Risk management JSE: R198.61 +3.66% NYSE:$10.20 +4.40% GOLD:$2 754/oz +0.36% GOLD:R1 635 556/kg +0.2% USD:ZARR18.47 -0.16% At 15:44pm, 22 Jan 2025 Home » Sustainability » Governance » Risk management Our risk management approach informs our business strategy and related objectives. To achieve our goals, it is vital to identify and understand the factors that could limit our ability to deliver on our strategy. Equally, we need to understand which factors present opportunities. Summary of the risk management process Oversight of risk governance process Board The Board is ultimately responsible for risk management aligned with the King IV requirements. The board oversees the risk management programme and our top strategic, operational and safety-specific risks. It also monitors risk treatment actions and the effectiveness of the actions in addressing significant risks, guided by our risk appetite and tolerance framework. Oversight of the risk governance process was delegated to the audit and risk committee and a quarterly report is sent to the technical risk committee and the board. Executive management Quarterly review of strategic risk profile to: Assess its completeness Consider external and internal factors that could lead to new/emerging risks and opportunities Review the likelihood and impact/consequence of existing risks and assess any new or emerging risks and opportunities to determine residual ratings Review the completeness, effectiveness and/or relevance of mitigating actions and evaluate resulting residual risk ranking Implementation and daily management Executive committee Executive managers are accountable for effective risk management in their areas of responsibility, including functional and operational risk management, emergency response structures, incident command systems and situational awareness capabilities. Governance and risk committee The governance and risk committee oversees governance, risk and regulatory compliance, including the responsibility for executing on business principles, policies, procedures and priorities. ERM team This team is responsible for shaping, safeguarding and specialised servicing of risk management across Harmony by implementing and maintaining an integrated risk and resilience management framework, methodology and system that supports Harmony’s strategic pillars. Safety We have a four-layered, risk-based approach to manage safety in South Africa and Papua New Guinea, led by our safety team and the Harmony risk management team. Refer to Safety. Operations Each operation maintains, updates and regularly reviews its risk register. These are formally reviewed weekly by regional general managers, country-based executive and management teams. For detailed information on our approach to risk, kindly refer to the Integrated Report 2024 Determining our most significant risks and opportunities The ERM team, senior management and the executive steering committee properly assessed the global risks and the risks that Harmony is exposed to in its operating countries. We confirm that the risks in Harmony’s risk landscape are valid, accurate, complete and evaluated properly. It is important not to look at each risk in isolation. Designing and implementing risk response strategies to address these interacting risks will require trade-offs that address some risks and exacerbate others. Top strategic risks The list below includes the risks reported to the audit and risk committee in the fourth quarter of FY24. The risks highlighted in red are the top strategic risks that fall outside our risk appetite and tolerance levels. We effectively treat and monitor these. Safety and health Security of electricity/power supply and the impact of higher electricity costs Cybersecurity Unsuccessful project execution and funding ability Not achieving operational plans at our critical operations Supply chain disruptions (including supply of goods and increasing costs and availability) The impact of climate change Gold price and forex fluctuations (varying from planned levels) Top strategic opportunities Opportunities are important for our future growth and sustainability aspirations, and complement our strategic risks. The table below includes eight grouped opportunities reported to the audit and risk committee in the fourth quarter of FY24. Organic growth opportunities to increase the quality of our ounces and drive down costs Increased copper exposure in the Harmony portfolio Productivity improvement projects Exploring value-accretive merger and acquisition and divestment opportunities Reducing our reliance on Eskom and the potential impact of carbon taxes by exploring alternative ways to generate power Exploring Harmony’s water resources and supply to surrounding communities Explore the installation of dynaCERT’s HydraGEN technology at Hidden Valley Mine Lock-in additional revenue from the sharp increase in the gold price. Risk management manual Our approach to safety encompasses critical control management, preparedness, prevention and the monitoring, review and analysis of relevant Safety and Health indicators Enterprise risk management presentation [1.3mb] Risk management manual [13.7mb]
