The group assesses the presence of leases in supply contracts with external parties as at the commencement date of the

agreement. Having determined that a contract contains a lease asset (and respective contractual cash obligations), Harmony

recognises a right-of-use asset and lease liability. The group discloses expensed amounts for contracts assessed as variable

leases, low value asset leases and short-term leases. The disclosed value of these expensed leases is either determined on a

straight-line basis over the duration of the lease or on a systematic basis that fairly indicates the consumption of the lease

contract. All expensed lease contracts are recognised in production costs, corporate, administration and other expenditure in the

The group applies the following practical expedients when assessing lease contracts:

▪The low value lease exemption – the group has elected to take the low value exemption with a value of R50 000 for the

individual leased asset value and also applied its accounting policy on capitalisation of assets based on IAS 1 materiality

▪The short-term lease exemption – leases with a duration of less than a year will be expensed in the income statement on a

▪Non-lease components – the group has applied the practical expedient not to separate non-lease components from lease

components, and instead account for each lease component and any associated non-lease components as a single lease

component for the classes of the underlying asset where it is appropriate to do so.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,

discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its incremental

borrowing rate. The group has applied the IFRS 16 portfolio approach in determining the discount rate for leases. As such, a

single discount rate has been used for contracts that share similar characteristics. The group has determined that a portfolio of

contracts that are denominated in the same currency may use a single discount rate. This rate has been determined using

various factors including in-country borrowings as well as other sources of finance. The nature of the right-of-use assets was

Lease payments included in the measurement of the lease liability comprise:

▪Fixed lease payments (including in-substance fixed payments), less any lease incentives

▪Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement

▪The amount expected to be payable by the lessee under residual value guarantees

▪The exercise price of purchase options, if the lessee is reasonably certain to exercise the options

▪Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The non-current and current portions of the lease liability are included in other non-current liabilities and trade and other

payables in the balance sheet respectively.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the

effective interest method) and by reducing the carrying amount to reflect the lease payments made. The group remeasures the

lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

▪The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease

liability is remeasured by discounting the revised lease payments using a revised discount rate

▪The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed

residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial

discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised

discount rate is used)

▪A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease

liability is remeasured by discounting the revised lease payments using a revised discount rate.

26Leases continued

Accounting policy continued

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before

the commencement day, any initial direct costs and restoration costs as described below. They are subsequently measured at

cost less accumulated depreciation and impairment losses.

The lease term shall be determined as the non-cancellable period of a lease, together with:

▪Periods covered by an option to extend the lease if management is reasonably certain to make use of that option and/or

▪Periods covered by an option to terminate the lease, if management is reasonably certain not to make use of that option.

Whenever the group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located

or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and

measured under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-

use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of the lease term and useful life of the underlying asset. If a lease

transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a

purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts

at the commencement date of the lease.

The right-of-use assets are presented in mining assets and non-mining assets as part of the property, plant and equipment line

in the balance sheet. The group applies its existing accounting policy on impairment of non-financial assets to determine whether

a right-of-use asset is impaired and accounts for any identified impairment loss accordingly.

Critical accounting estimates and judgements

Key judgements applied in determining the right-of-use assets and lease liability are:

▪Assessing whether an arrangement contains a lease: various factors are considered, including whether a service contract

includes the implicit right to the majority of the economic benefit from assets used in providing the service

▪Determining the lease term: management considers all facts and circumstances that create an economic incentive to exercise

an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only

included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if

a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control

of the lessee. The company applies the considerations for short-term leases where leases are modified to extend the period

by 12 months or less on expiry and these modifications are assessed on a standalone basis

▪Determining the discount rate: in determining the incremental borrowing rates, management considers the term of the lease,

the nature of the asset being leased, the currency in which the lease payments are denominated, in-country borrowings as

well as other sources of finance

▪Determination of whether Harmony has control over the special purpose entities (SPVs) owning the photovoltaic generation

facilities of the Phase 1 renewable energy program. Harmony has entered into three 15-year agreements whereby Harmony

will purchase all the electricity produced by the photovoltaic generation facilities of the Phase 1 renewable energy program at

favourable rates. Harmony has no equity or voting interest in the SPVs and did not provide a direct guarantee for any of the

obligations of the SPVs towards their shareholders or third-party debt funders. At the end of the PPA tenure, Harmony is

obliged to take up, for a nominal amount, either the solar generation facilities or the shares of the SPVs (provided all liabilities

in the SPVs are settled at that date). In the event of termination of the agreement by Harmony or in the event of force majeure

due to unforeseeable circumstances that prevent one of the parties from fulfilling their obligations set out in the agreements,

Harmony is required to assume the photovoltaic generation facilities and would be required to settle all third-party outstanding

debt in the SPVs. In some instances Harmony may have to settle all or a portion of outstanding shareholder loans as well as

incur a termination penalty. Harmony has assessed these clauses as protective in nature and the exposure to losses are

deemed to be remote. Harmony was assessed to not have control over the SPVs based on the assessment that Harmony

does not have substantive rights to direct the relevant activities of the SPVs. The payments made for electricity generated by

the Phase 1 photovoltaic generation facilities is to be accounted for as variable lease payments once the facilities have been

commissioned.

26Leases continued

The movement in the right-of-use assets is as follows:


	SA Rand
Figures in million	2025	2024
Balance at beginning of year	569	553
Additions	290	270
Modifications	11	15
Depreciation	(258)	(248)
Terminations	(77)	(5)
Translation	(30)	(16)
Balance at end of year	505	569

The non-current and current portions of the lease liability are included in other non-current liabilities and trade and other

payables in the balance sheet respectively.

The movement in the lease liabilities is as follows:


	SA Rand
Figures in million	2025	2024
Balance at beginning of year	506	526
Additions	250	249
Modifications	11	15
Interest expense on lease liabilities	28	32
Lease payments made	(319)	(278)
Terminations	(10)	(6)
Translation	(30)	(32)
Balance at end of year	436	506
Current portion of lease liabilities	206	260
Non-current portion of lease liabilities	230	246

The maturity of the group's undiscounted lease payments is as follows:


	SA Rand
Figures in million	2025	2024
Less than and including one year	208	270
Between one and five years	168	182
Five years and more	146	131
Total	522	583

The amounts included in the income statement relating to leases:


	SA Rand
Figures in million	2025	2024
Depreciation of right-of-use assets (a)	258	248
Interest expense on lease liabilities (b)	28	32
Short-term leases expensed (c)	310	348
Leases of low value assets expensed (c)	49	17
Variable lease payments expensed (c) & (d)	2 632	2 030

(a)Included in depreciation and amortisation.

(b)Included in finance costs.

(c)Included in production costs and corporate, administration and other expenditure.

(d)These payments relate mostly to mining and drilling contracts as well as contracts for transportation of marginal gold ore.

Variable lease payments comprise 80% of the total lease payments made during the period. The majority of the variable

lease payments made relate to the contracting of specialists for mining operations at Harmony's open-pit mines and are

determined on a per tonne or square metre basis.

The total cash outflows for leases are:


	SA Rand
Figures in million	2025	2024
Principal and interest payments made for lease liabilities	319	278
Short-term lease payments	310	348
Lease payments of low value assets leased	49	17
Variable lease payments	2 632	2 030
Total cash outflows for leases	3 310	2 673

During 2022, Harmony reached financial close on three 15-year term power purchase agreements for the procurement of

electricity from 30 MW photovoltaic generation facilities. These agreements constitute variable lease contracts that Harmony is

committed to. The variable lease payments from these contracts are determined with reference to the quantity of megawatt

hours (MWh) generated by the facilities. The commercial operating date for the three plants was achieved during August 2023.

The variable lease payments incurred as it relates to these power purchase agreements amounted to R78 million (2024: R54