has been replaced with a more comprehensive procedure that includes
specific time periods within which appellants, respondents and the competent authority must submit appeals, responses or
consider appeals (as the case may be). Although there is no guarantee that the parties will comply with these time periods,
the time periods are intended to hold the parties accountable and to ensure that appeals are resolved in a timely manner.
The Mining Charter
On 27 September 2018, the Minister published the Broad-Based Socio-Economic Empowerment Charter for the Mining
and Minerals Industry, 2018 (“Mining Charter III”), on which date it also became effective, as amended by the notice published
in the Government Gazette on 19 December 2018 and read with the Implementation Guidelines for the Broad Based Socio-
Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (“Implementation Guidelines”) published on the
same date. It replaces, in their entirety, the original Mining Charter negotiated in 2002 and gazetted in 2004 (the "Original
Charter") and the amended Charter gazetted in September 2010 (the “Amended Charter”).
Mining Charter III imposes obligations and increased participation by historically disadvantaged persons ("HDPs") in
relation to a mining company’s ownership, procurement of goods and services, enterprise and supplier development, human
resource development and employment equity requirements.
While the ownership requirement for HDPs in relation to existing mining rights has not increased (provided that we met the
26.0% requirement under the Amended Charter), we may be required to comply with new HDP ownership requirements in
relation to any renewals, consolidations and transfers of our existing rights and any applications for new mining rights. The
increased HDP requirements in relation to employment equity, procurement of goods and services and enterprise and supplier
development may result in additional costs being incurred by us, which could have a material adverse effect on our results of
operations and financial condition.
While Mining Charter III was effective from 27 September 2018, many of its provisions are vague and untested despite the
publication of the Implementation Guidelines. See Item 4: “Information on the Company - Business Overview - Regulation -
Mineral Rights - South Africa - Mining Charter”.
On 26 March 2019, the Minerals Council South Africa (“MCSA”) filed an application for the judicial review and setting aside
of certain clauses of Mining Charter III. The MCSA had engaged in ongoing attempts to reach a compromise with the Minister on
certain provisions that are problematic for the industry, and which would be detrimental to its sustainability.
The MCSA’s judicial review application was heard before a full bench of judges in May 2021. Judgment was handed down
on 21 September 2021 (the "2021 Judgement") setting aside certain of the problematic provisions, while providing that the
remainder of Mining Charter III should continue in force. In November 2021, the DMPR informed the National Assembly's
Portfolio Committee on Mineral Resources and Energy that it did not intend to appeal the outcome of the 2021 Judgement, but
instead would consider steps to achieve the empowerment objectives through legislative amendments to the MPRDA.
We cannot guarantee that we will meet all the targets set out by Mining Charter III. Should we breach any obligations in
complying with the MPRDA or Mining Charter III, our existing mining rights in South Africa could be suspended or cancelled by
the Minister in accordance with the provisions of the MPRDA. It may also influence our ability to obtain any new mining rights.
Any such suspension or cancellation could have a material adverse effect on our results of operations and financial condition.
Australia
In Australia, mining is regulated by the laws of the State in which the deposit is situated. Presently, our only mining activity
in Australia is the Eva Copper Project, located in the State of Queensland. Mining in Queensland is regulated by the Mineral
Resources Act 1989 (Qld) (the "Queensland MRA"), the Mineral and Energy Resources (Common Provisions) Act 2014 as
amended by the Mineral and Energy Resources and Other Legislation Amendment Act 2024 (Qld), the MQSH Act, and the
regulations, practice manual, operational policies and guidelines thereunder. See Item 4: “Information on the Company -
Business Overview - Regulation - Mineral Rights - Australia”.
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Generally, all mineral resources in Queensland are owned by the State of Queensland. These resources are managed by
the Queensland Department of Resources. Under the Queensland MRA, the Department of Resources requires all large mining
projects to apply for an applicable resource authority, being (as the case may be) an exploration permit ("EP"), a mining lease
("ML") or a mineral development license.
An EP allows the holder to carry out exploration activities to determine what minerals exist and their quality and quantity in
or under land or in the waters or sea above such land, in accordance with agreed work programs and subject to compliance with
prescribed security and financial obligations. If the holder of an EP wishes to develop a mine to exploit discovered resources,
application must be made for an ML. This entitles the holder to machine-mine specified minerals and carry out activities
associated with mining, including infrastructure to support mining operations.
The Queensland MRA, and resource authorities issued thereunder, contain provisions and conditions, the breach of which
may result in the imposition of a fine, imprisonment or the cancellation of the tenement.
Should we breach any obligations in complying with the Queensland MRA or any other laws and regulations relating to our
exploration and mining activities in Queensland, our resource authorities in Queensland could be suspended or cancelled, or we
could be subject to fines or other sanctions. Any such suspension, cancellation, fine or sanction could have a material adverse
effect on our operational and financial results.
Papua New Guinea
In PNG, mining is primarily regulated by the PNG Mining Act 1992 (the “PNG Mining Act”) and the PNG Mining (Safety)
Act and their respective Regulations. All minerals are owned by the PNG Government, which grants rights to explore for or mine
such minerals under a concessionary tenement system. See Item 4: "Information on the Company – Business Overview –
Regulation - Mineral Rights - Papua New Guinea"
Since 2009, the mining regime in PNG has been the subject of a comprehensive ongoing review involving various PNG
Government agencies and various draft revisions of the PNG mining legislation have been circulated for comment. In addition to
the review of applicable legislation, PNG mineral policy and mining-specific sector policies are also being reviewed and drafted,
including a biodiversity offsets policy, a national oceans policy, a sustainable development policy, an involuntary relocation
policy, a national content policy, and a mine closure policy and mining project rehabilitation and closure guideline.See Item 4:
"Information on the Company – Business Overview – Regulation - Mineral Rights - Papua New Guinea".
Certain of the proposed revisions, such as increased royalties and equity participation by the PNG Government or the
introduction of a production-sharing regime, if adopted and applied to our operations and projects in PNG could have a material
adverse effect on our business, operating results and financial condition.
PNG mining legislation and mining tenements contain provisions and conditions, the breach of which may result in the
imposition of a fine, imprisonment or the cancellation of the tenement. Should we breach any obligations in complying with the
PNG Mining Act or any other laws and regulations relating to our exploration and mining activities in PNG, our existing mining
rights in PNG could be suspended or cancelled, or we could be subject to fines or other sanction. Any such suspension,
cancellation or sanction could have a material adverse effect on our results of operations and financial condition.
Our financial flexibility could be constrained by the Exchange Control Regulations of the countries in which we operate
South Africa’s Exchange Control Regulations restrict the export of capital from South Africa. Transactions between South
African residents (including companies) and non-residents (excluding residents of the Republic of Namibia and the Kingdoms of
Lesotho and Eswatini, known collectively as the Common Monetary Area (“CMA”)) are subject to exchange controls enforced
by South African Reserve Bank ("SARB"). South African companies remain subject to restrictions on their ability to deploy
capital outside of South Africa. These restrictions could hinder our financial and strategic flexibility, particularly our ability to raise
funds outside South Africa, deploy capital for international acquisitions or projects, and repatriate earnings, and could therefore
have a material adverse effect on our business, operating results and financial condition.
Our operations in PNG (including the export of gold and the operation of approved offshore foreign currency accounts) are
subject to the foreign exchange control and other directives of the Bank of Papua New Guinea. PNG is presently subject to
severe shortages of foreign currency. The withdrawal of existing approvals or the imposition of restrictions could potentially
hinder our financial and strategic flexibility, limit our ability to make offshore payments, and could have a material adverse effect
on our business, operating results and financial condition.
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Risks Related to Our Operations and Business
Risks associated with pumping water inflows from closed mines adjacent to our operations, including related closure
liabilities, could adversely affect our operational results
Certain of our mining operations in South Africa are adjacent to the mining operations of other companies. A mine closure
can affect continued operations at an adjacent mine if appropriate preventative steps are not taken. In particular, this could
include the ingress of underground water when pumping operations at the closed mine are suspended. This can result in
damage to property, operational disruptions and additional pumping costs, which could adversely affect any one of our adjacent
mining operations and, in turn could adversely affect our business, operating results and financial condition.
In connection with our acquisition in 2018 of the Moab Khotsong and Great Noligwa mines from AngloGold Ashanti Limited
("AngloGold"), together with other assets and related infrastructure (the “Moab Acquisition”), we acquired a two-thirds interest
in the Margaret Water Company NPC ("Margaret Water") for all pumping and water-related infrastructure at its Margaret shaft.
The shaft operates for the purpose of de-watering the Klerksdorp, Orkney, Stilfontein, Hartbeesfontein (“KOSH”) basin
groundwater. This is to allow Moab Khotsong operations and the mine operated by Kopanang Gold Mining Company Proprietary
Limited (the mining company holding the remaining one–third interest in Margaret Water and the only other mining company
continuing to operate in the area) to remain dry and to prevent flooding of operational areas. Therefore, it remains imperative for
the shaft to continue pumping water.
Flooding and potential decant in the future resulting from a failure in pumping and water-related infrastructure could pose
an unpredicted “force majeure” type event, which could result in financial liability for us, and could have an adverse impact on
our results of operations and financial condition. Although studies indicate that we do not currently have a decant risk at our
Doornkop and Kusasalethu operations, due to the interconnectivity, any long-term water management solution would require a
regional strategy co-created with neighbouring and inter-connected mines. Although we have installed water treatment plants at
both sites for current treatment needs, which could serve as water plants for final decant should the situation arise, there can be
no assurance that such plants will be sufficient to address such risks. There is also a flooding risk at the Mponeng mine,
requiring the continuous pumping arrangement with Covalent Water Company (Pty) Limited (a wholly-owned subsidiary) to stay
in place.
Obligations in respect of the pumping and treatment of extraneous water must also be addressed in connection with our
final closure plans for each of our operations. We are responsible for these liabilities until a closure certificate is issued pursuant
to the MPRDA and possibly thereafter under the NEMA. The occurrence of any of the risks discussed above could have an
adverse effect on our operating results and financial condition. This liability is discussed in more details in Item 4: “Information
on the Company – Business Overview – Regulation – Law and Regulations Pertaining to Environmental Protection – South
Africa – NEMA”. See also “– We are subject to extensive environmental regulations in the countries in which we operate, and
compliance costs, regulatory changes, and potential non-compliance could have a material adverse effect on our business,
operating results and financial condition” below.
Infrastructure constraints and ageing infrastructure could adversely affect our operations
Mining, processing, development and exploration activities depend on adequate infrastructure. Reliable rail, ports, roads,
bridges, power sources, power transmission facilities and water supply are critical to the Company’s business operations and
affect capital and operating costs. The infrastructure and services are often provided by third parties whose operational activities
are outside the control of the Company.
Interference to the maintenance or provision of infrastructure, including by extreme weather conditions, scarcity of
equipment, sabotage or social unrest, could impede our ability to deliver products on time and adversely affect our business
results of operations and financial condition.
Once a shaft or a processing plant has reached the end of its intended lifespan, higher than normal maintenance and care
is required. This applies also to terrestrial tailings and waste storage facilities. Maintaining this infrastructure requires skilled
human resources, capital allocation, management and planning. Although we have implemented a comprehensive maintenance
strategy, incidents resulting in production delays, increased costs or industrial accidents may occur. Such incidents may have an
adverse effect on our operating results and financial condition.
Disruptions to electricity supply and rising power costs: Impact on operations and financial results
South Africa
South Africa's mining sector, including our operations, is heavily dependent on electricity supplied by Eskom Holdings SOC
Limited ("Eskom"), the state-owned utility that primarily relies on fossil fuels. Over the past decade, Eskom has faced significant
challenges. Harmony’s operations in South Africa remain exposed to risks associated with electricity supply instability and
escalating power costs. Systemic risks persist due to Eskom’s ageing infrastructure, financial constraints, and limited capacity
for sustained maintenance and upgrades - posing ongoing threats to electricity reliability.
Unstable power supply can damage equipment, disrupt production, and reduce recovery rates. Rising electricity costs
continue to erode free cash flow margins, potentially impacting mine life, project viability, and overall financial performance.
Given these factors, the risk of power supply disruptions remains a concern for Harmony’s South African operations and
may have an adverse effect on our operational results.
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Papua New Guinea
In PNG, our Hidden Valley mine relies on power from the state utility, PNG Power Limited ("PNG Power"). The amount of
power imported from PNG Power has had a marginal increase over the last three years, with about 67% of the mine's daily
power demand met by PNG Power, and the remaining 33% self-generated using the mine’s diesel power station.
Risks associated with self-generation include exposure to diesel price increases, danger to road users and pedestrians in
the transport of fuel to the site, and potentially higher associated greenhouse gas emissions.
See Item 5: “Operating and Financial Review and Prospects – Operating Results – Key factors affecting our results -
Electricity in South Africa.” and “Integrated Annual Report for the 20-F 2025 – Environment stewardship – Climate and energy
management” on pages 98 to 104.
Illegal mining and other criminal activity at our operations, including theft of gold and gold-bearing material, could
pose a threat to the safety of employees, result in damage to property and could expose us to losses, business
disruption and liability
The activities of illegal and artisanal miners, which include theft, has increased over the years and had become more
violent and threatens both the safety of employees and sustainability of the mining industry.
South Africa
In South Africa, artisanal and illegal miners are active on, or adjacent to, several of our properties, but were mostly active
on the surface during fiscal 2025. Artisanal and illegal miners at times may lead to interference with our operations and results in
conflict that presents a security threat to property and human life. The environmental, social, safety and health impacts of
artisanal mining are frequently attributed to formal mining activity, and it is often assumed that artisanal-mined gold is channelled
through large-scale mining operators, even though artisanal and large-scale miners have distinct supply chains. These
misconceptions impact negatively on the reputation of the industry.
The activities of the illegal miners, which include theft, can cause damage to our properties, including by way of pollution,
copper cable theft, underground fires, critical infrastructure damage, operational disruption, project delays or personal injury or
death, for which we could potentially be held responsible. Illegal and artisanal mining could contribute to the depletion of mineral
deposits, potentially making the future mining of such deposits uneconomic. Most illegal miners are found at abandoned shafts
or old work places.
Illegal and artisanal mining (which may be by employees or third parties) is associated with a number of negative impacts,
including environmental degradation and human rights abuse, such as forced labour, human trafficking, child labour, corruption,
money laundering and other violent crimes in the communities and at the mines. Effective local government administration is
often lacking in the locations where illegal and artisanal miners operate, due to rapid population growth and the lack of
functioning structures, which can create a complex, unstable social environment. The disbandment of specialised South African
Police Service ("SAPS") units has also left a huge gap in the apprehension of high-ranking criminals in the illicit gold trade.
Without the assistance of these services, combating illegal and artisanal mining is extremely difficult and poses significant risks
to Harmony including reputational risks, litigation, production losses resulting from stoppages and areas becoming unsafe as the
miners encroach on active mining sites as well as increased costs to mitigate these risks.
Papua New Guinea
Illegal and artisanal mining poses challenges to various mines in PNG.The presence of illegal miners could lead to project
delays and disputes regarding the development or operation of commercial gold deposits. In addition, illegal mining could lead to
an increase in the level of organisation and funding of criminal activity around some of our operations. Criminal activities such as
trespassing, illegal and artisanal mining, and related sabotage, theft and vandalism could lead to damage to, and disruptions at,
our operations.
Rising gold and copper prices may result in an increase in gold and copper thefts; moreover, incidences of illegal mining
may escalate as a result of social and economic conditions. The occurrence of any of these events could have a material
adverse effect on our financial condition on results of our operations.
Actual and potential shortages of production inputs and supply chain disruptions may affect our operational results
Our operational results may be affected by the availability and pricing of consumables such as fuel, chemical reagents,
explosives, tires, steel and other essential production inputs. Issues with regards to availability of consumables may result from
shortages, long lead times to deliver and supply chain disruptions, which could result in production delays and production
shortfalls. We expect cost increases and longer lead time to continue in fiscal 2026 across our operations, including as a result
of factors such as the price of oil, inflationary increases and labour costs. See “— Rising inflation, and geopolitical risks may
have a material adverse effect on our business, operating results and financial condition”.
Shortages can be attributed to geopolitical uncertainty, including the potential impact of global trade policy shifts. In South
Africa, the consequences of intermittent power outages and unplanned breakdowns have resulted in rising input costs and
longer lead times. The steel and chemical industry has experienced periodic labour actions related to wage negotiations,
affecting major local steelmakers and retailers, and creating supply constraints. These shortages has had an affect on numerous
engineering companies within our extensive supply chain network, regardless of their size.
Despite the Red Sea maritime disruptions that impacted our supply chain during fiscal 2024 having largely stabilised by
mid-year, the freight rates remain elevated compared to pre-disruption levels. Current geopolitical tensions in the Middle East
continue to pose risks of renewed disruptions. The port congestion at South African facilities, particularly Durban, has affected
the clearance time of imported items and continues to create supply chain bottlenecks.
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The pricing of consumables could continue to be impacted by these challenges, particularly if shortages become more
prevalent. Factors such as global supply and demand dynamics, governmental regulations including import parities on steel and
chemical-related products, and industrial actions, may contribute to price fluctuations. A sustained interruption in the supply of
these consumables would necessitate swift identification of alternative suppliers, potentially resulting in higher costs. Moreover,
such interruptions could adversely affect our ability to pursue our development projects. Any significant increase in the prices of
these consumables would escalate operating costs and have adverse effects on profitability. Consequently, this could impact our
financial and operating results.
Fluctuations in insurance cost and availability could adversely affect our operating results and our insurance coverage
may prove inadequate to satisfy future claims
Fluctuations in insurance costs and availability can significantly impact our operating results, and our current insurance
coverage may not fully address future claims. We maintain global insurance policies that cover general liability, directors' and
officers' liability, cyber-security, accidental loss, and material damage to our property, including resultant business interruptions.
However, the costs of sustaining adequate insurance coverage continue to rise and may persist in doing so, potentially
adversely affecting our financial performance.
We also have comprehensive third-party liability coverage, which includes unforeseen sudden and accidental
environmental liabilities. Despite this, we may still face liability for pollution or other hazards that are not insured or insurable,
including those related to past mining activities. Our property and liability insurance is aligned with industry practices but, like all
insurance policies, contains exclusions and limitations.
Additionally, there is no guarantee that insurance will always be available at economically feasible premiums.
Consequently, our insurance coverage might not protect against certain claims related to environmental or industrial accidents,
pollution, public health emergencies, data protection and cybersecurity breaches, and other events that could disrupt our
operations, such as the National Grid Collapse. These factors could materially and adversely affect our financial and operating
results.
We compete with mining and other companies for key human resources with critical skills and our inability to retain
key personnel could have an adverse effect on our business
The risk of losing senior management or being unable to hire and retain sufficient technically skilled employees or sufficient
representation by HDPs in management positions, or sufficient gender diversity in management positions or at Board level, may
materially impact on our ability to achieve our objectives. We compete with mining and other companies globally to attract and
retain key human resources at all levels with the appropriate technical skills and operating and managerial experience
necessary to continue operating our business. The global shortage of key mining specialists, including geologists, mining
engineers, mechanical and electrical engineers, metallurgists and skilled artisans has been exacerbated by increased mining
activity across the globe. Furthermore, the often remote locations of mining operations may make the mining industry
unattractive to potential employees.
In addition to this, the regions we operate in also have specific requirements which could affect our recruitment and
retention processes. In South Africa, the need to recruit, develop and retain skilled employees is particularly critical with HDPs
and women in mining in South Africa. In August 2024, the PNG Department of Commerce and Industry launched "The Papua
New Guinea National Content Policy for Resource Sectors 2023". Although it is presently uncertain the extent to which, and
how, the policy will be applied to our current operations and projects in PNG, if the localisation of the workforce policy provisions
are introduced, we believe that they would severely restrict the utilisation of offshore-based “fly-in, fly-out” expatriate employees,
and potentially also result in a tightening of legislation around the granting of work permits and visas to foreign skilled
employees. This would, in turn, adversely affect our ability in PNG to engage and retain appropriately skilled human resources,
and could necessitate the application of additional resources to the construction or provision of housing for residential
employees and the recruiting and training of local landholders and landholder businesses, all of which may have an adverse
effect on our business, operating results and financial condition.
There can be no assurance that we will attract and retain skilled and experienced employees. Should we lose any of our
key personnel, our business may be harmed and our operational results and financial condition could be adversely affected. See
Item 4: “Information on the Company – Business Overview – Regulation – Labour Relations” and “Integrated Annual Report for
the 20-F 2025 – Social stewardship – An engaged workforce” on pages 154 to 165.
The use of contractors at certain operations may expose us to delays or suspensions in mining activities and
increases in mining costs
We use contractors at certain of our operations to mine and deliver ore to processing plants as well as for other purposes.
At mines employing mining contractors, contracting costs represent a significant proportion of the total operating costs of these
operations and we do not own all of the mining equipment.
Our operations could be disrupted, resulting in additional costs and liabilities, if the mining contractors at affected mines have
financial difficulties, if a dispute arises in renegotiating a contract, or if there is a delay in replacing an existing contractor and its
operating equipment to meet business needs at expected cost levels. Increases in contract mining rates, in the absence of
associated productivity increases, will also have an adverse impact on our results of operations and financial condition.
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Contractors can adversely affect our reputation, results of operations and financial condition by:
•our reduced control over those aspects of operations which are the responsibility of contractors;
•their failure to comply with applicable legal, human rights and regulatory requirements; and
•their inability to manage their workforce to provide high quality services and a high level of productivity.
This may result in us incurring liability to third parties due to the actions of contractors, which could have a material
adverse effect on our business, operating results and financial condition.
In PNG, although it is presently uncertain the extent to which, and how, the PNG Department of Commerce and Industry’s
“Papua New Guinea National Content Policy for Resource Sectors 2023" will be applied to our current operations and projects in
PNG, if these provisions are introduced, we believe they will prescribe increased levels of participation by locally-owned
businesses in the provision of goods and services, which could adversely affect our ability in PNG to manage the costs of goods
and services to our operations, which would, in turn, have an adverse effect on our business, operating results and financial
condition.
We are dependent on a number of highly-integrated communication and IT systems, any major disruption to which
could have an adverse effect on our operations and financial results
We utilise and rely on various internal and external IT systems to support our business activities. Significant damage or
interruption of our IT systems, whether due to accidents, human error, natural events or malicious acts, may lead to disruptions
to our business operations and/or essential data being irretrievably lost, exposed or damaged, thereby adversely affecting our
business, operating results and financial condition.
Estimations of our reserves are based on a number of assumptions, at a specific point in time, including mining and
recovery factors, future cash costs of production, exchange rates, and the relevant commodity prices; as a result,
metals produced in future may differ from current estimates
The mineral reserve estimates in this annual report are estimates of the mill-delivered quantity and grade of metals in our
deposits and stockpiles. They represent the amount of metals that we believe can be mined, processed and sold at prices
sufficient to recover our estimated future cash costs of production, remaining investment and anticipated additional capital
expenditures. Our mineral reserves are estimated based on a number of factors, which have been stated in accordance with the
South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, 2016 edition
(“SAMREC, 2016”). For the purposes of this Harmony 2025 Form 20-F, our Mineral Resources and Mineral Reserves have been
classified in accordance with Item 1302(d)(1)(iii)(A) of Regulation S-K. Calculations of our mineral reserves are based on
estimates of:
•future cash costs;
•future commodity prices;
•future currency exchange rates; and
•metallurgical and mining recovery rates.
These factors, which significantly impact mineral reserve estimates, are beyond our control. As a result, reserve estimates
in this annual report should not be interpreted as assurances of the economic life of our gold and other precious metal deposits
or the future profitability of operations.
Since these mineral reserves are estimates based on assumptions related to factors detailed above at a specific point in
time, should there be changes to any of these assumptions, we may in future need to revise these estimates. In particular, if our
cash operating and production costs increase or the gold price decreases, recovering a portion of our mineral reserves may
become uneconomical. This will lead, in turn, to a reduction in estimated reserves. Any reduction in our mineral reserves
estimate could materially adversely affect our business, operating results and financial condition.
Our operations have limited proved and probable reserves; exploration for additional resources and reserves is
speculative in nature, may be unsuccessful and involves many risks
Our operations have limited proved and probable reserves, and exploration and discovery of new resources and reserves
are necessary to maintain current gold production levels at these operations. Exploration for gold, other precious metals and
copper is speculative in nature, may be unsuccessful and involves risks including those related to:
•locating orebodies;
•geological nature of the orebodies;
•identifying the metallurgical properties of orebodies;
•estimating the economic feasibility of mining orebodies;
•developing appropriate metallurgical processes;
•obtaining necessary governmental permits; and
•constructing mining and processing facilities at any site chosen for mining.
Our exploration efforts might not result in the discovery of mineralisation, and any mineralisation discovered might not
result in an increase in resources or proved and probable reserves. To access additional resources and reserves, we will need
to complete development projects successfully, including extensions to existing mines and, possibly, establishing new mines.
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Development projects would also be required to access any new mineralisation discovered by exploration activities around the
world. We typically use feasibility studies to determine whether to undertake significant development projects. These studies
often require substantial expenditure. Feasibility studies include estimates of expected or anticipated economic returns, which
are based on assumptions about:
•future gold and other metal prices;
•anticipated tonnage, grades and metallurgical characteristics of ore to be mined and processed;
•anticipated recovery rates of gold and other metals from the ore; and
•anticipated total costs of the project, including capital expenditure and cash costs.
All projects are subject to project study risk. There is no certainty or guarantee that a feasibility study, if undertaken, will be
successfully concluded or that the project that is the subject of the study will satisfy our economic, technical, risk and other
criteria in order to progress that project to development.
A failure in our ability to discover new resources and reserves, enhance existing resources and reserves or develop new
operations in sufficient quantities to maintain or grow the current level of our resources and reserves could negatively affect our
business, operating results and financial condition.
We are subject to the risk of litigation, the causes and costs of which are not always known
We are subject to litigation, arbitration and other legal proceedings arising in the normal course of business, and we may
be involved in disputes that may result in litigation. Potential future litigation may arise from a variety of causes, including among
other things, business activities, environmental, health and safety matters, share price volatility, unlawful community protest
actions and failure to comply with disclosure obligations. The results of litigation, arbitration and other legal proceedings cannot
be predicted with certainty, but could include costly damage awards or settlements, fines, and the loss of licenses, concessions,
or rights, among other things.
In the event of a dispute, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in
subjecting foreign persons to the jurisdiction of courts in South Africa. An adverse or arbitrary decision of a foreign court could
have a material adverse impact on our financial performance, cash flow and results of operations.
South Africa
We are subject to numerous claims, including class actions or similar group claims relating to silicosis and other
occupational health diseases, and could be subject to similar claims in the future. A settlement in the silicosis class action claims
has been reached and a provision for silicosis has been made. A provision of R262 million has been recognised at 30 June
2025, for our potential cost to settle the silicosis and TB class actions that have been instituted against us in South Africa.
Significant judgment was applied in estimating the costs that will be incurred to settle the silicosis class action claims and related
expenditure and the final costs may differ from current cost estimates. Management believes the assumptions are appropriate,
however changes in the assumptions may materially affect the provision and final costs of settlement. There can be no
assurance that the ultimate resolution of this matter will not result in losses in excess of the recorded provision and the ultimate
settlement may have a material adverse effect on our financial position. For further information, see Item 8: “Financial
Information – Consolidated Statements and Other Financial Information – Legal Proceedings” and “Integrated Annual Report for
the 20-F 2025 – Social stewardship – Holistic health and wellness” on pages 141 to 153 for further information. See note 25
“Other Provisions – Provision for silicosis settlement” to our consolidated financial statements set forth beginning on page F-1.
It is possible that additional class actions and/or individual claims relating to silicosis and/or other occupational health
diseases will be filed against us in the future. We will defend all and any subsequent claims as filed on their merits. Should we
be unsuccessful in defending any such claims, or in otherwise favourably resolving perceived deficiencies in the national
occupational disease compensation framework that were identified in the earlier decision by the Constitutional Court, such
matters would have an adverse effect on our financial position, which could be material.
Papua New Guinea
In PNG, it is proposed to utilise deep sea tailings placement (“DSTP”) as the tailings management method for the Wafi-
Golpu Project, which method is authorised under the environment permit issued for the project. However, the grant of the permit
is currently the subject of two judicial review proceedings against the State of PNG, the first of which was instituted in March
2021 by a previous Governor of the Morobe Province in PNG who was opposed to DSTP and the second of which was instituted
in December 2022 by Huon Gulf coastal villagers represented by the Centre for Environmental Law and Community Rights Inc.
("CELCOR").
With regard to the proceedings instituted in March 2021, the Governor who succeeded the instituting Governor in
September 2022 was not opposed to DSTP and stated publicly his intention to withdraw the proceedings instituted by his
predecessor. As at 30 June 2025, he had not yet done so. The Governor passed away in September 2025 and, to the time of
filing of this report, the proceedings have not been withdrawn. With regard to the proceedings instituted in December 2022, the
matter went to substantive hearing on 12 June 2025 and, as at 27 October 2025, a ruling has not been made.
In addition to the judicial reviews, Harmony Gold (Australia) Pty Ltd ("HGA") and Newcrest Mining Limited (“Newcrest”), a
subsidiary of Newmont Corporation (“Newmont”), have been the subject of an Organisation for Economic Co-operation and
Development ("OECD") complaint lodged in November 2022 by Huon Gulf coastal villagers represented by CELCOR alleging
the breach (particularly regarding the plans to utilise DSTP) of various human rights and environmental requirements set out in
the Guidelines for Multinational Enterprises 2011 published by the OECD.
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Irrespective of the outcome of the CELCOR judicial review, it is possible that a class action or individual claim relating to
DSTP may be filed against us in the future, which (if successful) could have a material adverse impact on the Wafi-Golpu
Project.
Should we be unable to resolve disputes favourably or to enforce our rights, this may have a material adverse impact on
our financial performance, cash flow and results of operations.
The risk of unforeseen difficulties, delays or costs in implementing our business strategy and projects may lead
to us not delivering the anticipated benefits of our strategy and projects; in addition, actual cash costs, capital
expenditure, production and economic returns may differ significantly from those anticipated by feasibility studies for
new development projects
The successful implementation of our business strategy and projects depends upon many factors, including those outside
our control. For example, the successful management of costs will depend on prevailing market prices for input costs. The ability
to grow our business will depend on the successful implementation of our existing and proposed projects and continued
exploration success, as well as on the availability of attractive acquisition opportunities, all of which are subject to the relevant
mining and company specific risks as outlined in these risk factors.
It can take a number of years from the initial feasibility study until development/construction of a project is completed and,
during that time, the economic feasibility of production may change. In addition, there are a number of inherent uncertainties in
project development and construction including:
•the time to secure and provisions of necessary governmental and third party permits, licenses and permissions;
•timing and cost of constructing mining and processing facilities;
•availability and cost of skilled labour, power, water, fuel, mining equipment and other materials;
•accessibility of transportation and other infrastructure, particularly in remote locations;
•availability and cost of smelting and refining arrangements;
•availability of funds to finance construction and development activities; and
•spot and expected future commodity prices of metals including gold, silver, copper, uranium and molybdenum.
All of these factors, and others, could result in our actual cash costs, capital expenditures, production and economic returns
differing materially from those anticipated by feasibility studies.
In order to maintain or expand our operations and reserve base, we have sought, and may continue to seek to enter into
joint ventures or other alliance arrangements with third parties and make acquisitions of primarily gold and copper producing
companies or assets. See “– Risks Related to Our Corporate and Financing Structure and Strategy – We may experience
problems in identifying, financing and managing new acquisitions or other business combination transactions and integrating
them with our existing operations, we may not have full management control over future joint venture projects”.
However, there is no assurance that any future development projects will extend the life of our existing mining operations
or result in any new commercial mining operations. Unforeseen difficulties, delays or costs may adversely affect the successful
implementation of our business strategy and projects, and such strategy and projects may not result in the anticipated benefits,
which could have a material adverse effect on our results of operations, financial condition and prospects.
Certain of our operations are dependent on trackless mobile machinery (“TMM”), which exposes us to
interruptions, delays, and increased operational risk
Specific operations face elevated risks associated with the reliability and availability of TMM, which is critical to
mechanised mining and project execution. Adverse underground conditions, supply chain constraints, and skills shortages
contribute to equipment downtime and operational inefficiencies. These challenges pose potential threats to production
continuity, cost control, and the timely delivery of capital projects.
Our recent appointment of a new independent registered public accounting firm could result in additional costs,
which could adversely impact our business.
We recently appointed Ernst & Young Inc. ("EY") as our independent registered public accounting firm, replacing
PricewaterhouseCoopers Inc. ("PwC"). The transition to a new auditor involves inherent risks and costs, including transition and
onboarding costs in the form of additional audit fees and management time required during the initial phase. Due to the
complexity of our environment, this could take several years, as the new auditor establishes an understanding of our operations,
systems, and accounting processes. While we do not anticipate that the auditor transition will result in changes to our previously
reported financial results, the transition process may temporarily increase costs and resource demands on our teams involved in
the external audit.
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Risks Related to ESG
We may fail to meet ESG performance expectations and targets, which could result in reputational damage, loss of
stakeholder confidence, and material adverse effects on our business and access to capital
Harmony operates in an environment of increasing scrutiny regarding ESG performance from multiple stakeholder groups,
including investors, lenders, local communities, regulatory authorities, non-governmental organisations ("NGOs"), and other
parties. These stakeholders are increasingly focused on climate-related risks, governance practices, and the environmental and
social impacts of mining operations and investments. Investment capital allocation decisions, lending decisions, and stakeholder
engagement are increasingly driven by assessments of ESG performance, particularly regarding the safe operation of mines,
mitigation of local environmental and community impacts, reduction of greenhouse gas emissions, ethical standards, workplace
culture, human rights protections, regulatory compliance, and supply chain credibility.
Risks related to ESG performance expectations
Failure to meet internally or externally adopted ESG standards, or to satisfy stakeholder expectations regardless of legal
obligation, could result in significant reputational damage, loss of social license to operate, litigation, and constrained access to
capital from investors and lenders who may reallocate or decline to commit capital based on their assessment of our ESG
practices. Additionally, certain financial institutions from whom we borrow may require compliance with internationally-
recognised environmental, health, safety and social standards and benchmarks, and deviation from such standards could
adversely affect our existing financing arrangements and ability to secure future financing. Such requirements could impose
substantial compliance costs on our operations.
Beyond local regulatory compliance, our operations are subject to increasingly stringent internationally-recognised
standards and benchmarks, whether adopted by jurisdictions in which we operate or expected by stakeholders. For example,
companies registered in OECD-member countries are subject to OECD complaint processes regarding alleged breaches of the
OECD Guidelines for Multinational Enterprises occurring anywhere in the world. In November 2022, HGA and Newcrest (in
relation to their participation in the Wafi-Golpu Joint Venture) were the subject of an OECD Specific Instance complaint lodged
with the OECD National Contact Point in Australia, alleging breaches regarding human rights and environmental requirements,
particularly concerning plans to utilise DSTP. On 29 August 2025, the OECD Examiner published its report, finding that certain
activities appeared not to align with the OECD Guidelines in some areas and making a number of recommendations. Although
compliance with such recommendations is voluntary, adverse findings carry reputational risk and may signal to stakeholders and
financiers areas requiring remediation.
Risks related to meeting ESG targets
Harmony has published quantitative targets and metrics relating to ESG aspects including greenhouse gas emissions,
energy use, and water management, which are subject to regular public reporting and external scrutiny. Our ability to meet these
targets is dependent on our own operational actions, the regulatory policy frameworks and actions of governments in countries
where we operate, clear and timely regulatory guidance to support achievement of targets, and actions of participants in our
value chain and the broader society. Unforeseen factors beyond our control, including changes in regulatory regimes,
unavailability of requisite technologies, economic constraints, supply chain disruptions, or slower-than-anticipated societal
transitions, could impede our progress toward these targets.
Failure to meet published ESG targets could result in material adverse effects on our business, operating results, and
financial condition. Additionally, such failure could expose us to reputational damage, litigation risk from stakeholders, and loss
of investor confidence, potentially affecting our share price and ability to access capital markets.
Compounding risks from political and social controversy
ESG practices, particularly regarding inclusion, diversity and equity ("ID&E"), have become increasingly subject to political
controversy in the United States in recent years. Our policies and practices regarding ID&E and other ESG-related matters,
including previously established goals and initiatives and any disclosures mandated by non-US laws, may expose us to legal
and reputational risks, including anti-ESG and anti-ID&E-related orders, investigations, legislation, litigation, media scrutiny,
boycotts, and negative publicity from investors, employees, customers, and other stakeholders.
Jurisdictional differences and evolving regulatory landscapes create conflicting expectations from various stakeholder
groups—including governments, NGOs, investors, customers, employees, and other third parties. The Company may be unable
to satisfy the divergent or conflicting expectations of all stakeholders regarding ESG matters, ID&E initiatives, and other ESG-
related aspects of our business, which could result in reputational damage and business disruption.
Cumulative impact
The cumulative effect of these interconnected ESG risks comprising of stakeholder expectations, regulatory developments,
published targets, and political controversy could have a material adverse effect on our financial condition, operating results,
share price, access to capital, social license to operate, stakeholder relationships, and overall business resilience. We may be
required to implement increasingly stringent ESG practices and standards to meet evolving stakeholder expectations and
regulatory requirements, with associated compliance costs, management attention, and operational complexity. Failure to
effectively navigate these multifaceted ESG challenges could adversely impact our reputation, brand image, ability to attract and
retain capital and talent, and long-term business sustainability.
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Climate change may present physical and transition risks that could materially and adversely affect our operations,
profitability, and long-term sustainability
Climate change is widely regarded as one of the most severe global threats, with environmental risks like extreme weather
and climate action failure dominating global risk outlooks across all timeframes. Climate change presents both physical and
transitional risks to our operations, supply chain, and long-term financial performance.
Physical climate risks are predicted to increase in frequency and intensity, posing growing threats to our mining operations
and infrastructure. These risks include altered rainfall patterns and disruption to the water cycle, rising sea levels, water scarcity,
higher temperatures, and more frequent extreme weather events such as fires, floods, droughts, and higher intensity storm
events. Climate change intensifies floods and droughts by disrupting precipitation patterns, creating compound risks of both
water scarcity and flooding damage. These events can damage critical infrastructure, disrupt mining, transport, mineral
processing, and rehabilitation activities, strain energy and water resources, potentially halt production, and elevate health and
safety risks with potential consequences for our workforce, nearby communities, and operational continuity.
Transition risks arise from evolving climate policies, carbon pricing mechanisms, regulatory requirements, and stakeholder
expectations. These include potential carbon taxes, mandatory climate disclosure requirements, emissions reduction targets,
and shifting market dynamics as governments and investors accelerate decarbonisation efforts. Such measures may result in
increased compliance costs, capital expenditure requirements for emissions reduction technologies, changes to our operating
licenses or permits, pressure to accelerate our decarbonisation pathway, and potential impacts on the competitiveness of
carbon-intensive operations. Failure to adequately respond to these transition risks could affect our access to capital,
stakeholder relations, regulatory standing, and social license to operate.
Together, these physical and transition risks could materially impact our operations, profitability, sustainability, and long-
term resilience. Our ability to manage these interconnected climate risks will be critical to maintaining operational continuity,
meeting stakeholder expectations, and ensuring the sustainability of our business model in a carbon-constrained economy.
We are subject to extensive environmental regulations in the countries in which we operate, and compliance costs,
regulatory changes, and potential non-compliance could have a material adverse effect on our business, operating
results and financial condition
As a mining company, we are required to follow strict environmental regulations covering pollution prevention, water
management, waste disposal, biodiversity conservation, occupational health and safety, management of toxic substances and
mine closure. We expect compliance costs relating to environmental regulation to continue rising in South Africa, Australia and
PNG. In addition, stakeholders increasingly pressure us to improve energy efficiency, reduce our carbon footprint, use resources
responsibly and be transparent about managing climate-related risks and opportunities.
South Africa
In South Africa, our operations are governed by the MPRDA, the NEMA and numerous other environmental laws and
regulations that are regularly updated, amended and supplemented, imposing additional and changing obligations on mining
companies. See Item 4: "Information on the Company – Business Overview – Regulation – Laws and Regulations Pertaining to
Environmental Protection - South Africa" for detailed discussion of the regulatory framework.
Financial Provision and Rehabilitation Liabilities
Under South African law, mining right holders remain responsible for environmental liabilities, pollution, ecological
degradation, water treatment and sustainable mine closure until the DMPR issues a closure certificate, and under NEMA this
responsibility may continue indefinitely even after closure certification. We are required to annually assess environmental
liabilities and provide financial security for rehabilitation, closure and post-decommissioning management.
The Financial Provision Regulations, 2015 impose significantly more stringent obligations than previous guidelines,
including mandatory inclusion of preliminary costs, imposition of VAT at 15%, prohibition on withdrawal of trust funds for
concurrent rehabilitation, and ceding of funds to the Minister for latent liabilities. While the compliance deadline for existing rights
has been indefinitely delayed pending new regulations, the ultimate requirements remain uncertain. There are concerns about
the ambiguity of current and proposed provisions, which may result in misinterpretation, mis-application and disputes with the
Department of Forestry, Fisheries and Environment (the "DFFE"), any of which could have a material adverse effect on our
business, operating results and financial condition.
Under the National Environmental Management Laws Amendment Act, 2 of 2022 ("NEMLAA"), financial provision retained
by the Minister must be transferred to government-controlled accounts. We will not control how these funds are used but will
remain liable for environmental impacts. If anticipated liabilities do not materialize, there is no mechanism for recovering the
funds, creating potential for permanent loss of capital.
Proposed amendments to the MPRDA and NEMA seek to bring pre-2004 processing residue stockpiles and deposits
within the regulatory framework, which may require us to provide substantial additional financial provision for rehabilitation of
these facilities. We may also face increased environmental costs if neighbouring mines fail to meet their water management
obligations. The adoption of additional or more stringent requirements, particularly for hazardous waste management,
groundwater protection and rehabilitation of closed mines, may result in material additional costs and liabilities.
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Climate Change Legislation
The Climate Change Act 22 of 2024 (the "Climate Change Act") came into effect on 17 March 2025, though many key
provisions remain deferred pending development of enabling regulations. The Climate Change Act confirms that sectoral
emissions targets ("SETs") will be established for GHG emitting sectors and will become more stringent over time through five-
year review cycles. Large emitters will be allocated carbon budgets limiting permissible GHG emissions and must submit and
implement GHG mitigation plans. Failure to comply with allocated carbon budgets will require remedial action and may result in
penalties.
A particular concern is that government agencies must review and may amend existing administrative decisions—including
environmental authorisations, atmospheric emissions licenses, and mining rights—to ensure climate change risks are
considered and to give effect to the Climate Change Act's objectives. Before amending such approvals, authorities must provide
notice and opportunity for representations, but the Climate Change Act provides grounds for material changes to existing
operational approvals. Third parties such as NGOs may seek to compel these reviews. The proposed amendments to existing
approvals may have material implications on our business and operations and may create significant investment uncertainty.
Permitting and Appeals Delays
The National Appeal Regulations, 2025 introduced a new category of complex appeals under NEMA and related
environmental laws. The regulations allow appeal administrators to appoint advisory appeal panels without specifying
timeframes, creating potential for appeals to remain unresolved for extended periods. These delays may hinder project
timelines, prolong permitting uncertainty and increase operational and compliance risks, which could materially impact our ability
to execute projects as planned, delay investment decisions and adversely affect our business, operating results and financial
condition.
Tailings management
For discussion of TSF-specific environmental and safety regulations, see "— Compliance with tailings management
requirements and standards, and potential liabilities in the event of a failure to timely comply or an incident involving a TSF,
could adversely impact our financial condition, our operational results and our reputation."
Australia
In Queensland, our Eva Copper Project operations are subject to the Environmental Protection Act 1994 (Qld) (the
"Queensland EP Act") and Environmental Protection Regulations 2019 governing Environmental Authorities ("EAs") for
environmentally relevant activities ("ERAs"), the Commonwealth Environment Protection and Biodiversity Conservation Act
1999 ("EPBC Act") protecting matters of national environmental significance ("MNES"), and the National Greenhouse and
Energy Reporting Act 2007 ("NGER Act") establishing mandatory GHG and energy reporting frameworks. See Item 4:
"Information on the Company – Business Overview – Regulation – Laws and Regulations Pertaining to Environmental
Protection – Australia" for detailed discussion of the regulatory framework.
The Eva Copper Project currently holds an EA and is pursuing further amendments expected to conclude in 2026. While
self-assessments indicate the project is unlikely to significantly impact MNES under the EPBC Act, the risk of not having
obtained Commonwealth approval cannot be entirely eliminated. Future project changes may require EPBC Act referrals,
creating potential approval delays or conditions.
The NGER Act requires facilities exceeding specified thresholds to register and report annually on GHG emissions, energy
production and consumption. Non-compliance risks include enforcement action by the Clean Energy Regulator, civil penalties,
public enforcement notices, audit findings, regulator scrutiny and reputational damage from inaccurate or incomplete public
reporting. The Safeguard Mechanism applies additional obligations to facilities with scope 1 emissions exceeding 100,000
tonnes of carbon dioxide equivalent ("CO2-e") annually, requiring emissions to remain within declining baselines consistent with
Australia's net zero trajectory (43% below 2005 levels by 2030, 62-70% by 2035, net zero by 2050). The Eva Copper Project's
predicted emissions may trigger Safeguard Mechanism obligations, potentially requiring emission reduction measures or
purchase of carbon credits.
Under the Queensland EP Act and the Mineral and Energy Resources (Financial Provisioning) Act 2018 (the "MERFP
Act"), we cannot conduct resource activities unless an Estimated Rehabilitation Cost ("ERC") decision is in effect and we have
provided financial security through contributions to the scheme fund or sureties. Revised ERC applications must be prepared
and approved before commencing further construction and mining activities, creating potential for delays or increased financial
provision requirements as the project advances.
Sustainability-related disclosures and claims are subject to prohibitions against misleading and deceptive conduct under
the Australian Corporations Act 2001 (Cth) ("Corporations Act") and the Australian Securities and Investments Commission Act
2001 (Cth). The Australian Securities and Investments Commission ("ASIC") expects sustainability claims to be factually
accurate, based on reasonable grounds, supported by verifiable evidence, and reflective of actual practices. Misleading claims
may expose us and our officers to enforcement action, reputational damage and stakeholder litigation. We are also subject to
the Australian Sustainability Reporting Standards effective as of January 2025—see "— Compliance with emerging climate
change regulations could result in significant costs for us - Australia."
Papua New Guinea
Our PNG operations are subject to the PNG Environment Act 2000 ("PNG Environment Act") and related regulations
governing discharges and requiring Environment Permits ("EPs") for prescribed activities. An Environmental Impact Statement
("EIS") is required for activities likely to have significant adverse environmental impact, and the Environment Minister's approval
in principle is required before the Conservation and Environment Protection Authority ("CEPA") may grant a Level 3 EP.
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The Wafi-Golpu Project received its EP on 18 December 2020, including conditions relating to DSTP. Should we breach
any obligations under our EP or the PNG Environment Act, our EP could be suspended or cancelled, or we could be subject to
fines or other sanctions, which could have a material adverse effect on our results of operations and financial condition.
PNG is undertaking a comprehensive mining regime review that includes development of a Biodiversity Offsets Policy
(anticipating mandatory biodiversity offset payments) and a National Oceans Policy. These policy developments and potential
legislative changes create uncertainty regarding future compliance requirements and costs. See Item 4: "Information on the
Company – Business Overview – Regulation – Laws and Regulations pertaining to Environmental Protection – Papua New
Guinea" for detailed discussion of the regulatory framework.
General
Compliance with existing or new environmental legislation, which increases the burden of compliance or the penalties for
non-compliance, may cause us to incur significant costs. Failure to comply with environmental legislation and the conditions of
our mining rights in any jurisdiction in which we operate may result in fines, penalties, reputational damage, loss of existing
mining rights, or inability to acquire new rights to mine, each potentially having a material adverse effect on our business,
operating results and financial condition.
The socio-economic landscape in the regions in which we operate may have an adverse effect on our operations and
profits
We have operations in South Africa, Australia and PNG. As a result, changes to or instability in the social, economic or
political environment in any of these countries or in countries proximate to them could affect an investment in us. Without
limitation, political risks may include the following: political instability and terrorism; nationalisation and resource nationalism;
change in legislative, regulatory or fiscal frameworks; renegotiation or nullification of existing contracts, leases, permits or other
agreements; restrictions on repatriation of earnings or capital; changes in laws and policy; and socio-economic risks including
civil unrest and criminality. The impact of future long-term health related issues may heighten social tensions and demands, as
individuals look to the mining industry for job creation opportunities and other resources and benefits.
The African National Congress (“ANC”) has been the governing party in South Africa since 1994. After a national election
in 2024, the ANC was unable to secure an outright majority for the first time and entered into a coalition government with various
other national parties. This coalition government creates increased policy uncertainty and potential for political instability, which
could adversely impact the socio-economic framework in South Africa and thus on our operating results and financial condition.
Changes in the political landscape may result in shifts in mining policy, taxation, labour regulation, or other legislative and
regulatory frameworks affecting our operations.
In Papua New Guinea, the government of Prime Minister James Marape has advocated a policy of "Take Back PNG" since
2019, intended to increase the PNG Government’s share of the proceeds from mining, enhance landholder and provincial
government equity participation in mining projects and promote direct involvement in mining and exploration by PNG
Government-owned enterprises. This policy has witnessed the presentation of various proposed revisions to the mining regime
which (if introduced and applied to our operations and projects) would have a materially adverse impact.
In 2025, PNG experienced political volatility in the form of motions of no-confidence against the Prime Minister, however
these leadership challenges failed and PNG parliamentary rules prescribe no further such motions are permissible until after the
next election. Localised unrest and breakdowns of law and order, economic challenges and shortages of foreign currency are
ongoing.
It is difficult to predict the future political, social and economic environment in these countries, or any other country in which
we operate save to state that any social, economic or political changes or instability may directly impact Harmony, adversely
affecting the general business environment and our business, results of operations and financial condition. For discussion of
restrictions on movement of funds and capital deployment, see "— Our financial flexibility could be constrained by the Exchange
Control Regulations of the countries in which we operate".
Given the nature of mining and the type of mines we operate, we face a material risk of liability, delays and increased
cash costs of production from environmental and industrial accidents and pollution compliance breaches
The business of gold mining involves significant risks and hazards, including environmental hazards and industrial
accidents. In particular, hazards associated with underground mining include:
•rock bursts;
•seismic events;
•underground fires;
•cave-ins or fall-of-ground;
•discharges of gases and toxic chemicals;
•release of radioactive hazards;
•flooding or droughts;
•mining of pillars (integrity of shaft support structures may be compromised and cause increased seismicity);
•processing plant fire and explosion;
•critical equipment failures;
•inability to access methane filled shafts for rehabilitation;
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•accidents and loss-of-life incidents; and
•other conditions resulting from drilling, blasting and the removal and processing of material from a deep-level mine.
Hazards associated with opencast mining (also known as open-pit mining) include:
•flooding of the open-pit;
•collapse of open-pit walls or slope failures;
•processing plant fire and explosion;
•accidents associated with operating large open-pit and rock transportation equipment;
•accidents associated with preparing and igniting of large-scale open-pit blasting operations; and
•major equipment failures.
Hazards associated with construction and operation of waste rock dumps and TSFs include:
•accidents associated with operating a waste dump and rock transportation;
•production disruptions caused by natural phenomena, such as floods and droughts and weather conditions,
potentially exacerbated by climate change;
• dam, wall or slope failures; and
•contamination of ground or surface water.
We are at risk from any or all of these environmental and industrial hazards. In addition, the nature of our mining
operations presents safety risks. Our operations are subject to health and safety regulations, which could impose additional
costs and compliance requirements. We may face claims and liability for breaches, or alleged breaches, of such regulations and
other applicable laws. Any legislative changes relating to financial provision could add to the costs. The occurrence of any of
these events could disrupt production, increase cash costs and, individually or in the aggregate, have a material adverse effect
on our business, results of operations and our financial condition.
Mining companies are increasingly expected to provide benefits to affected communities; failure to comply with, and/or
go beyond, our legal obligations could result in lawsuits, additional operational costs, investor divestment and impact
our “social license to operate”, which could adversely impact our business, operating results and financial condition:
we are finding increasing expectations on our business to provide social investment beyond our legal obligations,
especially as communities demand services and basic infrastructure from companies such as Harmony (where gaps in
local government services are perceived or experienced)
As a result of public concern about the perceived ill effects of economic globalisation, businesses in general and large
international companies such as our company, in particular, face increasing public scrutiny of their activities.
Like other mining companies, we are under pressure to demonstrate that while we seek a satisfactory return on investment
for shareholders, other stakeholders including employees, contractors, regulators, communities surrounding the operations and
the countries in which we operate, also seek to benefit from our commercial activities. Such pressures tend to be particularly
focused on companies whose activities are perceived to generate significant revenues and/or have a high impact on the social
and physical environment.
Stakeholder pressure takes many forms, including the loss of license to operate, lawsuits and investor withdrawal. The
potential consequences of these pressures include reputational damage and increased social spending obligations. There is
also increasing action by members of the general financial and investment communities, such as asset managers, sovereign
wealth funds, public pension funds, universities and other groups, to promote improvements in ESG performance by us and
others.
Existing and proposed mining operations are often located at or near existing towns and villages and other infrastructure,
or natural water courses. The impacts of dust generation, waste storage, water quality or shortages may be immediate and
directly adverse to those communities; poor environmental management practices, in particular, adverse changes in the supply
or quality of water can result in community protest, regulatory sanctions or ultimately in the withdrawal of community and
government support. While mining operations are intended to be designed to mitigate the impact on such communities and the
environment, there can be no assurance that they will do so, and the occurrence of any of these events could disrupt
production, increase cash costs and, individually or in the aggregate, have a material adverse effect on our business, results of
operations and our financial condition.
Australia
Mining in Australia is subject to the Native Title Act 1993 (Cth) (the “Native Title Act”). Any "future act" on land or waters
that will affect native title rights and cultural heritage interests is subject to native title processes intended to protect such rights
and interests through a right to negotiate enabling affected parties to reach agreement on the terms of consent concerning the
proposed future acts, including monetary compensation, employment and training, contracting opportunities and cultural
heritage. These arrangements are captured in Indigenous Land Use Agreements, which are then registered with the National
Native Title Tribunal. Changes to native title legislation, evolving interpretations of native title rights, or failure to maintain positive
relationships with native title holders could result in challenges to our agreements, delays in obtaining necessary consents for
future mining activities, increased costs, or restrictions on our ability to conduct operations.
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Papua New Guinea
There is no native title or similar regime in place in PNG, however the majority of land is held under customary ownership.
We are required under the PNG Mining Act and PNG Environment Act to pay landholders compensation for any loss or damage
sustained by them arising from our exploration or mining activities. In certain prescribed instances, the quantum of these
payments is regulated, but otherwise is negotiated (with determination by a mine warden in the event of disagreement).
In addition, it is practice under the PNG mining regime for mining lease and special mining lease holders to enter into a
negotiated Memorandum of Agreement (“MOA"), and also referred to as a Community Development Agreement ("CDA") with
the PNG Government, the affected provincial and local level governments, the affected landholder(s) and other stakeholder
organisations regarding the sharing of benefits derived from the mining operations. These shared benefits generally include a
participation in royalties payable by the tenement holders to the PNG Government but may further extend to local infrastructure
projects and other social performance objectives.
Disruptions to operations or delays in projects attributable to a lack of community support or community actions can
translate directly into a loss of production and increase in operational costs, a decrease in the value of a project or an inability to
bring a project to, or maintain, production. For example, our PNG operations have on occasion been disrupted by the blockading
of access routes by landholders and occupants of the land the subject of such operations. These disruptions arise from a range
of operational and non-operational grievances, including non-distribution by the PNG Government to local communities of mine-
derived royalties and other benefits, inter-community land ownership disputes, unhappiness with local or regional infrastructure
or services delivery, and local business rivalries regarding the provision of goods and services to the operations.
The cost of implementing measures to support sustainable development could increase capital expenditure and operating
costs and therefore adversely impact our reputation, business, operational results and financial condition.
See "Integrated Annual Report for the 20-F 2025 – Social stewardship – Empowering communities" on pages 166 to 173
and "Harmony – Stakeholder engagement” on pages 29 to 34.
Compliance with emerging climate change regulations could result in significant costs for us
Growing global recognition of the GHG emissions play in climate change has driven governments to introduce regulations
requiring companies to disclose and reduce their emissions. Non-compliance increasingly carries financial penalties, carbon
taxes, and reputational consequences. The introduction of IFRS S2 adds further complexity, requiring transparent reporting of
material climate risks, opportunities, and Scope 1, 2, and 3 emissions, all of which may increase our compliance burden and
operational costs.
Reporting GHG Emissions
In South Africa, the National Greenhouse Gas Emission Reporting Regulations require entities to register any operations
that involve fuel combustion activities related to mining and quarrying that exceed a thermal capacity of 10MW, along with
certain other listed activities. We must report GHG emissions and activity data annually for relevant operations by 31 March of
each year in line with the Technical Guidelines for Monitoring, Reporting and Verification of Greenhouse Gas Emissions by
Industry ("Technical Guidelines") which align with the methodologies from the Intergovernmental Panel on Climate Change
(“IPCC”). These Technical Guidelines support the South African National Greenhouse Gas Regulations issued under National
Environmental Management: Air Quality Act, 39 of 2004 ("NEMAQA") and outline the reporting methodology specified in the Air
Quality Act.
In Papua New Guinea, there is currently no mandatory national GHG reporting framework.
In Australia, we are not currently required to report under the National Greenhouse and Energy Reporting (NGER)
Scheme, but future obligations are expected as our operations expand, particularly with the Eva Copper Project and the CSA
mine that forms part of our acquisition of MAC Copper Limited ("MAC"). Once thresholds are met, annual reporting of GHG
emissions and energy use will be required in line with the NGER Act and IPCC methodologies.
GHG Emissions Reductions
Our operations generate GHG emissions both directly (Scope 1), through on-site fuel combustion and industrial processes,
and indirectly (Scope 2) through the consumption of electricity from external utilities. While Scope 2 emissions are classified as
indirect, they remain within our operational control through decisions around energy sourcing, efficiency, and supplier
engagement and consequently are still attributable to our operations. In contrast, Scope 3 emissions which arise from activities
across our value chain such as transportation, procurement, and downstream processing are largely outside our direct control
but still represent a significant portion of our total emissions footprint.
South Africa, Australia and PNG have ratified key international climate agreements, including the Paris Agreement,
adopted at the UN Climate Conference in December 2015. Under this treaty, member countries must outline how and when they
plan to reduce GHG emissions through nationally determined contributions ("NDC") tailored to their national circumstances:
•South Africa’s NDC aims for GHG emissions to peak between 2020 and 2025, plateau from 2025 to 2035 and thereafter
decline from 2036 onwards.
•South Africa’s published a draft updated NDC in 2025 which introduces a new range of 320–380 MtCO₂e. The draft
supports a just transition to net zero CO₂ emissions by 2050, with plans for 36 GW of renewable energy by 2035, green
industrialisation, and structural economic transformation.
•Australia has committed to reaching net zero emissions by 2050 and, in 2022,set a 2030 target to reduce emissions by
43% from 2005 levels. In September 2025, Australia announced a further target of 62-70% below 2005 levels by 2035.
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•PNG’s GHG emissions have historically been minimal. However, its NDC contemplates that economic growth will increase
fuel use. PNG plans to cut fossil fuel emissions in the electricity sector and transition to 100% renewable energy by 2030,
subject to procuring necessary funding.
To achieve its commitments, the South African Government is implementing legislation aimed at achieving a lower carbon
economy. These measures include the Carbon Tax Act, 15 of 2019 (the “Carbon Tax Act”) and the Climate Change Act.
In terms of the Carbon Tax Act, any entity conducting activities in South Africa that produce GHG emissions above defined
thresholds is liable for carbon tax. The tax rate is currently R309 per tonne of GHG emissions generated by burning fossil fuels,
unintentionally emitting GHGs during the extraction, processing, delivery and burning of fossil fuels for energy production,
including from industrial plant and pipelines, and conducting manufacturing processes that chemically and physically transform
materials.
Authorities determine taxable GHG emissions by multiplying the relevant GHG emission factor (set out in Schedule 1 of the
Carbon Tax Act) by the quantity of fuel combusted or raw material used or produced, expressed in tonnes of CO2-equivalent.
The statutory carbon tax rate increases annually in accordance with the annual tax rates published in the Taxation Laws
Amendment Act, 2022 to reach R462 in 2030.
The Climate Change Act, key provisions of which have yet to come into force, will impose “carbon budgets” on entities
incertain high-emitting industries, such as mining. The carbon budgets are intended to operate as statutory limits for CO2
emissions. It is expected that the Carbon Tax Act will be aligned with the Climate Change Act, through higher rates of carbon tax
in respect of emissions exceeding the applicable carbon budget. Moreover, it is unclear to what extent we will be able to make
use of allowances that are currently embedded in the carbon tax framework under the Carbon Tax Act.
To reduce the significant tax burden calculated by multiplying total GHG by R308, the Carbon Tax Act currently allows for
various “allowances” that can reduce the payable carbon tax by up to 95%. These include:
• allowance for fossil fuel combustion;
•allowance for industrial process emissions;
•allowance in respect of fugitive emissions;
•a trade exposure allowance;
•a performance allowance;
•a carbon budget allowance; and
•an offset allowance.
These allowances will likely be reduced over time.
These allowances currently reduce the effective carbon tax rate to between R10 and R76 per tonne of GHG. Pursuant to
section 19 of the Carbon Tax Act, the South African Minister of Finance ("Minister of Finance") must make regulations
regarding: the sub sector GHG emissions intensity benchmark required in order to calculate the performance allowance, the
manner in which the trade exposure allowance must be determined and carbon offsets which have all now been promulgated.
The South African National Treasury published amendments to the National Greenhouse Gas Emission Reporting Regulations
in May 2024, extending the eligibility of carbon of offset projects to 31 December 2025, to align with the Phase 1 carbon tax
period extension and confirming that companies can continue to use carbon credits issued by these projects to reduce their
carbon tax liability
We have provisionally estimated our carbon tax liability to 2030 and beyond. However, the full impact of the Carbon Tax Act
remains uncertain. Internally, we have aligned our South African carbon price with the official tax rate. In the short term we may
face pass-through costs from suppliers due to increased fuel prices.
Alongside the carbon tax, a carbon fuel levy was introduced under the Customs and Excise Act 91 of 1964 ("Customs and
Excise Tax"), as part of the national fuel levy regime. The carbon tax on liquid fuels is applied at the fuel source and is expected
to raise fuel prices by R0.10/liter for petrol and R0.09/liter for diesel, which will increase our operational expenses.
Until 31 December 2025, the carbon tax will remain a relatively low cost. However, we expect the allowances to be
reduced and the tax rates to increase thereafter. It is also anticipated that carbon taxes will apply to electricity generated from
fossil fuels. The cost impact of carbon tax on electricity usage could range from R100m to R600m from 2026 to 2030. Although
these rates as well as the longer-term assumptions have been built into our business plans, with a 300% absolute increase in
the price of carbon over the next five years, we believe it will put significant pressure on our business.
Electricity-related GHG emissions represent our largest emission source. Electricity accounts for approximately 15% of our
cash costs in South Africa. While cost management is clearly a strategic issue for us, the delivery of a stable and reliable energy
supply is even more critical due to its direct impact on both production and health and safety. Additional energy taxes and
regulations (such as emission measurement and reduction, audit processes and human resource costs) will significantly affect
our operations. We have initiated several renewable energy projects to supplement our energy supply needs and reduce our
reliance on electricity supplied by Eskom which is predominantly generated by coal-fired power stations.
As stated above, it is anticipated that numerous regulations will be promulgated in terms of the Climate Change Act.
However, the broad scope and evolving nature of South Africa’s climate policy make it difficult to assess their full impact. Such
regulatory initiatives and related costs could have a material adverse effect on the business, operating results and financial
condition.
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Climate Change legislation and policy
South Africa
As mentioned above, the Carbon Tax Act and Climate Change Act are the primary statutes regulating GHG emissions
reduction and climate change resilience.
Certain jurisdictions (like the EU) plan to implement carbon border adjustment mechanisms ("CBAMs"), effectively import
levies based on the embedded GHG emissions on goods imported into their territory. Currently, this does not apply to precious
metals. However, these carbon border taxes could be extended to other products (including precious metals) in the future. While
the taxes would be imposed on the importer and may be reduced to reflect carbon taxes already paid in South Africa, they could
nevertheless impact our competitiveness in these markets and may impose reporting and disclosure obligations regarding GHG
emissions generated in producing products. We continue to monitor both the jurisdictions imposing CBAMs as well as the
industries to which they apply.
Australia
In 2022, Australia passed the Climate Change Act 2022 (Cth) which enacts the 2030 and 2050 emission reduction targets
in legislation. The Australian government has also progressed reforms in a number of sectors to align with its climate targets,
including amendments to the Safeguard Mechanism through the Safeguard Mechanism (Crediting) Amendment Act 2023 (Cth),
the primary tool to limit emissions from large emitting facilities. See “– We are subject to extensive environmental regulations in
the countries in which we operate, and compliance costs, regulatory changes, and potential non-compliance could have a
material adverse effect on our business, operating results and financial condition – Australia”.
The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth) introduced a
mandatory annual sustainability report for certain entities, to be prepared alongside financial reports under the Corporations Act
2001 (Cth). The sustainability report must comply with the Australian Sustainability Reporting Standard AASB S2 Climate-related
Disclosures, which is substantially aligned with the IFRS S2 standard. These disclosures include governance, strategy, risk
management, and metrics and targets related to climate-related risks and opportunities.
The sustainability report is subject to phased assurance requirements, transitioning from limited to reasonable assurance
over a four-year period, as outlined in the Auditing and Assurance Standards Board standards ASSA 5000 and ASSA 5010. The
report must be lodged with ASIC and include a directors' declaration, with disclosures made on a factual and good-faith basis.
Materially inaccurate or unsubstantiated reporting and other external disclosures may expose the company and its officers to
regulatory action under Australian law, including enforcement by ASIC.
The NGER Act establishes a mandatory framework for reporting GHG emissions, energy production and energy
consumption in Australia. Thresholds apply at facility-level and corporate group level. Facilities or controlling corporations that
exceed specified thresholds must register and report annually to the Australian Clean Energy Regulator. These disclosures
underpin Australia's climate policy, international reporting obligations, and the Safeguard Mechanism, which imposes emissions
limits on large facilities. Key risks associated with non-compliance with the NGER Act include enforcement action by the
Australian Clean Energy Regulator, civil penalties (including fines and public enforcement notices), adverse audit findings and
regulator scrutiny and reputational risk associated with inaccurate or incomplete reporting noting that NGER data is publicly
disclosed if above the publication threshold (currently 50,000 tCO2-e).
Such regulatory initiatives and related costs, while they are not expected to have significant impact in the near term, could
have a material adverse effect on the business, operating results and financial condition in the future.
Papua New Guinea
In PNG, the PNG Climate Change (Management) Act 2015 provides the regulatory framework with respect to climate
change in PNG, and establishes PNG’s Climate Change and Development Authority as the coordinating entity for climate
change related policies and actions across PNG and the designated National Authority under the UN Framework Convention on
Climate Change. Implementation actions under this policy to date have been very limited, however in January 2021 the PNG
Climate Change Fees and Charges came into effect which include taxes on carbon in fuel products and a Green Fee (a
departure tax for non-residents leaving PNG), and in August 2022 a draft PNG Climate Change (Management) (Carbon
Markets) Regulation was circulated for discussion. Future implications of the climate change policy on our operations in PNG
are still being established and while they are not expected to have significant impact in the near term, they may potentially have
a material adverse effect on our business, operating results and financial condition in the future.
Additionally, a number of regulators are adopting or considering new environmental disclosure rules. For example, in
March 2024, the SEC adopted final rules under SEC Release No.34-99678, The Enhancement and Standardisation of Climate-
Related Disclosures for Investors (the “SEC Climate Disclosure Rules”), which will require registrants to provide certain
climate-related information in their registration statements and annual reports. While the SEC stayed the effectiveness of the
SEC Climate Disclosure Rules in April 2024 and in March 2025 announced it was ending its defence of the rules in pending
litigation, meaning it is uncertain if or when compliance will be mandated. However, a number of other jurisdictions are also
mandating disclosure of climate-related risks and effects. These recently enacted and proposed regulations may impose
meaningful costs and demand significant attention from management, all of which could affect our business and our results of
operations.
See "Integrated Annual Report for the 20-F 2025 – Environment stewardship – Building a lasting positive legacy", and
"Environment stewardship – Climate and energy management” on pages 88 to 90 and 98 to 104 for disclosure regarding our
GHG emissions.
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The cost of occupational health care services and the potential liabilities related to occupational health diseases may
increase in future and may be substantial
Our operations are subject to health and safety legislation and regulations binding on us, which could impose significant
cost burdens.
South Africa
In South Africa, the MHSA imposes various duties on mines and grants the Mine Health and Safety Inspectorate ("MHSI")
broad powers to, among others, close mines which are unsafe or hazardous to the health of persons and order corrective action
on health and safety matters.
There is a risk that the cost of providing measures prescribed by the MHSA and Regulations for the protections of health
and safety at mines, including complying with the health services, complying with applicable regulations, including the
Compensation for Occupational Injuries and Diseases Act, 130 of 1993 ("COIDA"), and the Occupational Diseases in Mines and
Works Act, 78 of 1973 ("ODMWA"), could increase in future, depending on changes to underlying legislation, legal claims and
the profile of our employees. This increased cost, should it transpire, could be substantial, but is currently indeterminate.
Our employees may be at risk of developing occupational health diseases. Those working underground are exposed to
some level of respirable crystalline silica and may be at risk of developing occupational lung diseases, including silicosis, a
progressive and potentially disabling lung condition resulting from prolonged inhalation of silica dust.
The Occupational Lung Disease Working Group (“Working Group”), was formed in fiscal 2014 to address issues relating
to compensation and medical care for occupational lung disease in the South African gold mining industry. The Working Group,
made up of various gold mining companies has had extensive engagements with a wide range of stakeholders, including
government, organised labour and the legal representatives of claimants.
We have been subject to numerous claims, including class actions or similar group claims relating to silicosis and other
occupational lung diseases, and could be subject to similar claims in the future. For instance, in May 2016, the High Court of
South Africa (Gauteng Division) certified a class action by current and former mine workers against gold mining companies in
South Africa, including us.
The matter was subsequently settled in May 2018. The terms of the settlement are available on our website. Accordingly,
the Tshiamiso Trust was created for purposes of administering the settlement funds. On 31 January 2020, the Working Group
commenced the payment of their quarterly administration and benefit contributions to the Tshiamiso Trust to enable the trustees
to settle benefits of eligible claimants. See Item 8: “Financial Information – Consolidated Statements and Other Financial
Information – Legal Proceedings” and "Integrated Annual Report for the 20-F 2025 – Social stewardship – Holistic health and
wellness” on pages 141 to 153 for further information. See note 25 “Other Provisions – Provision for silicosis settlement” to our
consolidated financial statements set forth beginning on page F-1.
At 30 June 2025 the provision in our statement of financial position was R261 million. We believe that this remains a
reasonable estimate of our share of the estimated cost in relation to the Working Group of the settlement of the class action
claims and related costs. The final settlement costs and related expenditure may, however, be higher than the recorded
provision depending on various factors, such as, among other things, differences in the number and profile of eligible claimants
actually compensated compared to current estimates.
Australia
Operations in the State of Queensland, where our Eva Copper Project is situated, are subject to similar duties and powers,
including under the following laws and regulations: the MQSH Act (as recently amended by the RSHLA Act) and the MQSH
Regulations.
We are not aware of any occupational health claims, including class actions or similar group claims, presently being made
in relation to any of our operations in Queensland, but as a mining operator there is a risk we could be subject to such claims in
the future. There is also a risk that the cost of providing health services, complying with applicable regulations, and
implementing various programs could increase in future, depending on changes to underlying legislation, legal claims and the
profile of our employees. This increased cost, should it transpire, could be substantial, but is currently indeterminate.
Papua New Guinea
Operations in PNG are subject to similar duties and powers, including under the following laws and regulations: the PNG
Mining (Safety) Act, the PNG Mining Safety Regulation 1935 (updated in 2006), the PNG Mining Act, the PNG Industrial Safety,
Health and Welfare Act 1961, the PNG Industrial Safety, Health and Welfare Regulations 1965 and the PNG Environment Act.
In June 2021, the PNG Ministry of Mining released the draft Mine & Works (Safety & Health) Bill 2021 for industry and
public consideration, which process is presently still under way. If enacted, the Bill will repeal and replace the PNG Mining
(Safety) Act.
We are not aware of any occupational health claims, including class actions or similar group claims, presently being made
in relation to any of our operations in PNG, but as a mining operator there is a risk we could be subject to such claims in the
future. There is also a risk that the cost of providing health services, complying with applicable regulations, and implementing
various programs could increase in future, depending on changes to underlying legislation, legal claims and the profile of our
employees. This increased cost, should it transpire, could be substantial, but is currently indeterminate.
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If we or any of our subsidiaries in South Africa, Australia or PNG were to face a significant number of additional such
claims and the claims were suitably established against it, the payments of compensation to the claimants could have a material
adverse effect on our results of operations and financial condition. In addition, we may incur significant additional costs,
including costs relating to the payment of fees, levies or other contributions in respect of compensatory or other funds
established (if any), and expenditures arising out of our efforts to resolve any such claims or other potential actions, any of which
could have a material adverse effect on our results of operations and financial condition.
Our operations are subject to water use and other regulatory licenses, which could impose significant compliance
costs and operational constraints
South Africa
Under the South African National Water Act, 36 of 1998 (“NWA”) a person may only undertake a “water use” subject to a
water use license, a general authorisation or in terms of a prior existing water use, such as a water permit issued under the
NWA’s predecessor, Water Act, 54 of 1954 (“Water Act”). Persons undertaking water use under a general authorisation or prior
existing water use must register this use with the Department of Water and Sanitation ("DWS").
Our South African operations are predominantly regulated under water permits issued pursuant to the Water Act.
Notwithstanding this, we have elected to convert all prior existing water uses into water use licenses under the NWA to ensure
these operations are carried out in accordance with current best practice and water quality standards. Submissions were made
as early as 2003 and we have been working closely with the regional directors in the review process.
Some operations have received draft licenses for review and comment before finalisation by the regional directors at the
DWS. Kusasalethu, Moab, Mponeng, Mine Waste Solutions, Kareerand and Kalgold received their final water use licenses.
These licenses, however, contain conditions that are impossible to meet and, as a result, we have applied to amend the relevant
conditions.
An appeal has been filed by a third party against the Mponeng water use license, more than two years after the license
was granted. We are of the view that the appellant does not have the necessary standing to bring such an appeal and that the
appeal is vexatious. While the appeal automatically suspends our water use licenses, the suspension has been uplifted by the
Minister of Water and Sanitation. The appeal are set to be heard in October 2025 and in the meantime we are in discussions
regarding a possible settlement.
When future water licenses are issued, we may be required to implement alternate water management measures that
result in significant cost implications. We intend to work collaboratively with the regional departments and catchment
management agencies to reach mutually sustainable outcomes. Failure to obtain licenses on favourable terms could have a
material adverse effect on our results of operations and financial condition.
Failing to comply with the conditions of a water use license may result in the competent authority issuing a compliance
notice or directive instructing us to take measures to correct the non-compliance and, in some instances, to cease operations
pending the resolution of the non-compliance. Failing to comply with a water use license is an offence that may result in
prosecution. Upon conviction, the court may impose fines, damages, director and employee liability and imprisonment, which
could have a material adverse effect on our business, operating results and financial condition
Additionally, the NWA imposes a duty of care on us to take reasonable measures to prevent pollution or contamination of
water resources. The nature and extent of the reasonable measures is determined on a case by case basis. If we fail to
implement reasonable measures the competent authority may issue a directive instructing us to implement certain measures
within a prescribed period. Failing to comply with a directive is an offence and may result in prosecution and the penalties
contemplated above. Alternatively, the competent authority could implement the necessary measures using its own methods and
resources, and recoup the costs from us.
Any such environmental levy could have a material effect on our business, operating results and financial condition. In addition,
the occurrence of Acid Mine Drainage at any of our mines could affect our ability to comply with our water use license
requirements.
Obligations to pump and treat extraneous water must be addressed with our final closure plans. We are responsible for
these liabilities until a closure certificate is issued pursuant to the MPRDA and potentially thereafter under the NEMA. This
liability is discussed in more details in Item 4: “Information on the Company – Business Overview – Regulation – Law and
Regulations Pertaining to Environmental Protections in South Africa – NEMA”. Refer to "– Risks associated with pumping water
inflows from closed mines adjacent to our operations, including related closure liabilities, could adversely affect our operational
results".
Australia
Under the conditions of the mining leases for the Eva Copper Project, Eva Copper Mine Pty Limited is permitted to
construct groundwater bores within the area subject to the mining leases.
To authorise the take of groundwater from a bore/borefield, a water license is required only if the bore is in an area where
groundwater is managed (i.e. within an identified groundwater unit of a relevant water plan). This has been confirmed by the
Queensland Government as not applicable to the Eva Copper target groundwater sources.
Should we breach any obligations in complying with the provisions of any permit or license or any laws and regulations
under which they were issued, our permit or license could be suspended or cancelled, or we could be subject to fines or other
sanction. Any such suspension, cancellation or sanction could have a material adverse effect on our results of operations and
financial condition.
Papua New Guinea
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In PNG, a single, project-comprehensive EP is issued by the Managing Director of CEPA under the provisions of the PNG
Environment Act. The permit includes provisions for both water extraction and treated waste water discharge. An annual
administration fee is payable for this permit.
Should we breach any obligations in complying with the provisions of our EP or the PNG Environment Act, our permit could
be suspended or cancelled, or we could be subject to fines or other sanction. Any such suspension, cancellation or sanction
could have a material adverse effect on our results of operations and financial condition.
See "Integrated Annual Report for the 20-F 2025 – Environment stewardship – Water stewardship” on pages 105 to 109.
Compliance with tailings management requirements and standards, and potential liabilities in the event of a failure to
timely comply or an incident involving a TSF, could adversely impact our financial condition, our operational results
and our reputation
Mining companies face inherent risks in their management of uneconomical milled ore residue and water, known as
tailings, which includes the operation of TSFs and other tailings disposal systems, like DSTP. Tailings storage facilities are
engineered structures built for the containment of tailings, and DSTP facilities are engineered pipeline and mixing infrastructure
for the placement of tailings in the sea.
We presently operate only TSFs, but DSTP is the approved tailings management system for the proposed Wafi-Golpu
Project. The proposed use of DSTP facilities at the Wafi-Golpu Project may expose us to reputational risk or litigation by way of
class action or individual claims, which (if successful) could have a material adverse impact on the Wafi-Golpu Project.
In South Africa, TSFs are subject to stringent regulatory oversight due to their potential environmental and safety risks. The
DWS mandates that all TSFs meeting specific criteria (such as a minimum height of five meters and a storage capacity
exceeding 50,000 cubic meters) be registered as "dams with a safety risk" under the NWA. Failure to comply with registration
requirements can lead to legal and operational consequences which could have a material adverse effect on our business,
operating results and financial condition.
Additionally, the DMPR enforces the South African Code of Practice for Mine Residue Deposits, or SANS 10286, which
outlines best practices for the design, operation and closure of TSFs. This code emphasises principles such as continual
management, minimisation of waste and the precautionary approach to mitigate risks associated with TSFs.
Recent incidents including the 2022 Jagersfontein tailings dam collapse (which is not a project owned or operated by
Harmony) have underscored the critical importance of robust TSF management. In response, the DWS has intensified its
regulatory efforts, conducting inspections and collaborating with the DMPR to ensure compliance and prevent future disasters.
Tailings dam failures at various operations globally have prompted increased regulatory scrutiny across the industry. This may
result in amended or new environmental, social, health and safety legislative frameworks. In addition, changes in laws and
regulations may impose more stringent conditions in connection with the construction of tailings dams. Further, we may see
changes in the permitting process of projects, implementation of financial assurance requirements, and increased criminal and
civil liability for companies, officers and contractors.
The use of TSFs exposes us to certain risks, including the failure of a tailings dam due to events such as high rainfall,
overtopping of the dam, piping or seepage failures. The potential occurrence of a dam failure at one of our tailings storage
facilities could lead to the loss of human life and extensive property and environmental damage.
A failure of a TSF would lead to investigations and has the potential to result in prosecutions and/or legal proceedings for
significant amounts of fines and damages. Overall, the failure of a TSF could lead to the need for a large expenditure on
contingencies and on recovering the regions and people affected, extensive and permanent environmental damage and the
payment of penalties, fines or other money damages. The occurrence of any of such risks could have a material adverse effect
on our business, operating results and financial condition.
See "Integrated Annual Report for the 20-F 2025 – Environment stewardship – Tailings management” on pages 110 to 114
for further detail.
We may have exposure to rehabilitate potential groundwater and land pollution, which may include salination, and
radiation contamination that may exist where we have operated or continue to operate; implementation of the financial
provision regulations, 2015 may require us to include provision in our financial statements for rehabilitation
Due to the interconnected nature of mining operations at Doornkop, Kusasalethu, Mponeng, MWS and Moab Khotsong,
any proposed solution for potential flooding and decant risk posed by deep groundwater needs to comprise a regional solution
supported by all mines located in the goldfields and the government in the event of legacy issues. As a result, the DMPR and
affected mining companies are involved in developing a regional mine closure strategy. In view of the status of the Financial
Provision Regulations, 2015, no reliable estimate can be made for any possible obligations or liabilities, which could be material
and have an adverse impact on our financial condition.
See “—Risks Related to ESG - We are subject to extensive environmental regulations in the countries in which we
operate, and compliance costs, regulatory changes, and potential non-compliance could have a material adverse effect on our
business, operating results and financial condition”.
We are implementing the following steps to ensure that funds are available to top up our financial provision, if necessary:
•facilitating concurrent rehabilitation;
•re-purposing infrastructure and mining affected land; and
•accelerating mine closure rehabilitation where operations have reached the end of its geological life.
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Currently, no provision for any potential liability has been made in our financial statements under the Financial Provision
Regulations, 2015. If provision needs to be made, and is substantial, this could have a material adverse effect on our business,
operating results and financial condition.
Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our
compliance policies and increases our costs of compliance
Laws, regulations and standards relating to accounting, corporate governance and public disclosure, “conflict minerals”
and “responsible” gold, SEC regulations and other listing regulations applicable to us are subject to change and can create
uncertainty for companies like us. New or changed laws, regulations, codes and standards could lack specificity or be subject to
varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and
governing bodies. This could result in continuing uncertainty on compliance matters and higher costs of compliance as a result
of ongoing revisions to such governance standards.
We are committed to maintaining high standards of corporate governance and public disclosure, and our efforts to comply
with evolving laws, regulations, codes and standards in this regard have resulted in, and are likely to continue to result in,
increased general and administrative expenses, which could have a material adverse effect on our business, operating results
and financial condition.
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Risks Related to Our Corporate and Financing Structure and Strategy
Our inability to maintain effective disclosure controls and procedures, and an effective system of internal control over
financial reporting may have an adverse effect on investors’ confidence in the reliability of our financial statements and
other disclosures
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with IFRS as
issued by the IASB. Disclosure controls and procedures are designed to ensure that information required to be disclosed by a
company in reports that it files or submits under the Exchange Act, is recorded, processed, summarised and reported within the
time periods specified in the rules and forms of the SEC. We have invested in resources to manage the documentation and
assessment of our system of disclosure controls and our internal control over financial reporting. However, a control system, no
matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of
financial reporting, financial statement preparation and other disclosures.
In connection with the preparation of our consolidated financial statements for the year ended 30 June 2025, management
identified material weaknesses in internal control over financial reporting. While these deficiencies did not result in any identified
material misstatements, they represent gaps in our control environment and aggregate to multiple material weaknesses.
These material weaknesses will not be considered remediated until these actions are sufficiently tested and concluded to be
effective. If we are unable to successfully remediate the identified material weaknesses, or experience additional material
weaknesses in the future, investors may lose confidence in the reliability of our financial statements, and/or we could become
subject to SEC investigation, enforcement action, civil monetary penalties, or other sanctions, which could result in significant
costs, reputational damage, and adversely affect our business, share price, and ability to access capital markets. See Item 15:
“Controls and Procedures”.
We may experience problems in identifying, financing and managing new acquisitions or other business combination
transactions and integrating them with our existing operations; we may not have full management control over future
joint venture projects
In order to maintain or expand our operations and reserve base, we have sought, and may continue to seek to enter into
joint ventures or other business combination transactions or to make acquisitions of selected precious metal producing
companies or assets. For example, with effect on 1 October 2020, acquired the remainder of AngloGold’s South African
business, including the Mponeng mine and MWS, in the Mponeng Acquisition. In December 2022, Harmony acquired its Eva
Copper Project in Queensland, Australia. In addition Harmony announced the acquisition of MAC on 27 May 2025, which
became effective on 24 October 2025.
Acquiring new mining operations or entering into other business combination transactions involves a number of risks
including:
•our ability to identify appropriate assets for acquisition and/or to negotiate an acquisition or combination on favourable
terms;
•obtaining the financing necessary to complete future acquisitions;
•difficulties in assimilating the operations of the acquired business;
•the changing regulatory environment as it relates to the Mining Charter (as defined below) and the general policy
uncertainty in South Africa;
•difficulties in maintaining our financial and strategic focus while integrating the acquired business;
•problems in implementing uniform quality, standards, controls, procedures and policies;
•management capacity, and skills to supplement that capacity, to integrate new assets and operations;
•increasing pressures on existing management to oversee an expanding company; and
•to the extent we acquire mining operations or enter into another business combination transaction outside South Africa,
Australia or PNG, encountering difficulties relating to operating in countries in which we have not previously operated.
Any such acquisition or joint venture may change the scale of our business and operations and may expose us to new
geographic, geological, political, social, operating, financial, legal, regulatory and contractual risks. Our ability to make
successful acquisitions and any difficulties or time delays in achieving successful integration of any of such acquisitions could
have a material adverse effect on our business, operating results and financial condition.
In addition, to the extent that we participate in the development of a project through a joint venture or other multi-party
commercial structure, there could be disagreements, legal or otherwise or divergent interests or goals among the parties, which
could jeopardize the success of the project, particularly if we do not have full management control over the joint venture. There
can be no assurance that any joint venture will achieve the results intended and, as such, any joint venture could have a
material adverse effect on our revenues, cash and other operating costs. See Item 5. “Operating and Financial Review and
Prospects - Liquidity and Capital Resources - Cash flows from investing activities”.
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Certain factors may affect our ability to support the carrying value of our property, plant and equipment, and other
assets on our balance sheet, resulting in impairments
We review and test the carrying value of our assets when events or changes in circumstances suggest that this amount
may not be recoverable and impairments may be recorded as a result of testing performed.
Our market capitalisation on any reporting date is calculated on the basis of the price of our shares and ADSs on that date.
Our shares and ADSs may trade in a wide range through the fiscal year depending on the changes in the market, including
trader sentiment on various factors including gold price. Therefore, there may be times where our market capitalisation is greater
than the value of our net assets, or “book value”, and other times when our market capitalisation is less than our book value.
Where our market capitalisation is less than our net asset or book value, this could indicate a potential impairment and we may
be required to record an impairment charge in the relevant period.
At least on an annual basis for goodwill, and when there are indications that impairment of property, plant and equipment
and other non-financial assets may have occurred, estimates of expected future cash flows for each group of assets are
prepared in order to determine the recoverable amounts of each group of assets. These estimates are prepared at the lowest
level at which identifiable cash flows are considered as being independent of the cash flows of other mining assets and
liabilities. Expected future cash flows are inherently uncertain, and could materially change over time. Such cash flows are
significantly affected by reserve and production estimates, together with economic factors such as spot and forward gold prices,
discount rates, currency exchange rates, estimates of costs to produce reserves and future capital expenditures.
As at 30 June 2025, we had substantial amounts of property, plant and equipment and other assets on our consolidated
balance sheet. The impairment charges relating to property, plant and equipment, and other assets recorded in fiscal 2024 was
R2.8 billion and no impairment was recorded for fiscal 2025. If management is required to recognise impairment charges in the
future, this could have a material adverse effect on our results of operations and financial condition.
Our ability to service our debt will depend on our future financial performance and other factors
Our ability to service our debt and maintain compliance with financial covenants depends on our financial performance,
which in turn will be affected by our operating performance as well as by financial and other factors, and in particular the gold
price, certain of which are beyond our control. Various financial and other factors may result in an increase in our indebtedness,
which could adversely affect us in several respects, including:
•limiting our ability to access the capital markets;
•hindering our flexibility to plan for or react to changing market, industry or economic conditions;
•limiting the amount of cash flow available for future operations, acquisitions, dividends, or other uses, making us more
vulnerable to economic or industry downturns, including interest rate increases;
•increasing the risk that we will need to sell assets, possibly on unfavourable terms, to meet payment obligations; or
•increasing the risk that we may not meet the financial covenants contained in our debt agreements or timely make all
required debt payments.
The occurrence of any of these events could adversely affect our results of operations and our financial condition. See “ –
The impact from, and measures taken to address infectious and communicable diseases, such as HIV/AIDS, malaria and
tuberculosis, pose risks to us in terms of productivity and costs and may adversely affect our people, and may impact our
business continuity, operating results, cash flows and financial condition.''
Our ability to service our debt also depends on the amount of our indebtedness.
In May 2022 we entered into a US$400 million sustainability-linked syndicated term and revolving credit facility, a
R2.5 billion sustainability-linked revolving credit facility, as well as a R1.5 billion Green term loan. At 30 June 2025,
US$100 million was drawn against the US$ facility and R176 million was drawn against the Rand facilities. In June 2025 we
entered into a Bridge Facility Agreement to finance the acquisition and related costs for a total amount of US$1.25 billion. At 30
June 2025 no amounts has been drawn against this facility. See Item 5: “Operating and Financial Review and Prospects -
Liquidity and Capital Resources - Cash flows from financing activities” and “- Outstanding Credit Facilities and Other
Borrowings”.
In the near term, we expect to manage our liquidity needs from cash generated by our operations, cash on hand,
committed and unutilised facilities, as well as additional funding opportunities. However, if our cost of debt were to increase or if
we were to encounter difficulties in obtaining financing in the future, our sources of funding may not match our financing needs,
which could have a material adverse effect on our business, operating results and financial condition.
We are subject to the imposition of various regulatory costs, such as mining taxes and royalties, changes to which
may have a material adverse effect on our operations and profits; our operations and financial condition could also be
adversely affected by policies and legislation related to greater state intervention in the mining sector and potentially
the expropriation of mining assets without compensation
With increasing resource nationalism in recent years, governments, communities, non-government organisations and trade
unions in several jurisdictions have sought and, in some cases, have imposed greater participatory imposts on the mining
industry. In South Africa and PNG, draft legislation has been proposed that envisages greater state intervention in the mining
industry, including the revision of existing royalties, the imposition of new taxes, an increase in the government’s holdings in
mining companies and (in South Africa) potentially the expropriation of mining assets without compensation. Such imposts,
whether in the form of taxes, royalties and levies, interference in project management, mandatory social investment
requirements, local content requirements or creeping expropriation, are an increasing feature of the global mining industry and
could materially adversely affect our business, operating results and financial condition.
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In addition, additional financial provision may be required in the future for rehabilitation purposes with restrictions on when
this money may be accessed for rehabilitation. Concurrent rehabilitation needs to be funded by operational budgets without any
recourse to the rehabilitation funds. The Carbon Tax Act provides for several allowances aimed at reducing the overall tax
liability. These allowances are expected to be reduced overtime meaning that if operational measures are not implemented to
reduce GHG emissions, the carbon tax obligations will be higher. These changes in regulation may have a negative impact on
future cash flows and the viability of certain operations resulting from increased cost pressures. See Item 4 "Business Overview
- Land expropriation", "- Base erosion and profit shifting" and "- Renewable energy".
Since 2009, the mining regime in PNG has been the subject of a comprehensive ongoing review involving various PNG
Government agencies. During this time, several draft revisions of the PNG Mining Act have been released for industry and
public its comment - most notably in 2018, 2020 and February 2025 (the most recent draft, the “PNG Draft Mining Bill 2025”).
The PNG Draft Mining Bill 2025 proposes substantial reforms, including empowering PNG to acquire up to 30% equity (with
deferred payments) in mining projects, adjusting royalties to 5% with state equity or 10% without and expanding compensation
mechanisms and environmental protections (e.g. banning riverine tailings requiring stronger mine-closure planning and financial
provisioning). If enacted and applied to our operations and projects in PNG, these revisions could have a material adverse effect
on our business, operating results and financial condition. We continue to engage with the PNG Government and relevant
regulators on these matters, indirectly through the offices of PNG Chamber of Resources and Energy ("PNG CORE"), and
directly with the PNG Mineral Resources Authority ("PNG MRA"), the CEPA and the DMPGM.
PNG’s National Parliament passed the Income Tax Act 2025 (“PNG Income Tax Act”) on 20 March 2025. To become law,
the PNG Income Tax Act must now be certified by the Speaker of Parliament and gazetted; certification and gazettal are
expected later in 2025, ahead of its planned commencement on 1 January 2026. The PNG Income Tax Act does not include
specific provisions for mining capital or exploration expenditure, but provides a transitional carve-out for legacy mining-specific
rules, including special mining capital and exploration expenses. Without clear guidance at this stage, we are uncertain of the
potential future impacts these changes to the regulation may have on taxes for our PNG operations.
The effect of the proposals, measures and developments described above, as well as the imposition of additional
restrictions, obligations, operational costs, taxes or royalty payments, could have a material adverse effect on Harmony’s
business, operating results and financial condition.
As we have a significant number of shares that may be issued in terms of the employee share schemes, our ordinary
shares are subject to dilution
We have a Deferred Share Plan as part of our Total Incentive Plan that came into effect in 2020. Our shareholders have
authorised up to 25,000,000 shares of the issued share capital to be used for this plan. A new Employee share ownership plan
("ESOP'') was implemented in 2024 and shares have been issued.
As a result, shareholders’ equity interests in us are subject to dilution to the extent of the potential future exercises of the
options through these share plans.
The continued status of South Africa’s credit rating as non-investment grade, as well as the grey-listing of South Africa
by the FATF, may have an adverse effect on our ability to secure financing on favourable terms
Adverse credit ratings deter some investors, threatening our ability to create and protect value in the long term, and
affecting our market capitalisation. Over the past several years, the slowing economy, rising sovereign debt, escalating labour
disputes and the structural challenges facing the mining industry and other sectors have resulted in the downgrading of South
Africa’s sovereign credit ratings.
Currently, South Africa’s sovereign credit is rated as non-investment grade: Fitch has assigned South Africa a sovereign
credit rating of BB-, Moody’s has assigned South Africa a sovereign credit rating of Ba2 and S&P has assigned South Africa a
sovereign credit rating of BB-. Previously,
•on 13 September 2024, Fitch affirmed South Africa’s sovereign credit rating as BB- and maintained the outlook as stable;
•on 4 December 2024, Moody's affirmed South Africa's sovereign credit rating as Ba2 and maintained the outlook to stable;
and
•on 16 May 2025, S&P affirmed South Africa’s sovereign credit rating as BB- and upgraded the outlook to positive.
The continued status of South Africa’s credit rating as non-investment grade and any downgrading by any of these
agencies may adversely affect our business, operating results and financial condition by making it more difficult to obtain
external financing or could result in any such financing being available only at greater cost or on more restrictive terms than
might otherwise be available.
Australia’s credit rating outlook was affirmed by S&P as stable on 13 February 2024 with long-term foreign and local
currency sovereign credit ratings of AAA, and PNG’s credit rating outlook was affirmed by S&P as stable on 27 June 2025 with
long-term foreign (B-) and local currency (B) sovereign credit ratings. While impact and risk is currently primarily driven by the
South Africa’s sovereign risk rating, with the acquisition of MAC and once the Eva Copper Project and the Wafi-Golpu Project
are completed and operational, management anticipations that reliance and dependencies on South Africa’s sovereign credit
ratings may change.
Throughout our fiscal year ended 30 June 2025, South Africa was on the FATF greylist (placed February 2023), subjecting
the country to enhanced monitoring due to strategic deficiencies in its anti-money laundering and counter-financing of terrorism
("AML/CFT") regime. This created increased compliance costs, potential restrictions on cross-border transactions, and
reputational concerns that affected investor confidence.
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On 24 October 2025, subsequent to our fiscal year end, South Africa successfully exited the greylist after completing all
required remediation actions. This is expected to reduce elevated risk perceptions and improve access to international capital
markets.
However, residual risks remain. South Africa faces a new FATF mutual evaluation beginning in 2026, and failure to
maintain the improvements achieved could result in re-greylisting. All domestic AML/CFT compliance obligations remain in force,
and sustained effectiveness must be demonstrated through ongoing investigations, prosecutions, and institutional strengthening.
Any future re-greylisting or perceived backsliding in AML/CFT effectiveness could adversely affect our business, operating
results, and financial condition.
We may not pay dividends or make similar payments to our shareholders in the future
Our dividend policy is to pay cash dividends only if funds are available for that purpose; specifically our policy is set at 20%
of net free cash subject to future major capital expenditure and meeting solvency and liquidity requirements as well as current
banking covenants. Whether funds are available depends on a variety of factors, including the amount of cash available, our
capital expenditures and other current or future anticipated cash requirements existing at the time. Under South African law, we
are only entitled to pay a dividend or similar payment to shareholders if we meet the solvency and liquidity tests set out in the
Companies Act, 71 of 2008 (as amended) including its Regulations (the “Companies Act”), and our current Memorandum of
Incorporation. Cash dividends or other similar payments may not be paid in the future. It should be noted that there is currently a
20% withholding tax on dividends declared by South African resident companies to non-resident shareholders or non-resident
ADS holders.
As dividends are considered by investors as an important investment criteria and the importance of external investment for
the continued stability of the company and potential future cash flows, the ability of Harmony to pay dividends may adversely
affect future investment in the company.
In addition, our foreign shareholders face investment risk from currency exchange rate fluctuations affecting the market
value of any dividends or distributions paid by us.
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Market Risks
The profitability of our operations, and cash flows generated by those operations, are affected by changes in the price
of gold and other metals; a fall in the gold price below our cash cost of production and capital expenditure required to
maintain production for any sustained period may lead to losses and require us to curtail or suspend certain
operations
Substantially all of our revenues come from the sale of gold. Historically, the market price for gold has fluctuated widely
and has been affected by numerous factors, over which we have no control, including:
•demand for gold for industrial uses, jewellery and investment;
•international or regional social, political and economic events and trends;
•strength or weakness of the US dollar (the currency in which gold prices generally are quoted) and of other currencies;
•monetary policies announced or implemented by central banks, including the US Federal Reserve;
•financial market expectations on the rate of inflation;
•changes in the supply of gold from production, divestment, scrap and hedging;
•interest rates;
•speculative activities;
•gold hedging or de-hedging by gold producers;
•actual or expected purchases and sales of gold bullion held by central banks or other large gold bullion holders or dealers;
and
•production and cost levels for gold in major gold-producing nations, such as South Africa, China, the United States and
Australia.
Refer to Item 4B: "Business Overview – Gold Price Volatility" for further detail.
While the price volatility is difficult to predict, if gold prices should fall below our cash cost of production and capital
expenditure required to sustain production and remain at these levels for any sustained period, we may record losses and be
forced to curtail or suspend some or all of our operations, which could materially adversely affect our business, operating results
and financial condition.
In addition, we would also have to assess the economic impact of low gold prices on our ability to recover any losses that
may be incurred during that period and on our ability to maintain adequate reserves. The use of lower gold prices in reserve
calculations and life-of-mine ("LOM") plans could also result in material impairments of our investment in gold mining properties
or a reduction in our reserve estimates and corresponding restatements of our reserves and increased amortisation, reclamation
and closure charges.
Fluctuations in input production prices linked to commodities may adversely affect our operational results and
financial condition
Fuel, energy, and consumables, including diesel, heavy fuel oil, chemical reagents, explosives, tires, steel, and mining
equipment, contribute a significant portion of a mining company's operating costs and capital expenditures. The prices of these
critical inputs are influenced by global commodity markets, macroeconomic conditions, and supply chain dynamics that vary
across our operations in South Africa, Papua New Guinea, and Australia.
During the financial year ended 30 June 2025 and through to the date of this filing, global commodity and energy markets
have experienced significant volatility. Energy prices have been subject to downward pressure driven by multiple factors
including weakening global demand, structural changes in energy consumption patterns, particularly from major consuming
nations, and increased supply from both traditional and emerging sources. Other mining consumables, including chemical
inputs, explosives, tires, and steel products, have experienced mixed pricing dynamics, reflecting variations in global supply
chains, transportation costs, and producer capacity utilisation.
There is considerable uncertainty regarding the medium-term trajectory of input costs. Leading forecasting agencies and
market participants maintain divergent views on future energy demand and supply dynamics, creating substantial uncertainty
regarding future price trends. Supply chain pressures, including international logistics costs and producer investment cycles,
continue to influence the pricing of mining consumables across all categories of inputs we require.
Significant upside risks to input costs persist from multiple sources. Geopolitical tensions in major producing and
consuming regions, including the Middle East and Eastern Europe, continue to pose potential supply disruption risks.
International sanctions on major commodity producers, trade policy uncertainties, and regional conflicts could disrupt supply
chains or create shipping and logistics bottlenecks. Additionally, weather-related disruptions to mining equipment supply, energy
generation capacity, and production processes across our operational jurisdictions could create localised cost pressures.
Fluctuations in the prices of fuel, energy, and consumables have a substantial impact on both our operating costs and
capital expenditure estimates. Significant and sustained increases in these input costs, driven by supply disruptions, geopolitical
events, regulatory changes, macroeconomic shifts, or producer policy changes, could materially affect project economics and
the financial viability of new mining developments, expansions, or marginal operations. Such price volatility may lead to material
changes in our overall cost structure and could have a material adverse effect on our business, operating results, cash flows,
and financial condition.
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Foreign exchange fluctuations could have a material adverse effect on our operational results and financial condition
Gold is priced throughout the world in US dollars and, as a result, our revenue is realised in US dollars, but most of our
operating costs are incurred in Rand and other non-US currencies, including the Australian dollar and Kina. From time to time,
we may implement currency hedges intended to reduce exposure to changes in the foreign currency risk, which we started
doing in fiscal 2016 and will continue as long as it remains part of our risk management policy. This hedging strategy is currently
implemented up to 25% of our estimated exposure, and our unhedged foreign exchange exposure will continue to be subject to
market fluctuations. Any significant and sustained appreciation of the Rand and other non-US currencies against the dollar will
materially reduce our Rand revenues and overall net income, which could materially adversely affect our operating results and
financial condition. See Item 11 – “Quantitative and Qualitative Disclosures about Market Risk”.
Fluctuations in the exchange rate of currencies may reduce the market value of our securities, as well as the market
value of any dividends or distributions paid by us
We have historically declared all dividends in South African Rand. As a result, exchange rate movements may have
affected the US dollar value of these dividends, as well as of any other distributions paid by the Depositary to holders of ADSs.
Furthermore, our Memorandum of Incorporation allows for dividends and distributions to be declared in any currency at the
discretion of the board of directors or the Company’s shareholders at a general meeting. If, and to the extent that, we opt to
declare dividends and distributions in US dollars, exchange rate movements will not affect the US dollar value of any dividends
or distributions. Nevertheless, the value of any dividend or distribution in Australian dollars, Kina or South African Rand will
continue to be affected. If, and to the extent that, dividends and distributions are declared in South African Rand in the future,
exchange rate movements will continue to affect the Australian dollar, Kina and US dollar value of these dividends and
distributions. This may reduce the value of the Company’s securities to investors. Additionally, the market value of our securities
as expressed in Australian dollars, Kina, US dollars and South African Rand will continue to fluctuate in part as a result of
foreign exchange fluctuations.
Rising inflation and geopolitical risks may have a material adverse effect on our business, operating results and
financial condition
Inflation in South Africa has fluctuated in a narrow band in recent years, remaining within or just outside the inflation range of
3% - 6% set by the SARB. Prolonged periods of inflation may impact our profitability by negatively impacting our fixed costs and
expenses, including raw material, transportation and labour costs. If these increased costs are not offset by an increase in gold
prices, they could have a material adverse effect on Harmony’s business, operating results and financial condition.
Geopolitical risks and conflicts around the world could further disrupt supply chains and create additional inflationary
pressures. Ongoing conflicts in Ukraine and the Middle East may cause increased inflationary pressures and could cause
general global economic conditions to deteriorate. The oil price is a driver of a number of input costs, including diesel and
transport costs, while gas prices have an impact on power costs, and other commodity prices drive direct mining and processing
costs. These inflationary pressures could also cause interest rates and the cost of borrowing to increase and could have a
material adverse effect on the financial markets and economic conditions throughout the world. The extent and duration of the
invasion, sanctions and resulting market disruptions are impossible to predict. Any inflationary impacts or disruptions caused by
the invasion or resulting sanctions may have a material adverse effect on Harmony’s business, operating results and financial
condition, and may magnify the impact of other risks described in this annual report.
Our results of operations, profits and financial condition could be adversely affected to the extent that cost inflation is not
offset by devaluation in operating currencies or an increase in the price of gold.
Investors may face liquidity risk in trading our ordinary shares on the JSE Limited
The primary listing of our ordinary shares is on the JSE Limited. Historically, the trading volumes and liquidity of shares
listed on the JSE have been low relative to other major markets. The ability of a holder to sell a substantial number of our
ordinary shares on the JSE in a timely manner, especially in a large block trade, may be restricted by this limited liquidity. See