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Johannesburg - DRDGold boss Niël Pretorius launched an extraordinary attack on the country's largest union, The National Union of Mineworkers (NUM) labelling its regional members as "absurd and untruthful".
Pretorius was speaking at the group's December quarter presentation on Friday in which it reported a R33.4m profit, equal to a R42m turnaround in fortunes quarter-on-quarter.
Pretorius' discontent with unions stems from an incident at DRDGold's Blyvoor mine when a lightening strike disabled the mine's power temporarily stranding about 167 miners underground.
According to Pretorius, NUM officials pressurised the minerals and energy departmental representative responsible for mine safety to shut the mine - a development he believes was politically motivated.
"They were indifferent and oblivious towards the financial considerations of the mine," said Pretorius. "[They] were downright untruthful, absurd and extremely irresponsible," he said.
In an interview with Miningmx, Pretorius said the problem was restricted to regional level at NUM and related to internal politicking.
NUM spokesperson Lesiba Seshoka said it was "nonsensical" for Pretorius to claim the union would use its political power to ensure the safety of mineworkers.
He then referred to a Presidential mine safety audit, the details of which were released last week, which stated that South African mines were only 66% safe.
Against this background NUM would like to see a technical audit done to see what was happening in the mine, he said. "We can't let them kill our own people and then be afraid of them."
Said Pretorius: "Local union members were very keen to see managers placed under pressure. NUM will have to take stock."
Market negative
At the operating level, DRDGold reported a gross profit from operating activities of R33.8m (September: R27.2m).
However, the market didn't look favourably on the performance.
DRDGold was just over 5% down on the JSE at R7.60/share, while Harmony Gold, which also reported results today, was 1.79% lower. AngloGold Ashanti and Gold Fields were 3% and 0.2% higher respectively.
DRDGold's total gold production fell 15% in the December quarter, but the global economic crisis would help sustain gold's "safe-haven" appeal and support current gold price levels, said Pretorius.
"These uncertain times may continue to provide the safe haven attraction of gold, and support the gold price at its current high levels," said Pretorius.
ERPM staying with DRDGold
Analysts questioned the wisdom of deciding not to sell DRDGold's Boksburg-based ERPM mine which was shut last year with the retrenchment of 1 300 employees (the R34.4m cost was carried in the December quarter).
The company earlier invited expressions of interest with three offers finding their way to Pretorius' desk.
But Pretorius said each offer had been rejected because they did not contain a plan for dewatering the mine which carries a R3.2m per month pumping cost.
Talks are underway with Central Rand Gold, a company that owns a mine adjacent to ERPM, about sharing the cost of the pumping in the future.
Pretorius said he expected DRDGold to carry 17% of the pumping cost in addition to the R2.5m per month it costs to keep the mine on care and maintenance.
- Miningmx.com
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