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Disharmony at Hampton

BERNARD Swanepoel, chief executive of South Africa’s Harmony Gold Mining group, is arriving in Perth next week. And he is bringing his cheque book.

Harmony already has a $56 million takeover bid on the table for New Hampton Goldfields. There are few company doorbells around Kalgoorlie that Swanepoel has not rung. He makes no secret of the fact that he wants to launch more takeovers here, and he is a man in a hurry.

Harmony has been gobbling up other gold miners at the rate of three a year for five years. Swanepoel says there are too many players in a tough game, with 23 companies producing 40 per cent of the world’s gold. He declares the gold price would have to climb to US$350 an ounce to justify the development of new mines, and says consolidation is the only hope for the industry.

New Hampton produces more than 300,000 ounces a year from its Jubilee and Big Bell operations, both of which it acquired from Normandy in recent years. It ranks among the top 10 Australia gold miners.

If the New Hampton deal goes through, Harmonys’s gold output would rise to nearly 3 million ounces a year, making it the fifth largest producer in the world.

Currently there is an unusual boardroom split over the matter. A majority of the New Harmony directors, including the founder Nick Lam, says the revised bid of $0.275 should be accepted. But CEO Ed Eshuys believes it is inadequate and should be rejected.

Perhaps this can all be sorted out over a few beers in one of the Burswood bars at the April 11th Australian Gold Conference, where Swanepoel is a keynote speaker.

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