SecProbe.io

CORRESP
1
filename1.htm

CORRESP LETTER

May 15, 2008

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

100 F STREET, NE

WASHINGTON, D.C.

20549

BY EDGAR AND MESSENGER

    FOR ATTENTION:

    H ROGER SCHWALL, ASSISTANT DIRECTOR

DIVISION OF CORPORATION FINANCE

Dear Sir,

REPLY TO REVIEW LETTER DATED MARCH 5, 2008

Reference is made to the Staff’s comment letter dated April 25, 2008 in respect of the Harmony Gold
Mining Company Limited (the “Company”) Form 20-F for the year ended June 30, 2007. Set forth below
in detail are the responses to the Staff’s comments, which have been provided in each case
following the text of the comment in the Staff letter:

Operating and Financial Review and Prospects, page 112

    1.

    We note your response to our prior comment 3 and reissue it in part.

    •

    In regard to your response to the first bullet, we note that you state that you are
unable to provide a specific amount of the estimated costs related to HDSA
participation. Please confirm that in all future filings you will disclose these
costs when known, if material.

    Response: The Company acknowledges the Staff’s comment and confirms that it will
disclose costs related to HDSA participation when known and if material in future
filings.

    Directors:

    PT Motsepe* (Chairman), GP Briggs (Chief Executive), F Abbott (Interim Financial
Director), JA Chissano*#, FFT De Buck*, Dr CM Diarra*##, KV Dicks*, Dr DS
Lushaba*, C Markus*, M Motloba*, CML Savage*, AJ Wilkens*
*Non-Executive;  #Mozambican; *##US/Mali Citizen

    Secretary:

    MP van der Walt

Registration Number: 1950/038232/06

    •

    In regard to your response to the fourth bullet, please discuss the impact on your
operations and operating results, both if CONOPS works at a mine, and if it does not
and has to be abandoned.

    Response: We have a CONOPS task team comprised of a mining engineer, 2 production
engineers, a financial manager and a human resource manager, which studies the
success of CONOPS at each mine and reports to both Chief Operating Officers. After
the CONOPS task team completes its due diligence study at each operation, it makes a
determination as to the success of the CONOPS operation. Overall, it was concluded
that CONOPS was unsuccessful at most of the Harmony operations where it was
implemented. The level of success in each case was measured against criteria that
included the percentage production increase, if any, the percentage decrease in unit
cost (R/ton) and the safety record at the mine. The success rate of achieving the
original envisaged benefits from CONOPS varied between the different operations. Based
on the performance before and after the implementation of CONOPS, a decision was
taken to either continue or discontinue CONOPS at an operation. In cases where CONOPS
was abandoned, the operations generally continued on the same or marginally lower
production levels, while total working costs normally decreased as a result of lower
labour cost due to withdrawal from paying CONOPS allowances over a three month period
and in some cases the reduction of labour. At operations where the decision was taken
to abandon CONOPS because of production and unit cost reasons, profitability has
improved.

    •

    In regard to your response to the fifth bullet, discuss the impact declining
workforce productivity will have on your operating results.

    Response: The decline in productivity has been one of the challenges facing the SA
gold industry for a number of years. This decline of productivity in Harmony mainly
came as a result of an aging workforce, the health of the workforce that has been
negatively impacted by HIV/Aids, increased working distances from shafts and aging
infrastructure. Harmony reacted to these challenges through various initiatives
including the “Healthy workforce” drive, the VCT campaign (voluntary testing and
counselling), upgrade of rail bound equipment and track work and other improvement
projects. Although these initiatives are in place to mitigate the effect of a
declining labour productivity, there may continue to be a negative impact on
production and unit costs. The impact will be reported by the company, if material.

    •

    In regard to your response to the sixth bullet, discuss in the amended 20-F the
industry concerns over the reliability of the electricity supply and how this may
impact your results in the future. Confirm that in all future filings you will
estimate how long you expect to receive only 90% of your electricity needs, and
discuss the impact the resulting decline in production will have on your operations
and operating results.

    Response: Harmony respectfully submits that it does not operate with only 90% of its
required power, but at 90% of what was previously used. Harmony therefore operates at
100% of its revised electricity needs. We have had consistent electricity supply since
the beginning of February 2008. Gold production will only be negatively affected at
two of our mines, the Evander 7 shaft and Bambanani mine. At both these mines it was
decided to stop production from low grade production areas due to low profitability
and also due to high electricity consumption. The closing of these areas assisted to
reduce electricity consumption to 90%. Moreover, efficiency projects at other
operations further assisted in improving electricity consumption and shifting load to
off peak periods.

    Harmony applied to Eskom to give it clarity on the amount of electricity available to
Harmony in the future mainly in respect of project operations and future new projects.
Discussions remain ongoing with Eskom in order to reach an

2

    agreement. Harmony is also investigating co-generating projects to ensure guaranteed
supply of electricity to its mines in the future.

Engineering Comments

    2.

    We note your response to our comment 11 in which you state that the reserve estimates
for the Golpu and Evander South projects are supported by nearby mining operations,
engineering studies, and other evaluations. Supplementally provide the Competent Persons
Report (CPR) and the pre-feasibility study for the Golpu project.

    To minimize the transfer of paper, please provide the requested information on a CD,
formatted as Adobe PDF files and provide the name and phone number for a technical
person our engineer may call, if he has technical questions about your reserves.

    In the event your company desires the return of the supplemental material, please make
a written request with the letter of transmittal and include a pre-paid, pre-addressed
shipping label to facilitate the return of the supplemental information. Please note
that you may request the return of this information pursuant to the provisions of Rule
418(b).

      Response: Enclosed is a CD containing the CPR and pre-feasibility study for the Golpu
project. Should you have any technical questions, please contact:

    Mr Greg Job

Phone: +61 7 3320 3781 (Direct)

Fax: +61 7 3320 3740

Mobile: +61 417 172 387

Email greg.job@harmonyseasia.com

    Kindly return the CD in the shipping label enclosed to:

    Ms Julie Lasso

Hogan & Hartson

Juxon House 100, St Paul’s Churchyard, London EC4M 8BU

Yours faithfully

/s/ F
Abbott

F Abbott

Chief Financial Officer

    Cc:

    K Stertzel

    J Davis

    K Schuler

    D Levy

3