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DRDGold incurs committee chair's wrath

May 22 2012 16:32 Sapa

Company Data

DRDGOLD LIMITED [JSE:DRD]

Last traded 2.89
Change 0.09
% Change 0.03
Cumulative volume 262683
Market cap 1.11bn

Last Updated: 29/08/2014 at 04:25. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town - The head of parliament's water affairs portfolio committee has vowed to summon the executive management of mining company DRDGOLD [JSE:DRD] to appear before MPs to explain what he called its "blackmail" of government.

"We're not going to take nonsense like that... that is absolutely unacceptable," chairperson Johnny de Lange said.

The committee was being briefed by senior water affairs and Trans-Caledon Tunnel Authority (TCTA) officials on the management of acid mine drainage (AMD) in the Witwatersrand mining region.

De Lange was reacting to a statement by TCTA executive manager Johan Claassen, who said DRDGold was trying to trade granting access to its land in the Central Basin - on which it has mining operations - in return for indemnification from AMD claims.

Claassen is a member of the government-appointed team dealing with AMD.

"The challenge that we currently have with the Central Basin is that we don't have such a cooperative arrangement with DRDGold; they are trying to use the position in terms of giving us access to land to also get some indemnification from the department of water affairs," Claassen said.

The so-called Central Basin is the mining area that lies under Johannesburg and Germiston, and is one of three geologically discrete areas - across the Witwatersrand region - threatened by AMD. The other two are the eastern and western basins.

Water affairs chief operations officer Trevor Balzer added to Claassen's explanation, saying what DRDGold was "trying to do at the moment, in giving us access to their land, is saying, 'well, indemnify us from any claim'. "

De Lange took strong exception to what he had heard.

"How can people blackmail you, to tell you we'll give you access to the land... but by doing that we want to be indemnified from any other obligations?

"How can we even negotiate with people like this? We should just give them directives... and tell them to do it! And if they don't, we should donner (beat) them!" he said.

He said mines that had contributed towards the AMD problem were being "mollycoddled" by the department.

"I am really serious about this... we are mollycoddling these mines which have created a problem... This is a clear case of blackmail! What nonsense! There is no space for negotiation here," De Lange said, adding that to do so would set a precedent.

Claassen, who said the matter was being dealt with "by the respective legal teams", told De Lange the problem had to do with sludge disposal from the AMD treatment operation, which is set to start in the Central Basin in April next year.

"The problem that we have is that we have to dispose of the sludge. We need the mine's cooperation to co-dispose on their tailings facility," he told the committee.

De Lange responded angrily to this, telling him to arrange to have it done elsewhere.

"Do it somewhere else and just put all the most strict obligations you can on those people... Make sure they pay for every damn thing! You put every obligation on them... You do this and you find another place to put this sludge."

He told the officials to "have no further negotiation with these people" on access, and to issue DRDGold a legal directive stating what was expected of them.

"And you can tell them this committee is highly, highly irritated that we have this sort of attitude from people that... in all probability have contributed to this problem, and are getting away scot-free at the moment."

He also instructed water affairs to write a letter to the mining company.

"Saying that, as a committee, we absolutely abhor what they're doing, and from our side we will be opposed to any kind of threat... and coercion.

"We absolutely will not (accept) that the law will not be applicable to a mine because they've threatened us, (by not allowing) us to do certain things on their property.

"I will find something that will get them to this committee... I want them to come before the public and say what they said. We're going to do that. We're not going to take nonsense like that... that is absolutely unacceptable," he said.

Contacted for comment, DRDGold said it would welcome an opportunity to appear before the committee.

"We would welcome an opportunity to meet the portfolio committee and its chairman, as well as meet with water affairs officials," spokesperson Charmane Russell told Sapa.

She said a meeting with water affairs had been postponed twice in recent weeks, and DRDGold had been "unable to confirm meetings, despite a request by the company".

Russell said DRDGold's only operation in the Central Basin was the Blyvooruitzicht Gold Mining Company, which it was in the process of selling.

According to DRDGold's website (www.drdgold.co.za/sd/amd.asp), "any attempt to force a financial burden on DRDGold in excess of 1.5% of the costs of treating AMD would be challenged in the appropriate forum".

Russell said the company stood by this position.

Earlier, the committee heard that acid mine water in the Central Basin was now 334 metres below the surface and only 155 metres below the environmentally critical level (ECL). It was rising at an average rate of 0.33 metres a day.

Water affairs senior manager Marius Keet said if left unmanaged, it would breach the ECL in June or July next year.

A new high density sludge plant, with a capacity of 84Ml a day, would be installed and commissioned by April next year, and the treated water discharged into the Elsburg Spruit.

Keet said the basin was yielding 57Ml a day, well below the 84ML a day capacity of the planned plant.

drdgold  |  acid mine water
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