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Green electrons are being generated as planned at Harmony Gold's 30 MW first phase of renewable energy generation, which is now fully integrated into the mining company's Tshepong South and North operations.

This was made clear by Harmony FD Boipelo Lekubo, who spoke to Mining Weekly in a Zoom interview on Wednesday, following the Johannesburg- and New York-listed company posting a superb set of half-year financials and declaring a record interim dividend. (Also watch attached Creamer Media video.)

"Phase 2 construction we expect to commence in FY25. We have the first phase of that which is 100 MW and which utilises the proceeds from our green loan.

"That will be constructed near Moab Khotsong and the second phase of that will be an additional 37 MW through a power purchase agreement.

"Phase 1 will reduce our Free State peak demand by 20% and group peak day demand by approximately 6%. So, that's about 30 MW out of 500 MW and Phase 1 and 2 together will reduce group peak demand by about 30%. So call that 167 MW out of the 500 MW.

"Repayment on the Phase 2A that we're building on balance sheet is fairly quick. We're talking around four years, so we'll definitely start to see the benefit of self-generation on the bottom line," Lekubo added.

Harmony's decarbonisation strategy is guiding operations to net-zero greenhouse-gas emissions by 2045 along a transition pathway that includes energy efficiency, portfolio re-engineering, electricity mix, improvement adaptation and decarbonisation of the transportation sector.

In the six months to December 31, record operating free cash flow rose 265% to R7 112-million driven by operational prowess and 11% higher underground recovered grades to 6.29 g/t from 5.68 g/t.

Full-year production guidance for the group remains unchanged at between 1 380 000 oz to 1 480 000 oz of gold. Full-year cost guidance also remains unchanged at less than R975 000/kg. Underground grade guidance remains unchanged at 5.60 g/t to 5.75 g/t.

Mining Weekly: There are so many highly positive aspects about Harmony's latest presentation. But what, in your view, should be the biggest overall takeaway from these stunning results?

Lekubo: The overall message of the exceptional set of results is that we've achieved what we said we would. If you look at what our strategic pillars are, we're recording improved safety performance, we've increased our underground recovered grades which have lifted margins. We've added quality ounces through Moab Khotsong and Mponeng. Consistent with our policy and growth strategy, we've declared a record interim dividend. Then from a balance sheet perspective, net debt to Ebitda is at zero and we were at a net cash position at the end of the period.

Some of the percentage increases of free cash flow were sky-high. What, in your view, is the one that deserves the most focus?

The operating free cash flows were largely driven by the higher recovered grades and, certainly, the higher average gold price that we received. The higher grade Moab Khotsong and Mponeng operations contributed around 45% to group operating cash flows and Hidden Valley on the other hand 25% of operating free cash flow. So, our new acquisitions and what we have in Hidden Valley were the main drivers behind that performance.

Is your gold-price hedging policy bearing fruit?

It's definitely bearing fruit. As per policy, we hedge to lock in margins. We do not speculate with the hedge book. As you all know, commodity prices are cyclical and we believe that, if we're consistent with our methodology, it will deliver the desired outcome. Eighty per cent of our production is unhedged, which offers good upside with increases in commodity prices. In addition, our hedge is done over shorter periods on a rolling basis, so it's working quite effectively as a financial risk management tool and we believe that we're well protected by the hedge should gold prices...