DRDGOLD Sustainable Development Report 2012...of some R342 million is planned. This will be...
Transcript of DRDGOLD Sustainable Development Report 2012...of some R342 million is planned. This will be...
ergo’s Brakpan metallurgical plant
OuR PeRFORMAnCe
DRDGOLD Sustainable Development Report 2012 16
DRDGOLD has an unrivalled position in the surface gold retreatment business in South Africa and leverages this to optimise shareholder returns while fulfilling the role of good corporate citizen.
DRDGOLD Sustainable Development Report 2012 17
Financial capital
DRDGOLD knows that a key concern of any shareholder is to maximise investment returns in a sustainable manner.
Contribution to BEE
Exploration expenditure
Capital investment
DRDSA Empowerment Trust
Payments to employees
CSI/LED expenditures
Payments to government
Returns to shareholders
Value added by operations
Gold produced and sold
Goods and services procured by the company
Net environmental liability
CONTRIBuTION ImPACT
While DRDGOLD’s operations create wealth for its investors, they
also create value for various stakeholders as recovery and treatment
operations create jobs directly and indirectly. This leads to down-
stream economic activity; they turn to account mineral wealth
otherwise trapped in tailings storage facilities (TSFs); and they
liberate prime land located within the hub of economic activity
for redevelopment.
The company’s activities therefore have a tangible impact on its
employees, the communities surrounding its operations and local
and national government.
The DRDGOLD Integrated Report provides a comprehensive review
of the operational and financial performance of the company, and
the broader material, environmental, social and governance issues
that underpin the company’s business performance. This report
may be found on the website. www.drdgold.com
Gold produced and soldIn FY2012 DRDGOLD produced 232 353 ounces of gold (including
Blyvoor for 11 months of the year) – 135 708 ounces (58%)
was produced at Ergo. In FY2011, this figure was 265 179 for
DRDGOLD (including Blyvoor) and 144 065 ounces at Ergo. Gold
sales generated revenue of R3 004 million, based on an average
gold price of US$1 679 per ounce and a rand/US$ exchange rate of
R7.70/US$.
Pleasingly, the group’s operating margin rose from 29% in FY2011
to 35% in FY2012. An important feature of the company’s cost base
going forward is the decrease in labour costs as a percentage of total
costs. (See graphs on page 19).
DRDGOLD produces bullion bars containing approximately
85% gold and 7% to 8% silver with the balance comprising copper
DRDGOLD Sustainable Development Report 2012 18
and other common elements. These bars are delivered to Rand
Refinery, in which DRDGOLD has shares, where the gold is refined.
Purified to 99.9%, and thus meeting the standards of the LBMA, the gold is cast into troy ounce bars and sold on DRDGOLD’s behalf at the LME afternoon fixed US$ price. www.randrefinery.com
Goods and services procured by the companyThe total discretionary expenditure on goods and services in FY2012 was R1 637 million (FY2011: R1 474 million).
DRDGOLD is mindful of the role it can and must play in transforming its procurement base to include emerging entrepreneurs and to provide preferential access to HDSA vendors. DRDGOLD’s procurement policy gives BEE companies preferred supplier status as long as they are commercially competitive.
Creating and adding valueValue added is defined as the value created by activities of a business and its employees and, in the case of DRDGOLD, is determined as the sale of precious metals less the cost of materials and services. The value added statement reports on the calculation of value added and its application for stakeholders in the group. The statement shows the total value added and how it was distributed, taking into account the amounts retained and reinvested in the group for the replacement of assets and development of operations. Based on the
value-added statement (on page 20) DRDGOLD created value of some R1 400 million in FY2012 (FY2011: R1 144 million).
Payments to employeesA significant component of the group’s positive contribution to financial capital is the payment made to employees and, in turn, the significant number of dependents with access to these payments. As at 30 June 2012 the group employed 2 222 people (792 employees and 1 430 contractors) – 851 people (229 employees and 622 contractors) were employed at Ergo.
While a significant component of the company’s cost base has, historically, been the payments made to employees, including salaries, wages and other benefits, this cost component has declined in the restructured DRDGOLD as Ergo’s surface operations are much less labour-intensive than the underground operations.
The total amount paid to employees in FY2012 was R821 million. In the first half of FY2012, employee costs made up 33% of the total cost base; in the second half of FY2012, this declined by 2% to 31% due to the sale of Blyvoor to Village and the associated reduction in employees.
CSI and LED expenditureThe group’s CSI and LED initiatives are primarily, but not totally, aligned with our SLPs. In FY2012, total CSI/LED expenditure amounted to R6 million (FY2011: R16 million). See Social capital section on page 29 for further details.
Labour 32%
Consumables 25%
Electricity and water 19%
Contractors 12%
Services 12%
Cost breakdown 2012 (including Blyvoor)
Labour 18%
Consumables 31%
Electricity and water 19%
Contractors 15%
Services 17%
Cost breakdown 2012 (excluding Blyvoor)
Employees 59%
Community 1%
Government 1%
Dividends to shareholders 2%
Interest on borrowings 1%
Reinvested in the group 36%
Value distributed 2012
Pouring concrete for the mill foundations of the flotation/fine-grind project
DRDGOLD Sustainable Development Report 2012 19
Payments to governmentPayments to government are made up of company taxation,
employee taxation and mining royalties. In FY2012, the company
paid R17 million in taxation (FY2011: R6 million), and R5 million
in mining royalties (FY2011: R4 million). DRDGOLD did not receive
any financial assistance from government in FY2012.
Returns to shareholdersDRDGOLD values its shareholders and their commitment to the
company. In FY2012, the company paid dividends of R29 million, or
7.5 South African cents a share.
BEE shareholders received a distribution of R17 million (FY2011:
R32 million). Employees belonging to the DRDSA Empowerment
Trust each received a payment of R1 000; funded by the dividend
the DRDSA Empowerment Trust received.
Investing in capitalInvesting in capital supports the company’s positive view of the
future, and its intention to deliver greater value to shareholders.
In FY2012, capital expenditure was R319 million. In FY2011, capital
expenditure was R316 million. In FY2013, capital expenditure
of some R342 million is planned. This will be allocated to the
flotation/fine-grind circuit (R211 million), upgrade to the Brakpan
tailings facility (BTF) (R30 million), Angelo Pan project (R26 million),
exploration (R22 million) and other (R53 million).
Investing in explorationIn FY2012, the company undertook exploration activity to better
understand its surface assets in South Africa. A total of 457 holes
were drilled – some 3 812m at a cost of R0.5 million. This exploration
will assist in delineating future operating activities.
Financial capital (continued)
Value-added statement
FY2011 FY2012
R million % of total R million % of total
Value added2 565 Sale of gold 3 004
(1 474) Less cost of materials and services (1 637)
1 091 95 Value added by operations 1 367 98
53 5 Income from investments 33 2
1 144 100 Total value added 1 400 100
Value distributedemployees
759 66 Salaries, wages and other benefits 821 58
Community
16 1 Corporate social investment 16 1
Government
6 1 Current taxation 17 1
4 – Mining royalties 5 –
32 3 Distribution to Bee shareholders 17 1
Providers of capital
19 2 Dividends to shareholders 29 2
11 1 Interest on borrowings 8 1
847 74 Total value distributed 903 64
297 26 Reinvested in the group 497 36
1 144 100 Total value added 1 400 100
DRDGOLD Sustainable Development Report 2012 20
DRDGOLD through its JV with Chizim Gold, has spent R27 million
on exploration in Zimbabwe at five main target areas: Ascot, Leny,
John Bull, KT and alluvial potential in the Guinea Fowl River.
Geochemical and geophysical surveying has been conducted on
all the sites, and was followed up with trenching and diamond
drilling on the John Bull, Leny and KT properties during the year.
No resource statement has been produced for any of the targets
as yet.
Environmental and mining permits for the alluvial potential in the
Guinea Fowl River were received during the year and trial mining
on certain sites within the area has commenced. Evaluation of
the possible pay horizons, recoveries and tonnage is currently in
progress. DRDGOLD is planning to invest in exploration on the
John Bull, Leny, KT and alluvial properties during FY2013 while
maintaining the other targets at reduced activity until the resource
statements have been quantified on the above mentioned targets.
BEE and transformationDRDGOLD’s BEE strategy is aimed at broad-based transformation
across all levels of the company. DRDGOLD complies with the BEE
equity target of 26% set by the Mining Charter for 2014.
The company’s BEE partner, Khumo Gold, acquired a 15% interest
in Ergo Mining Operations in FY2006; increasing this stake to
20% later in FY2006.
The majority of capital expenditure in FY2013 will be on the flotation/fine-grind project
DRDGOLD Sustainable Development Report 2012 21
Human capital
R22.9 million spent on training and development
35.5% HDSAs in management
13.5% women in mining
Health care programme for employees, including TB and HIV/AIDS
Continued incidence of HIV/AIDS and TB
2 222 people employed (792 permanent employees and 1 430 contractors)
Fatal accident at work
Industry leading safety performance
1 530 people retrenched at Blyvoor in restructuring programme
CONTRIBuTION ImPACT
DRDGOLD depends on a healthy, skilled, trained and committed
workforce which works safely and productively and is able to
succeed in a progress-enabling organisation. DRDGOLD aims to
develop and empower its people to perform at their best and to
grow as individuals.
Ensuring the health and safety of employees is a primary strategic
imperative for the company, and a key performance area for all
levels of management and supervisors, and takes precedence over
any production objectives.
DRDGOLD upholds the labour rights set out in the Fundamental
Rights Convention of the International Labour Organisation (ILO),
ensuring fair employment practices at all of its operations. Our
policies and practice ensure that all employees are treated fairly,
irrespective of origin, race or gender, and comply with South Africa’s
employment equity requirements.
Our contextDRDGOLD’s transition into a surface operating entity has seen a
significant change in the make-up of our human capital, and indeed
in our risk profile. Three of the most significant changes have been:
• A significant decrease in the number of employees and
contractors employed by the company, and changes in the
sourcing and origin of employees; combined with the different
skills sets that are now required.
• The vastly reduced risk profile in respect of both health and
safety.
• The change in the physical footprint of operations. While
DRDGOLD no longer has a presence in the Carletonville area,
the company acknowledges its legacy in that region and retains
strong ties with certain regional bodies (see page 11); at the
same time, the extent of the Ergo footprint provides significant
challenges in that its operations are located within and around
communities (formal and informal) across an area in excess of
1 200km2. See page 34 to 36.
Health and safetyOur Health and Safety Policy commits the company to conducting
its activities in a manner that ensures employee health and safety
is a top priority at all times.
Occupational health and safety at an operational level is the
responsibility of line management, and is a key indicator of business
performance. Risk assessments and safety audits are conducted at
all operations on a regular basis. Our health and safety department
reports to the board on a quarterly basis. Health and safety
agreements with unions at each operation provide for a joint
management/union Health and Safety Committee.
Nurturing a culture that upholds the effective management of
occupational health and safety in each and every employee is an
DRDGOLD Sustainable Development Report 2012 22
imperative for the company. To this end, awareness campaigns and
training programmes are integral to the health and safety function
across the company. Many initiatives were undertaken during
FY2012, among others:
At Blyvoor:
• a campaign to create greater awareness and support for
employees’ rights and duties towards safety;
• amonthlysafetyshift;
• theuseofself-containedself-rescuers;
• extended safety representative training (from three days to
14 days); and
• education and training related to refuge chambers, trackless
mobile machinery, support installation entry and face
preparation, mid-shift barring and winches and rigging.
At Crown and Ergo:
• a campaign to create greater awareness and support for
employees’ rights and duties towards safety;
• a joint accountability campaign reminding employees and
supervisors of their roles in safety;
• agoodhousekeepingcampaign;
• monthly hazard assessment audits as part of the process
of continuous risk assessment. High risks are immediately
mitigated;
• a campaign that focuses on hand and finger injuries, the
condition of hand tools and use of the right tools for the job; and
• educationandtraining relatingtotheuseofeyeprotection,
electrical safety and the dangers of lighting fires in
confined spaces.
During the year, hazard assessment audits were conducted every four
weeks by the safety department and form part of the continuous
risk assessment process. Each hazard identified is rated according
to the International Register of Certified Auditors (IRCA) Risk
Management methodology, which includes consequence, exposure
and probability, to attach a value to each hazard to determine its
priority ranking. High risks in terms of this classification are dealt
with immediately by the person accountable for the hazard to
ensure that it is rectified. In addition, another campaign has been
implemented to inform employees about their rights related to
safety and the duties required of them according to Sections 22
and 23 of the Mine Health and Safety Act of 1996 (MHSA).
A Joint Accountability campaign is in place and continues to
be implemented at Crown; aimed at reminding supervisors and
workers of the respective roles they play in preventing injuries in
the workplace.
A safety drive that focuses on the relationship between hand and
finger injuries, and the necessity for tools and equipment to be
kept in good condition, continues to be implemented. This initiative
includes awareness about the importance of using the right tool for
the right job.
Campaigns continue to ensure that all employees who enter the
company’s plants wear eye protection to reduce injuries caused by
foreign bodies and to focus attention on electrical safety.
All employees received training on the “4 steps 2 safety” checklist
campaign at EBDA.
DRDGOLD is a signatory to the 10-year health and safety targets
set at the 2003 summit of the Mine Health and Safety Council
(MHSC), which is a tripartite body comprising members drawn from
government, employers and employees. Under the chairmanship of
the Chief Inspector of Mines, the MHSC advises the Minister of
Mineral Resources on health and safety at operational level as well
as research programmes, and also reviews regulations.
Joint approachDRDGOLD encourages the participation of employees and
management at all levels in health and safety matters. A full-
time health and safety steward has been elected by the workforce
and is compensated by the company. The full-time steward’s
appointment, in line with the MHSA, is a critical link with employees.
A further 93 elected part-time health and safety representatives
representing employees and contractors, provide for a ratio of
safety representatives to employees of 20:1. Contractor companies
have their own health and safety structures in place that conform
to legal requirements; this is monitored by the company.
A joint management/union Health and Safety Committee, made
up of management, the full-time health and safety representative
and other union representatives, meets on a monthly basis to
discuss issues relating to health and safety. This committee is
responsible for:
• representing all employees on matters relating to health
and safety;
• identifying critical issues that hamper health and safety
performance;
• ensuring that employees are issued with personal protective
equipment;
• assistingwiththeintroductionofanymeasuresthatmayaffect
health and safety;
• analysingincidents,statisticsandotherhealthandsafetyrelated
information placed before it;
• participatinginriskauditsandmanagement,inspections,audits
and accident investigations; and
• identifying areas where training and education would be
beneficial.
identification of safety risksRegular risk assessments and safety audits are conducted at
DRDGOLD’s operations. The major safety risk areas are:
• thehandlingofcyanide;
• failuretolockoutmachinerywhenmaintenanceorrepairsare
carried out;
• unsafesteepfaces;
• riggingwork;
• overheadpowerlines;
• conveyorbelts;and
• trespassersenteringtheminingarea.
Hazard assessment audits are conducted every four weeks by the
safety department and form part of the continuous risk assessment
process. Each hazard identified is rated according to the IRCA Risk
Management methodology. This system includes consequences,
exposure and probability, to attach a value to each hazard in order to
DRDGOLD Sustainable Development Report 2012 23
determine its priority ranking. High risks are mitigated immediately
by the person conducting the audit and communicated to the
person accountable for the hazard to ensure that they are rectified.
Safety performanceIt is with deep regret that the company reports the death an
employee of our security contractor who succumbed to the effects
of carbon monoxide. Emanuel Zama Rikhotoso died on 12 April
2012 after he lit a fire in a closed shelter while on duty (classified
as a mine accident). He is survived by his wife and two children.
The board and management extend their sincere condolences
to his family and colleagues. The company has embarked on an
educational campaign relating to the dangers of lighting fires in
confined spaces. This practice is prohibited and signs have been
erected at all security cabins banning these practices.
No Section 54 notices were issued by the DMR and no production
days were lost as a result of injuries. In total, 266 shifts were lost as
a result of 21 lost time injuries (LTIs).
DRDGOLD’s Knights operation achieved 180 days without LTI twice
during the year and, by the end of June 2012, the Crown operation
had reached 217 LTI-free days.
Occupational healthDRDGOLD’s occupational health strategy has two pillars:
• eliminatingorreducingthesourceofhealththreats;and
• regular health monitoring, particularly of those employees
potentially at risk.
The most significant occupational health diseases at DRDGOLD are:
• pulmonarytuberculosis(TB),theriskofcontractionofwhichis
increased by exposure to silica and when individuals are HIV-
positive; and
• noise-induced hearing loss (NIHL), which can occur when
employees are consistently exposed to noise level in excess of
85 decibels over an extended period of time.
The company’s occupational health care programme makes
provision for initial, periodical and exit medical examinations.
Employees are screened for NIHL and TB. Statutory records are
kept and compensation claims submitted to the Medical Bureau for
Occupational Diseases on behalf of affected employees.
In total 4 113 (FY2011: 10 023) screening medical examinations were
performed during the year. The significant decrease is as a result of
the decrease in employee numbers following the sale of Blyvoor.
All employees are covered by an external medical scheme. In addition,
our occupational health clinic, staffed by a full-time occupational
health practitioner and a part-time doctor, provides primary health
care facilities on site.
niHLEmployees are made aware of the importance of wearing ear
protection and the long-term effects of NIHL during the induction
process, as well as ongoing education campaigns. In FY2012 no cases
of NIHL were submitted for possible compensation (FY2011: five);
this is a significant milestone for the company.
HiV/AiDSHIV/AIDS is a serious threat to the well-being of employees, the
company and our communities. The company’s strategy includes:
• actively driving awareness programmes, and involving
stakeholders in a multi-faceted approach to educate employees
and their dependents to prevent the incidence of HIV/AIDS;
• providing confidential, informed voluntary counselling and
testing (VCT);
• developingwellnessprogrammesforemployees;
• providingappropriatemedicalcaretoemployeessufferingfrom
HIV/AIDS; and
• givingterminallyillemployeestheopportunitytolivetherest
of their lives with dignity.
Our approach to HIV/AIDS is based on prevention, early detection and provision of treatment. VCT is provided to employees on request.
As all employees are covered by a medical aid scheme, they attend private or government clinics/hospitals and the company does not keep their medical records. It is, therefore, not possible to determine the number of employees participating in wellness programmes or anti-retroviral treatment or the associated costs.
Human capital (continued)
Reportable injury frequency rate
0,0
0,5
1,0
1,5
2,0
2,5
FY2012FY2011FY2010FY2009FY2008
Lost time injury frequency rate
0
1
2
3
4
5
6
7
8
FY2012FY2011FY2010FY2009FY2008
DRDGOLD Sustainable Development Report 2012 24
The Khotso-Caritas Hospice, situated on the ERPM property until January 2012, offered a wide range of treatment, not only for employees, but also for community members from the wider Ekurhuleni area. These services included VCT, anti-retroviral treatment and a wellness programme and were provided at no cost to employees and community members. Negotiations are underway with a local interest group to reopen the clinic and the crèche on site.
DRDGOLD continues to support the AIDS Week Bannerthon as part of a show of solidarity with HIV/AIDS sufferers by the business community, and as part of a commitment to raise money for
AIDS orphans.
Pulmonary tuberculosisA total of three TB cases were reported at Ergo in FY2012
(FY2011: three).
Employment and human rightsAt the end of FY2012, DRDGOLD employed 2 222 people (792 permanent employees and 1 430 contractor employees). At the end of FY2011, the company employed 6 875 people (5 160 permanent employees and 1 715 contractor employees). The significant difference relates to the transfer of 2 550 employees to Village on 1 June 2012 and the retrenchment of 1 530 employees at Blyvoor during the restructuring process prior to the sale. This included, as far as possible, minimal forced retrenchments. Placement to other companies, natural attrition, voluntary separations and retirements accounted for 80% of separations. Excluding the Blyvoor operation, DRDGOLD’s turnover was 1% during the year.
While the deployment and management of people is a line function overseen by management, overall responsibility for the management of human resources, industrial relations and labour practices across the company lies with the general manager: corporate services; supported by the human resources manager: operations and a team of specialist human resources and training personnel to handle the day-to-day management of employee-related issues.
Employment equity, transformation and overall sustainable development issues are the responsibility of the human resources manager: operations. At a board level, these issues are monitored
by the Social and Ethics Committee. In compliance with the requirements of the Mining Charter, priority is given to the attraction, retention and development of HDSAs and women.
Employee affairs and labour relations are governed by recognition agreements while conditions of employment are governed by legislation which addresses:• prescribedminimumlevelsofcompensationandbenefits;• employmentequitypractices;• tradeunionaccessandmembership;• therighttostrike;• compensationforoccupationalillnessorinjuryonduty;• mandatory compensation in the event of termination for
operational reasons; and• theprovisionandfinancingoftrainingandskillsdevelopment
programmes.
employment practicesFair employment practices, equal opportunities and employment equity, with the scope for employees to develop to their own potential, drives the company’s employment practices.
DRDGOLD draws employees from local communities as far as possible, although the company does not discriminate against individuals based on their nationality. At the end of FY2012, all employees (100%) were considered to be local. These local employees are drawn from areas that are within 50km of our operations in the greater Johannesburg metropolitan area.
DRDGOLD requires contractors who undertake work for the company to be compliant with legislation and adhere to the company’s policies, particularly those related to health and safety. All contractors are required to undergo an induction programme which is aimed at informing and educating them about specific requirements.
The company’s remuneration practices are benchmarked on a regular basis to ensure that pay scales remain market-related. Minimum notice periods in respect of operational changes are prescribed by legislation.
NUM 2%
UASA 82%
Non-unionised 16%
ERPM – Union membership FY2012
NUM 56.0%
UASA 7.5%
Non-unionised 36.5%
ERGO – Union membership FY2012
DRDGOLD Sustainable Development Report 2012 25
At the end of FY2012, Ergo employed 851 people. Some 56% are
members of NUM and 7.5% affiliated with UASA – The Union
(UASA). At ERPM, where 39 people are employed, 2% belong to
NUM and 82% to UASA.
A two-year wage agreement signed in 2011 provides for a 2012
wage increase of 8%.
Benefits provided to full-time employees include: annual study and
sick leave; maternity and paternity leave; special leave for employees
involved in competitive sporting activities; medical aid; pension and
provident funds; study assistance; and a profit share scheme.
employment equityEmployment equity legislation in South Africa promotes equal
opportunity and fair treatment through the elimination of unfair
discrimination and the implementation of affirmative action
measures to redress the imbalances of the past.
To this end, DRDGOLD has an employment equity programme in
place that is guided by the requirements of the Mining Charter and
the Employment Equity Act of 1998. Employment equity plans and
progress made in achieving targets are submitted to the Department
of Labour (DoL) every year.
The recruitment and retention of highly sought-after, skilled HDSAs
and women remains a challenge.
At the end of FY2012, HDSAs made up 35% of management
(FY2011: 28% excluding Blyvoor). The Mining Charter requires that
HDSA employees make up at least 40% of management.
At the end of FY2012 women working in the engineering and
metallurgy disciplines made up 13.5% (FY2011: 10.8%) of the
total workforce.
Human rightsDRDGOLD upholds the basic labour rights enshrined in the
Fundamental Rights Conventions of the ILO related to collective
bargaining and ensures the implementation of fair employment
practices. The company respects and defends the rights of all
employees to a working environment free of discrimination based on
race, religion, age, disability or political affiliation. The company also
prohibits forced, compulsory and child labour.
A sexual harassment policy is in place to prevent harassment in the
workplace or at any other employee-related event or activity.
The rights to freedom of association and collective bargaining
are entrenched within the South African Constitution, prescribed
legislation, industry contracts and recognition agreements with
unions. DRDGOLD supports the rights of all employees. These rights
are not at risk within the company and no incidents of human rights
abuse were reported during the year.
Collective bargaining structures, policies and practices are embedded
at all levels of the operation, and ensure that employment practices
are fair and employees are represented appropriately.
Skills developmentDRDGOLD has an extensive skills development programme in place.
Talent is fostered through learnerships, on-the-job training, the
provision of bursaries and study assistance. All DRDGOLD operations
identify HDSAs for skills development and advancement.
Human capital (continued)
Charles scoops Brainbox prize
Competition encourages ideas
The first Brainbox winner was selected at the close of Q4 FY2012. As announced in the company newsletter, Asikhulume, Charles Mathabathe was the man with the best suggestion and the winner of a R5 000 cash prize for his ideas to improve efficiencies in the plant.
The Brainbox concept is born out of the conviction that employees are the repositories of knowledge. The aim of the quarterly competition, says DRDGOLD CEO Niël Pretorius, is not so much to make money out of implementing ideas but to persuade employees to actively think about what they are doing in the workplace. “Ours is a volume business so any idea that saves even a few cents a tonne can result in significant savings. However, my idea with the Brainbox is primarily to encourage people to think about what they are doing instead of just mindlessly doing their jobs. If a cash prize can encourage even half the individuals who work for us to do that, then I think we will have succeeded.”
Brainboxes have been placed at all DRDGOLD operations to encourage every employee to participate. “DRDGOLD believes that every single person should be invested in the success of the company – for the benefit of all,” says Barry de Blocq, general manager: corporate services for DRDGOLD.
DRDGOLD Sustainable Development Report 2012 26
During the year, a total of 32 people were included in the company’s
talent pool. Workplace skills development plans and training
reports, which identify DRDGOLD’s future skills needs and training
requirements, are submitted to the Mine Qualifications Authority
each year. DRDGOLD employees also received training related to
health and safety practices, radiation awareness, how to handle
hazardous chemicals, first aid and fire training during the year.
In total, the company spent R22.9 million on the training and
development of its employees during the year.
A significant challenge faced by the company is sourcing and
retaining skilled and experienced artisans as these individuals are in
high demand.
As metallurgy forms a key part of DRDGOLD’s business, DRDGOLD
is conducting a pilot programme to evaluate junior metallurgists.
This will indicate the gaps in skills and experience which may exist
among young metallurgists working at DRDGOLD. As part of this
programme, junior metallurgists are exposed to the company’s plants
to gain experience in the various metallurgical disciplines.
Located at Ergo, EBDA was established by DRDGOLD in 2009
to help address the critical shortage of skills in the country and
across all sectors of the economy. EBDA offers first-rate training to
DRDGOLD employees including:
• learnershipsinengineering;
• skills programmes in metallurgy, minerals processing and
engineering;
• AdultBasicEducationandTraining(ABET);and
• shortcoursesincomputerskills,operatortrainingandlicensing
and health and safety.
VuselelaIn FY2011 DRDGOLD launched the Vuselela initiative aimed at
developing the full potential of employees, harnessing not just their
physical strength, but their intellectual capacity. This initiative is an
important component of workplace alignment and harmony as it
aims to align the ambitions of employees with the ambitions of the
company to create a situation where employees understand that the
success of the company is reliant on their performance and vice versa.
The programme intends to “activate” common values. In workshops,
employees have been encouraged to articulate their vision, goals
and values for themselves and for DRDGOLD. The intention behind
this initiative is to revitalise the company and to create a better
workplace for all.
ABeTAlthough it is DRDGOLD’s policy to employ only individuals
with a minimum of a secondary school qualification, there is
no discrimination against existing employees who do not hold
this qualification.
ABET is offered to facilitate literacy and numeracy, and to offer
employees the opportunity to further their education and improve
their career prospects. ABET is available to employees on a full-time
or part-time voluntary basis, depending on the company’s needs.
ABET is also offered to community members and regular adverts
are placed in local newspapers to convey the message. Employees
and members of a number of communities located near DRDGOLD
operations attend ABET classes at EBDA on a full-time basis. During
the year, 171 employees and nine community members received
ABET training at EBDA. Four classrooms and four computer rooms
can accommodate around 120 learners at a time.
An additional ABET centre was opened at the City Deep plant to
facilitate access to ABET for these employees. This facility comprises
two classrooms and one administration office where three facilitators
offer classes in literacy and numeracy to 21 learners (16 employees
and five community members).
The total cost to DRDGOLD of providing ABET in FY2012 amounted
to R1.0 million (FY2011: R2.0 million).
LearnershipsDRDGOLD offers learnership programmes to provide employees
with the opportunity to improve their skills through a combination
of studying and practical, on-the-job training. Learnerships play an
important part in processing employees’ careers as they lead to
qualifications recognised by the Sector Education Training Authority
(SETA) and are registered with the DoL.
In FY2012, 13 employees participated in learnerships at EBDA:
electrical (four), fitting (seven) and boilermaking (two). The group
comprises one woman, three white males, one Indian male and eight
black males.
During the year, the company spent R2.95 million on learnerships
(FY2011: R8.1 million).
MentorshipsDRDGOLD’s mentorship programme provides for annual training and
formal meetings with protégés on a regular basis to review progress
in terms of each individual’s career development plan. Protégés have
to submit a monthly report to their mentors, summarising their
activities during that period. This report highlights the progress made
by each individual in terms of their specific career development plans.
In FY2012, seven mentors and seven HDSA protégés participated in
the company’s mentorship programme.
Bursaries and study assistance programmesBursaries and financial assistance are offered to employees studying
at tertiary institutions in disciplines that are core to the mining
industry and form an integral part of the company’s employment
equity plan. The number of bursaries offered is guided by the
company’s long-term requirements and the value of bursaries is
market-related; covering tuition fees and the cost of board and
lodging as well as an allowance. One HDSA woman completed her
geology studies during the year.
The cost to the company of the bursary programme during the year
amounted to R0.5 million (FY2011: R0.6 million).
Employees also receive assistance toward study courses that
will develop their careers. The company meets the cost of fees,
study materials and prescribed books as well as the associated
accommodation and travelling costs.
In total seven employees were assisted during the year at a cost of R51 000 (FY2011: R123 200).
DRDGOLD Sustainable Development Report 2012 27
Human capital (continued)
Preparing future generations
Thoko triumphs over adversity
DRDGOLD’s commitment to education and broadening the
skills base in the mining industry includes a bursary scheme
for individuals pursuing mining-related qualifications. Six
candidates were awarded bursaries for the 2012 academic year –
two first-year students and four in their second year or beyond.
All come from difficult circumstances but their dedication to
education has guaranteed DRDGOLD’s assistance in realising
their career aspirations.
A Soweto resident, 19-year-old Mthokozisi (Thoko) Siwela, is in the
second year of his studies towards a national diploma in electrical
engineering at the University of Johannesburg. Cheryl Marais,
remuneration manager at DRDGOLD, says the company gladly
covers the cost of his tuition, textbooks, a monthly allowance and student housing because he is an exceptional student.
Thoko’s parents have both passed away but his father taught him metalworking skills which he has used to earn a living. Although he is a full-time student, he supports his two older sisters and a younger brother.
In spite of his difficult circumstances, Thoko was the dux scholar at Bopasenatla Secondary School where he matriculated in 2010. The school did not hesitate to recommend him to Buti Biloane, then transformation and sustainable development manager for DRDGOLD, as a bursary candidate. Since then, Thoko has upheld his academic performance by obtaining two distinctions in the first university semester of 2012.
Thoko is extremely grateful to DRDGOLD for this opportunity to enrich his life. “Strength comes from meeting obstacles head on” is Thoko’s philosophy.
Standing from left: Jaco Schoeman, executive officer – business development; Charles Symons, chief operating officer; Buti Biloane, HR manager – Ergo; Niël Pretorius, CEO; Craig Barnes,chief financial officer; Barry de Blocq, general manager – corporate services; Cheryl Marais, manager – remuneration; Charlene Naicker, personal assistant; Themba Gwebu, executive officer – compliance; Kevin Kruger, managing director – Chizim; Hannes Botes; manager – risk and internal audit. Seated: the bursary students: Johan Prinsloo, Thoko Siwela, Kyle Eastwood and Adel Mosate. Not pictured: Penelope Sempe and Emanuel Leso
Out with the old, in with the new
Vuselela:are-awakening
“Vuselela”, an isiZulu and isiXhosa word that means reawakening, is the name of a DRDGOLD campaign aimed at re-energising the workforce and creating a company of proud employees.
DRDGOLD believes that a strong company is built on a shared value system. To achieve a common goal, starting from executive managers, every person should ask:• Doesmybehaviourstrengthenthecompany?• DoIdoanythingthatweakensthecompany?
With the support of the unions – NUM and UASA – Vuselela has been rolled out to the workforce in sessions of 10 to 15 people at a time. Union representatives assist in presentations along with dedicated facilitators from EBDA.
The sessions concentrate on creating a new ethos for DRDGOLD in a light-hearted manner. Participants discuss their values, and then consider the behaviour required to create a safe and positive work environment. Vuselela also aims to empower individuals so that they can set and realise their own personal goals – for the greater good of all.
The following values have been identified by employees as the most important: honesty, accountability, respect, tolerance, courage and consideration.
Communication with employees includes coffee mugs bearing the image of the Vuselela parrot and the values; articles in the employee newsletter, Asikhulume; follow-up sessions with employees; posters in the “Think!” campaign; and messages on payslips, key rings and stickers.
The parrot was chosen as the Vuselela symbol because this bird plucks tired feathers and sheds old claws to make way for regrowth. In the same way, “renewal” is critical to maintaining the success of DRDGOLD and its employees.
Approximately 600 employees attended Vuselela sessions in FY2012.
DRDGOLD Sustainable Development Report 2012 28
Social capital
Our contextIn South Africa, unemployment and poor service delivery continue
to negatively affect the poorest of the country’s citizens. The youth
have been failed by the education system and school dropout figures
are unacceptably high. Around 86% of students who complete
Grade 12 do not proceed to tertiary education. Poor standards of
education, coupled with inexperience, place South African youth at
a disadvantage in the labour market and about 50% of all young
people between the ages of 18 and 25 years are unemployed.
Compared to other emerging economies, where 40% of adults under
the age of 25 have a job, in South Africa, only one in eight working age
adults under 25 are employed.
Social capital refers to the social infrastructure – the relationships, networks, programmes and institutions – which shape and support the intellectual, emotional and spiritual development and interaction of the individuals that make up communities. Social cohesion is critical for societies to prosper economically and for development to be sustainable.
DRDGOLD is committed to making a meaningful and relevant contribution to the sustainability of the communities surrounding and affected by our activities.
Corporate social investment
Socio-economic impact of retrenchments –
restructuring at Blyvoor
Skills development of community member
Local economic development
CONTRIBuTION ImPACT
DRDGOLD Sustainable Development Report 2012 29
Developing skills to improve the employability of people from HDSA
communities, particularly women and the youth, through education,
skills development and encouraging entrepreneurship is a critical
priority for both the industry and the country.
Mining activities – particularly surface mining operations – cannot
continue to be significant creators of jobs over the long term due to
the finite nature of natural resources. As capital expenses increase
and natural resources decline, companies need to restructure which
results in fewer jobs. The sale of Blyvoor to Village – a company with
the capital and skills required to sustain the life of the mine – at an
affordable cost has, to some extent, mitigated the negative impact of
imminent closure.
Our approachOur philosophy is three pronged:
• toalleviatehardshipthroughempowerment;
• tomobilisethepotentialoftheyouth;and
• to create emotional andfinancial independence through self-
realisation of worth, own potential and skills development.
Our key focus areas are:
• own employee development – life after employment (Vuselela
and Best Life);
• the youth – (maths and science and enterprise clubs for
entrepreneurs); and
• thedisenfranchised.
Socio-economic developmentDRDGOLD supports local communities by providing finances or
donating goods. Support can also include managerial time and
expertise, and allowing access to mine infrastructure or transport.
The main areas of focus are:
• education,particularlyinthesubjectsofmathsandscience;
• skillsdevelopment;
• sustainablejobcreationtoalleviateunemploymentandpoverty;
• health(particularlyHIV/AIDS);
• housing;and
• the overall improvement of the environment surrounding
its operations.
In FY2012 DRDGOLD spent R5.5million (FY2011: R15.8 million)
on socio-economic development projects. EBDA, located on
the Ergo premises in Brakpan, remains the most significant
LED project established by DRDGOLD in terms of impact and
expenditure, contributing almost R21 million since it was
established in 2009. EBDA is fully accredited by the Mining
Qualifications Authority SETA.
The academy’s mission is to facilitate and host accredited business
development processes and learning opportunities in a financially
viable and sustainable manner in order to meet the human resource
development needs of DRDGOLD, its strategic partners and identified
communities within the Ekurhuleni, Johannesburg and Mogale
metropolitan municipalities.
EBDA was designed to become a self-sustaining and valuable asset to
the community – contributing to the growth, profitability and general
upliftment of South Africans – and will continue beyond the current
life of mine of DRDGOLD’s operations.
Employing 22 full-time employees, EBDA offers first-rate training to
corporate employees, private learners and unemployed community
learners. Training includes:
• learnershipsforcorporate-sponsoredemployeesinengineering,
motor mechanics, new venture creation and construction skills;
• shortcoursesandskillsprogrammesinmetallurgyandminerals
processing,engineering and ABET; and
• shortcoursesincomputerskills,operatortrainingandlicensing
as well as health and safety.
EBDA also offers an accredited venture creation programme aimed
at equipping participants with the necessary education and skills to
establish sustainable small, medium and micro enterprises. Graduates
from the programme are offered the opportunity to receive business
coaching and support over a two-year period.
A learner database, with the details of the graduates, has been
established to provide recruitment and placement services to
surrounding businesses and the learners.
The EBDA Maths and Science Centre of Excellence provides support
to both students and teachers at three local schools in the Tsakane
and Kwathema communities, including:
• TsakaneSecondarySchool;
• TlakulaHighSchool;and
• LangavilleSecondarySchool.
The centre also provides learners with the opportunity to attend
maths and science bridging classes to help them obtain the necessary
minimum qualifications to qualify for technical fields of study.
All projects supported by DRDGOLD are located within the
communities affected by its operations and contribute to the general
upliftment of the community or specific individuals within it.
Social capital (continued)
DRDGOLD Sustainable Development Report 2012 30
CSi projects FY2012
name of project Description of benefits received by beneficiaries
Bopanang Primary School • Conversionoftwoclassroomsintoafeedingcentre• Refurbishmentofablutionfacilities• Learners,staffmembersandtheBopanangcommunitybenefitedfromthisprojectTotal cost: R477 000
Tree, shrub and grass propagation and planting programme (see page 42 of the Natural capital section)
• Reductionofdustemissions• Employmentof20peopleatBrakpanand12peopleatCrownonathree-month
rotational basis• SkillstrainingTotal cost: R96 000 a month
Donations FY2012
name of beneficiary Description and expenditure
Johannesburg community members Donation of winter clothes, soup and food parcelsTotal cost: R400 000
Riverlea community Donation of sports equipment to recreational centre
Pennyville community Donation of soccer kits
Johannesburg Mining, Environment and Economic Forum
Donation of office furniture
Tsakane old age home Donation of kitchen equipment
Funukukhanya School Sponsorship of strategic workshop
Geluksdal Secondary School Sponsorship of strategic workshop
Ramaphosa community Youth Against Crime campaign
DRDGOLD contributed to an upgrade of facilities at Bopaneng Primary School, including a feeding centre
DRDGOLD Sustainable Development Report 2012 31
Social capital (continued)
Investing in the future
EBDA comes of age
EBDA, founded by DRDGOLD and situated near Ergo’s Brakpan plant, achieved a number of milestones this year. One of the most important was accreditation as a private Further Education and Training (FET) college by Umalusi and the Department of Higher Education and Training.
Due to the strict criteria in the awarding of FET status to private educational institutions, this recognition is significant and testimony to the success and sustainability of the EBDA business plan. DRDGOLD’s aim in establishing EBDA was to help individuals become productive members of society, and to raise the educational standards of its workforce and members of the communities surrounding its operations.
Another significant milestone in FY2012 is that EBDA is a year ahead of the five year plan to “break even”. Launched by DRDGOLD in FY2009 with an almost R21 million investment to date, EBDA had to be self-sustaining at the end of a five-year period.
EBDA fills a critical role on the East Rand. In addition to ABET classes, N-level technical, engineering, science, maths and related courses that prepare students for industry trade tests, it provides other important learning interventions to 40 students annually.
A Maths and Science Centre of Excellence, under the guidance of Eric Mnisi, offers extra tuition to 534 learners from grades 10 to 12 in surrounding secondary schools during and after school hours. This EBDA initiative has been so successful that a third campus is due to open at Tsakane Business Park with a view to offering maths and science tuition to another group of learners who have already left school but would like to improve their knowledge to become employable.
A second small satellite campus was established at City Deep in May 2012, and offers ABET classes to the Diepkloof community – 20 students have already completed courses there.
Maths and science are the building blocks for young people wanting to pursue careers as doctors, scientists, engineers and inventors. Developing a sound economy requires graduates in these disciplines. South Africa is currently facing critical shortages of suitably qualified graduates in maths and science.
The DRDGOLD initiative aims not only to address the shortfall, but also raises the proficiency of educators in bi-monthly workshops. The specialised training aims to further develop the teaching style of the educators and improve learning techniques.
Another important EBDA project is the Enterprise Clubs initiative. Designed to expose young people to the realities of the working world and to foster entrepreneurship, the clubs currently target three schools – Langaville, Tsakane and Tlakula – in Tsakane, KwaThema and Duduza. Over a period of three years, 36 Grade 10 learners are identified as entrepreneurs-in-the-making and exposed to an initial nine-month training programme. The basics of running a business, and the values
and skills required to negotiate life as young adults are taught. At the end of the course, suitable candidates are given a small amount of capital to launch a business idea. In the following two years, they are supported and mentored, and their success is measured by their profits.
“DRDGOLD considers this project critical for the economic growth of the community, which stands to benefit from additional well-run businesses that provide job opportunities, and to ensure our future leaders are prepared,” says Piet Pistorius, EBDA manager.
“Empowering people who haven’t had the benefit of a good education is essential if we are to overcome the economic hardships of unemployment and poverty,” says Enterprise Clubs facilitator Malefane Maleka.
“The entrepreneurial skills will provide us with an opportunity to uplift ourselves and, hopefully, we will be able to offer job opportunities to others from the community,” said one of the students at the Enterprise Clubs launch in April 2012.
DRDGOLD Sustainable Development Report 2012 32
The dawn of the digital age
Media centre for Crestview
While South Africa is largely in step with the technology of the digital age, a large portion of the country remains in the dark.Although cell phones have penetrated rural backwaters, some communities are still struggling to acquire basic essentials like food and shelter. Many children, sometimes forced to look after their siblings, have never seen or touched a computer.
However, in South Hills, on the outskirts of Johannesburg, the DRDGOLD corporate social investment programme is a beacon of hope. Barry de Blocq, general manager: corporate services and his colleague Buti Biloane, formerly transformation and sustainable development manager, have secured a bright future for the children at Crestview Primary School, near one of DRDGOLD’s metallurgical plants.
DRDGOLD contributed R285 000 towards the conversion of the school’s existing library into a media centre with 40 computers
(the size of an average class), and managed the project through
to completion.
The new media centre opened amid much fanfare in November
2011. Representatives from the Department of Education
(Johannesburg South branch), Councillor Bev Turk (Ward 57)
and DRDGOLD employees were thanked in song and dance by
learners during the opening ceremony.
“We are delighted that DRDGOLD has brought Crestview into
the 21st century and given our children access to the Internet
and all it offers,” said principal Belinda Coutts.
Patrick Zondo, vice-chairman of the school governing body,
also expressed his appreciation for the DRDGOLD donation.
“We are pleased that DRDGOLD has prioritised this educational
initiative.”
Koos van Schalkwyk, strategic business unit manager at City
Deep, said DRDGOLD was delighted to have been involved in
this project.
In the wake of a deadly tornado
DRDGOLD lends a helping hand
DRDGOLD came to the aid of a needy community on the East Rand when a violent tornado struck Masechaba Extension 2, Duduza, on 2 October 2011.
In the wake of the disaster emergency services found 166 people injured, a child killed and hundreds of people left homeless. The R550 road, blocked by fallen trees, was also closed.
DRDGOLD partnered with the Gift of the Givers Foundation, and donated R50 000 towards the cost of replacing homes and supplying food parcels.
Barry de Blocq, general manager: corporate services for DRDGOLD, and his colleague Buti Biloane, then transformation and sustainable development manager, visited the site. “As Duduza is a labour sending area for our Ergo operation we were morally obliged to bring some relief to those who were affected,” says Barry. Buti adds: “Being able to make a difference to people
in crisis is rewarding, and it is always wonderful to experience their joy when the repairs and reconstruction begin, and they can see that they will have a chance to rebuild their lives.”
DRDGOLD is proud to be able to provide assistance and make a difference.
DRDGOLD Sustainable Development Report 2012 33
Natural capital
Our context DRDGOLD creates wealth by liberating non-renewable resources
(gold and possibly uranium) from existing TSFs. As with
underground mining, the surface reclamation process can have a
potential negative impact on the land, water and air in the areas
which surround its operations, but overall its resource usage is
considerably lower than that of underground mining operations.
Further, by processing these TSFs DRDGOLD is able to remove and
clean up legacy environmental concerns.
To limit the extent of the company’s impact on the natural
environment, DRDGOLD actively manages its environmental
footprint by complying with rigorous environmental legislation
and optimising the use of natural resources such as water and
energy, as well as materials such as fuels, cyanide and lime.
DRDGOLD is more a gold “factory” than a mining company. TSFs
are a consequence of underground mining, which results in a
combination of waste rock and ore being brought to the surface
for crushing, treatment and separation from the valuable mineral
stream, and further processed to release gold. It is estimated that
hundreds of TSFs were created by underground mining during
South Africa’s mining past, covering thousands of hectares of land.
As processing techniques improved over the years, retreatment or
surface mining became viable. DRDGOLD’s business is based on
extracting gold by reprocessing the TSFs deposited across South
Africa’s central Witwatersrand.
Removing the TSFs results in a gradual reduction in the
environmental liability on the books of DRDGOLD and other
mining companies, and the reduced cost of maintaining them and
mitigating their environmental impact. Achieving final closure is a
challenging and intensive process; only once a site achieves final
closure will the reduction of liability be evident.
At deposition, a TSF contains traces of minerals, and chemicals
such as cyanide, which is used in the gold leaching process. Cyanide
toxicity is neutralised through exposure to ultraviolet light rays
from the sun once deposited on the TSF.
Natural capital refers to the environment or the earth’s resources, that which provides goods and ecological services required to support life. These resources are either renewable (living species andecosystems);non-renewable(fossilfuelsandmineralsincluding materials, chemicals and reagents); or replenishable (potable water, fertile ground and the atmosphere).
Clearing and cleaning land for economic use
Highly efficient production of gold – less water, energy and other resources used, per ounce of
gold produced
CONTRIBuTION
Legacy issues: AmD and water pollution
Nuisance dust prior to and during reprocessing
Pollution caused by pipeline leaks
ImPACT
Greenhouse gas emissions
DRDGOLD Sustainable Development Report 2012 34
Not only have processing techniques improved over time, but
so have environmental knowledge, practice and legislation. TSFs
today are designed and constructed by specialists to minimise the
contamination of the surrounding environment and to ensure the
integrity of the resulting structure.
Better design, location, monitoring and rehabilitation of newer
dumps such as DRDGOLD’s BTF typically result in more
aesthetically pleasing deposition sites, with reduced or zero
water run-off into local water courses. They also emit less dust.
It is before and during the reprocessing period that these older
dumps can be significant sources of nuisance. Dust, particularly
during windy periods; water run-off during periods of high rainfall
and potential spillages by pipeline leaks could occur.
An important consideration is the proliferation of human
settlements, formal and informal, around these dumps, far closer
than envisaged by legislation or regulation. This has meant a far
more direct interface between communities and the impacts of
these dumps.
Our approachDRDGOLD’s approach to the environment is guided by
environmental policies which commit the company to managing
the environment in which it operates. This must be done
responsibly, and by adopting and implementing the environmental
practices outlined in legislation and regulation.
DRDGOLD’s policy is aimed at:
• complyingwithrelevantenvironmentallegislationandadopting
and applying the best practicable environmental option to
address any issues;
• integrating environmental management into the company’s
business and planning in order to minimise the influence of its
activities on the environment through internal risk assessments
and environmental impact assessments; and
• monitoring,evaluatingandreportingthesuccess(orotherwise)
of the mitigation measures applied.
Environmental management is the responsibility of the managing
director who is supported by the environmental manager: surface
operations and an environmental management team as well as
appointed consultants. The company regularly undertakes dust
and water monitoring and assessments of its compliance with
environmental management plans (EMPs) which have been
developed by the company and approved by the DMR.
DRDGOLD’s environmental management systems comply with
legislation and regulations set by the DMR, the DWA, the DEA, the
Gauteng Department of Agriculture and Rural Development and
the NNR. The company regularly consults with these regulatory
authorities.
DRDGOLD has EMPs in place for all of its operations. These plans
address the impacts and potential impact on the environment as well
as the measures to manage, monitor and mitigate these impacts.
DRDGOLD conducts both internal and external audits to assess
compliance. Annual audits are conducted to assess compliance
with the EMP by an external consultant and are submitted to the
DMR. The company conducts internal water audits on a quarterly
basis, the results of which are submitted to the DWA. An external
consultant and the environmental manager undertake an annual
assessment of closure liabilities. NNR audits are conducted once a
year as part of the NNR compliance monitoring procedure.
All operations applied for their integrated water use licences in
2006 and 2007. While Ergo’s application was approved in 2010,
Crown and ERPM are still awaiting approval of their applications by
the DWA and, in the interim, are operating in line with previously
granted permits.
Environmental incidents are monitored and reported to the relevant
authorities as required. During the year, five water pollution
incidents were reported to the DWA. The most significant incident
was the failure of the Ergo residue line which contaminated the
Withok River that provides drinking water for livestock and, in
certain areas, human consumption. The DWA issued a directive in
terms of section 19 of the National Water Act of 1998 pertaining
to polluting a water resource. The requirements of this directive
included cleaning and monitoring activities, both upstream and
downstream, to monitor the impact of the spill on the water
system as well as the implementation of rehabilitation measures.
In total, DRDGOLD spent R2.3 million to rehabilitate the river and
terrestrial damage.
Stakeholder engagement on environmental issuesDRDGOLD’s operations are located in close proximity to local
communities, and our activities and assets can have a significant
impact on the communities concerned. The company engages with
these communities on an ongoing basis through local councillors
and community leadership structures. Before any project which
may affect stakeholders is conducted, DRDGOLD engages in public
participation processes with I&APs.
DRDGOLD participates in the vicinity of a number of community
forums, including the Ekurhuleni Business Forum, Blesbok Spruit
Forum, Klip River Forum, Rand Water Catchment Quality Forum,
Heriotdale Business Forum, and the Wonderfontein Spruit Forum.
Quarterly meetings relating to dust emissions are held with the
relevant regulatory authorities including local municipalities as well
as ward councillors, business forums and I&APs to discuss dust fall
figures, new legislation and mitigation measures.
See case study on the dust issue on page 37.
DRDGOLD Sustainable Development Report 2012 35
Improving land use and management, rehabilitation and seeking closureDRDGOLD’s reclamation and processing footprint overlays an area that has been host to surface and underground mining for many decades and, in some cases, stretching back to the 19th century. Many of the environmental issues encountered are a legacy of previous mining activities. Notwithstanding this, DRDGOLD continues to address its role as a good corporate citizen in all the areas where it is responsible for managing land.
DRDGOLD has extensive freehold landholdings; land actually disturbed by mining and processing activities amounted to 4 804ha at the end of the year.
Rehabilitation of land formerly used for mining and processing activities represents a significant environmental effort and cost for DRDGOLD. In FY2012, the company spent R68.1 million on rehabilitation (FY2011: R31.5 million). The cost of rehabilitation accounts for side slope vegetation, top surface rehabilitation and dust suppression. In total 8.6ha of slide slopes and 20ha of top surfaces were vegetated during the year.
DRDGOLD applies for exemption to vegetate with respect to alien vegetation where this is necessary. For example, blue gum trees are not indigenous, but are used on TSFs where they absorb polluted water and act as windbreaks. In this case, the company will prevent
further spreading, but will not eradicate the trees as their benefits
outweigh any problems associated with their growth.
None of the DRDGOLD sites enjoy statutory protection or are
considered to be areas of high biodiversity.
Closure plans are in place at all operations as required in terms of
their EMPs. The closure liabilities associated with each operation
are assessed on an annual basis by an external consultant and the
environmental manager, and are then calculated in line with DMR
requirements. Rehabilitation trust funds are in place.
Resource efficiencyDRDGOLD is committed to using natural resources carefully and to
reducing waste wherever possible.
Water useWater is central to DRDGOLD’s operations as it is used in the
reclamation and retreatment processes. It is also a critical
component in managing TSFs and in the rehabilitation process.
While sand is reclaimed using mechanical front-end loaders and
repulped with water, slime is reclaimed using high-pressure water
monitor guns. This slurry is then pumped via DRDGOLD’s pipeline
network to the Brakpan plant.
Natural capital (continued)
Land disturbed by mining and processing activities (ha)
Plants Plant area Reclamation sites Tailings Total
Crown 15.3 992.0 341 1 348.3
City Deep 10.2 560.0 – 570.2
Knights 4.0 583.0 – 587.0
Ergo 56.1 – – 56.1
Brakpan tailings – 400.0 1 500.0 1 900.0
Elsburg slimes dams – 341.8 – 341.8
Total 85.6 2 876.8 1 841.0 4 803.4
Operation net closure liabilities (R’000) Trust funds (R’000)
FY2012 FY2011 FY2012 FY2011
Crown 182 009 165 955 59 614 56 476
Ergo 154 683 207 796 * *
ERPM 79 128 74 254 22 421 21 240
West Rand
Consolidated**
20 382 19 049 24 295 23 002
Total 436 202 467 054 106 330 100 718
* Guarantees have been secured to the value of R58 510 310 for ERPM, R7 753 932 for Crown and R208 000 000 for Ergo. The difference between the net liability and the trust fund for Crown (R129 126 956) has been secured as a guarantee, but is not yet incorporated since DRDGOLD is still waiting for confirmation from the DMR on this rehabilitation assessment. DRDGOLD is therefore fully funded with regard to its rehabilitation liabilities.
** West Witwatersrand Gold Mine Proprietary Limited contractually sold the mine to West Wits Mining Limited during FY2010. The cession from DRDGOLD to West Wits Mining Limited has been approved by the minister and is in the process of being registered.
DRDGOLD Sustainable Development Report 2012 36
DRDGOLD’s Dust Down plan
Dealing with a century of dust
DRDGOLD’s Ergo operation is now depositing the majority of its waste on the Brakpan tailings facility. This is because the deposition sites closer to Johannesburg, comprising the Crown tailings complex, have reached capacity and are in various stages of decommissioning and rehabilitation.
“The problem with these sites is that they are no longer in use and they are drying out and creating dust,” says Henry Gouws, managing director of Ergo Mining Proprietary Limited. “However, rehabilitation takes time.”
The waste from past mining activity was a feature of the landscape until, in the last quarter of the 20th century, remining the dumps became viable. In 1977 Anglo American established its Ergo plant to mine the waste dumps and extract gold using a metallurgical process. This continued until AngloGold Ashanti, as Anglo American’s gold operating arm was then called, closed down the operation in 2005. During that time, and in the years since 2007, when DRDGOLD acquired the Ergo plant as part of its strategy to become a surface retreatment company, waste was created.
However, unlike the first 100 years, the waste created by retreatment since the 1990s has been disposed of according to much stricter mining and other legislation which has been designed to provide a greater degree of protection for the public and the environment.
“The old dumps have become vegetated over time; mainly with grass and alien vegetation,” Gouws points out. “However, they are little habitats that have become established and people have even become attached to these green ‘hills’. When we come along and start mining, we disturb the vegetation and, in a nutshell, create significantly more dust – particularly in the dry months when there is no rain to keep the dust down. And winter heralds the start of the windy season in Gauteng.”
Communities and businesses situated around the dumps feel the most impact and complaints mainly relate to dust penetrating homes and various ailments.
Until these sources of dust have been removed, DRDGOLD has formulated a five point Dust Down plan:
1. Repair and vegetate dam buttress (toe) 2. Limit berm (bench) use for maintenance vehicle access: water
down regularly and clad with aggregate3. Complete slope vegetation (already well-advanced)4. Flatten day walls (top perimeter containments) for improved
air flow and to reduce dust picked up by wind5. Rehabilitate top surface: erect wind breaks, plough, fertilise,
plant and irrigate
The dust management plan has proved 100% effective on the Diepkloof dump where it has been implemented, according to Gouws and environmental manager Louis Kleynhans. “The Dust
Down plan targets all the problem areas and tackles the dump from top to bottom,” explains Kleynhans. “On the top surface of the dumps, the use of netting, ploughing, fertilisation, irrigation and vegetation has proved to be a winning combination. We are also working towards effective solutions on our other dumps.”
Described as a “bio wind break”, this method involves the use of permeable shade netting which is carefully placed in a strategic zig-zag pattern. This slows wind speeds and channels multi-directional gusts of wind. Vegetation is then planted in strips between the nets and a limited irrigation system of potable water is used until the plants are established. The soil is kept damp and is, therefore, less prone to generating dust. This method effectively reduces dust levels in the area and rehabilitates the environment at the same time.
Ridge ploughing is another process commonly used on the top of the tailings dams to suppress dust and wind erosion. Ridges are ploughed on the surface and against the prevailing wind. The ridges are then filled with wind blown dust particles known as drift which is oxidised and conducive to plant growth.
Another challenge faced by the team is the preparation of these huge tracts of land for rehabilitation as heavy machinery cannot be taken onto the dumps during the wet season. The work can only be done in winter when the surface is harder and drier, but also more dusty. “We also need to time our work so we can take advantage of the spring rains to establish the seedlings,” Kleynhans points out. “It would cost a fortune and be totally impractical to water the seedlings as often as they need it. We, therefore, need to include the rainy season in our cycle.”
Kleynhans and his team propagate a selection of indigenous species which have been identified as suitable for the mine dump environment. This aspect, as well as the use of community members for propagation, planting and maintenance, is discussed in the case study on page 42.
“We have a total targeted surface area of 30ha of side slope vegetation and 68ha of top vegetation, and a budget of R38 million,” says Gouws. “All we need now is time and people’s patience.”
DRDGOLD Sustainable Development Report 2012 37
Natural capital (continued)
DRDGOLD sources water from local utility, Rand Water, and uses
desalted water from TSFs. DRDGOLD uses as much recycled water
from its TSFs as possible and only consumes potable water when
necessary. DRDGOLD is currently investigating the possibility of
replacing all Rand Water used for processing purposes with treated
AMD water and/or treated sewage. This will reduce the operations’
dependence on potable water and assist in the reduction of salt
loadings on the Vaal Barrage.
During the year, DRDGOLD used 35 508m³ of water for primary
activities (FY2011: 32 464 000m³). Of this, 8 301m³ was potable
water sourced from Rand Water (FY2011: 8 491 000m³) which
constitutes 23% of total water used (FY2011: 32%).
The company does not deliberately discharge any water. Should any
discharges occur these are reported to the authorities, investigated
and remediated.
energy use and climate changeEnergy is a critical resource in South Africa, not only in respect of
access, continuity and security of supply, but also as a rising cost.
Our surface retreatment plants require significantly less energy
than underground mining operations, and we are far less at risk
from a safety perspective in respect of power supply interruptions.
DRDGOLD has measures in place to reduce electricity consumption.
The cost of DRDGOLD’s total energy consumption amounted to
R366.0 million in FY2012. Direct energy consumption is primarily
in the form of diesel usage, while indirect consumption relates to
the electricity sourced from South Africa’s power utility, Eskom. Of
Eskom’s power, approximately 89% is derived from coal-fired power
stations, resulting in significant indirect emissions for its customers.
As electricity is a critical component of costs – 16% of total cash
costs in FY2012 – the company places a great deal of emphasis on
its conservation.
While the company is affected by Eskom’s winter tariff programme
(when prices are higher during peak season demand), this is less
onerous for surface mining than underground mining. DRDGOLD
has continued to put control measures and warning systems in
place to deal with sudden power shutdowns. To this end, Ergo is in
the process of acquiring stand-by generators to ensure that critical
operations are not interrupted by power outages.
For DRDGOLD, carbon emissions are directly related to energy
usage. Our estimated total direct and indirect emissions of carbon
dioxide equivalent was 821 391 tonnes in FY2012.
Our climate change strategy is closely related to our energy
conservation strategy and is concerned not only with optimising
usage, but also related to potential carbon caps and taxes being
considered by the state.
DRDGOLD commissioned an external review of its greenhouse
gas emissions. Nitrous oxide (NOx), sulphur (SOx) emissions
and particulate emissions primarily reflect emissions from diesel
and electricity, while volatile organic compound (VOC) and
carbon emissions mostly record the relative diesel usage across
the company.
Materials usageThe most significant materials used are the retreated sand and
slimes. The primary chemicals used are:
• cyanide(usedinthegoldproductionprocess);
• hydrochloricacid;
• causticsoda;
• lime;
• carbon;and
• polyfuel/waxyfuel.
DRDGOLD is a significant user of cyanide in the gold liberation
process and recognises the need to adopt best practice in its
transport, storage and handling. Cyanide is purchased from Sasol,
a recognised and reputable company. Standard procedures and
protocols have been implemented and significant emphasis is
placed on training of plant employees. No cyanide-related incidents
were recorded during the year.
Nuisance dust prior to and during reprocessingDRDGOLD’s operations are typically located close to residential
or business communities and the impact of these operations,
particularly dust, can have a real and negative impact for short
periods. Dust is particularly problematic when wind speeds increase,
especially during the dry winter season.
Total water used and recycled1 (000m3)
FY2012 FY2011 FY2010
Potable water from external sources 8 301 8 491 9 089
% of total water used that is sourced from external sources 23 26 32
Groundwater used 15 198 6 299 4 309
% water used that is groundwater 43 19 15
Water recycled in process 15 154 17 674 15 337
% of water that is recycled 43 55 53
Total water used 35 508 32 464 28 7351 Figures include Blyvoor until end May 2012.
DRDGOLD Sustainable Development Report 2012 38
energy and fuel used
unit Year Blyvoor Crown eRPM ergo Total
Electricity MWh FY2012 373 376 168 591 11 386 124 119 677 472
FY2011 397 971 169 210 7 003 115 378 689 562
FY2010 386 156 159 942 11 354 97 632 655 084
Diesel Litre FY2012 925 725 1 203 675 – 246 533 2 375 933
FY2011 1 006 049 1 373 314 – 60 000 2 439 363
FY2010 841 590 997 721 – 240 000 2 079 311
Petrol Litre FY2012 37 500 – – – 37 500
FY2011 41 112 – – – 41 112
FY2010 49 371 2 959 – – 52 330
FPP Waxy fuel Litre FY2012 865 407 – – – 865 407
FY2011 1 051 207 – – – 1 051 207
FY2010 438 400 – – – 438 400
Summary table of total of emissions (tonnes)
Measure FY2012 FY2011 FY2010
Direct CO2 (Scope 1) 8 159 8 472 6 242
Indirect CO2 (Scope 2) 812 966 682 666 786 101
Travel emissions (Scope 3) 265 234 581
Total CO2 emissions 821 391 691 372 792 924
NOx 3 096 3 050 3 019
SOx 5 586 5 355 5 571
VOC 13 14 12
Carbon monoxide 35 36 31
Methane – 2 –
Particulate emissions 217 228 272
Blyvoor 54%
Crown 38%
Ergo 8%
Direct CO2 emissions
Total CO2 emissions by year
0
200 000
400 000
600 000
800 000
1 000 000
FY2012FY2011FY2010FY2009
Blyvoor 55%
Crown 25%
Ergo 18%
Indirect CO2 emissions
Electricity 99%
Diesel 1%
Direct CO2 emissions by source
DRDGOLD Sustainable Development Report 2012 39
Dust emissions from active and discontinued dumps remain one
of the most significant environmental issues facing DRDGOLD.
Monitoring these forms an important part of daily environmental
management. The dust issue, once mining has been completed, is
effectively nullified as the source of dust contamination is removed.
Dust emissions are captured at 1 464 monitoring points, sampled
on a monthly basis and analysed against the South African National
Standards (SANS). In FY2012 there were 155 instances where
dust levels exceeded the SANS standard (FY2011: 18). The sharp
increase in exceedances is due to the final decommissioning of the
Crown tailings facility in FY2012. Once deposition on a tailings
facility ceases, the material dries out and creates dust when the
wind blows. This is a temporary situation which will be resolved by
rehabilitation, which is already underway.
A dust register is kept to record complaints from the public.
When a complaint is received, the complainant is invited to meet
with the company (where this is appropriate) and mitigating
measures are then put in place where possible. Dust complaints
are also discussed at quarterly community forum meetings held
in the Ekurhuleni area and monthly meetings are held with DMR
representatives.
A number of measures to reduce dust are used, including
vegetation grass species such as Cynodon dactylon, Eragrostis
curvula, Agrostis teff and lucerne. Watering down active faces and
haul roads, adding rock cladding and the installation of shade
netting are also used where necessary.
During FY2012, the company completed 20ha of remediation work
on Ergo’s Brakpan/Withok tailings dams (profiling, vegetation and/
or cladding) and spent R6.9 million on dust mitigation measures.
In FY2012, DRDGOLD installed 20ha of dust netting, ridge ploughed
80ha of surface areas and established 8.6ha of side slope vegetation
and 20ha of top vegetation at the Homestead South, Diepkloof, GMTS
and Rooikraal tailings dams as part of the rehabilitation process.
The company estimates that all top surface areas will be fully
grassed within the next two years.
DRDGOLD actively collaborates with local communities in the
propagation and planting processes. See case study on page 42.
Pollution caused by pipeline leakageThe company faces various challenges in managing potential
discharges around its pipelines. These may arise for various reasons
such as a rapid increase in pressure, the theft of bolts on the pipeline,
or theft of copper cables at the various pumping stations.
DRDGOLD has a spillage management plan in place to mitigate
slurry discharges. Telemetric systems which detect pressure changes
have been installed and major sections of the Ergo operation
are constantly monitored by security personnel. By the end of
Q1 FY2013 the entire operation will be under 24/7 surveillance.
To reduce the extent of terrestrial damage and the impact on
biodiversity, spillage paddocks are in place alongside the pipeline to
ensure that spillages are contained should a discharge occur.
Natural capital (continued)
Materials used1 (tonnes)
FY2012 FY2011 FY2010
Cyanide 6 574 6 682 4 896
Steel (grinding) 8 098 9 274 –
Hydrochloric acid 1 656 1 482 1 616
Caustic soda 2 465 2 403 1 640
Lime 29 306 42 973 53 331
Carbon 1 267 1 114 7941 Figures include Blyvoor until end May 2012.
Results from dust monitoring in FY2012
Operationnumber of points
monitorednumber of
exceedances
exceedances as apercentage
of total in 2012 (%)
exceedances as apercentage
of total in 2011 (%)
Crown 942 105 11 3
Ergo 264 10 14 –
ERPM 258 40 14 3
Group (excl Blyvoor) 1 464 155 11 6
DRDGOLD Sustainable Development Report 2012 40
As required by the company’s EMP, the pipeline is regularly
inspected by the DMR, the NNR and the DWA.
In FY2012, two spillage incidents were reported at Ergo and three
incidents at Crown.
Legacy issues: AmD and water pollutionAMD is an enduring legacy of underground gold mining and a topical
issue. The central basin, created during South Africa’s 140 years of
mining, is currently flooding and water is expected to decant in and
around ERPM’s Cinderella Shaft if nothing is done to stop it.
AMD has been a public issue for a decade. As operations on mines
in the western basin of the Witwatersrand goldfields ceased,
underground workings began filling with water that, over time,
became contaminated. AMD occurs when metal sulphides, most
commonly pyrite, are exposed to and react with air and water.
When water flows over or through sulphur-bearing mine tailings,
a chemical reaction occurs between the water and rocks resulting
in metal-rich, acidic water. From 2002, this water – which became
known as AMD – began decanting onto the surface mainly at Black
Reef Incline, an old shaft.
Many of the companies that had operated these mines had long
since closed their doors, which left those still in existence with
a complex set of legal, ethical and commercial responsibilities.
DRDGOLD has worked hard to address its role as a good corporate
citizen on the one hand, and as the custodian of its shareholders’
interests on the other.
In 2005, the company, together with Harmony and Mintails Limited,
established the entities which ultimately became Western Basin
Environmental Corporation and Western Utilities Corporation
(WUC). These organisations were formed to investigate sustainable
solutions to AMD. This group co-funded the costs of treating AMD
for a period of two years while WUC went about its work.
WUC completed a bankable feasibility study in accordance with
commercial and regulatory parameters which were consistently
agreed with government via an Authorities Steering Committee, and
with representatives from various regulators and local municipalities.
The feasibility study indicated that treating the western basin water
in isolation as a stand-alone plant, which amounts to 15Ml per day,
would not be sustainable and that a minimum quantity of 75Ml per
day would be required to achieve the requisite economies of scale.
The solution to this was to combine water from the western basin
with that of the central (60Ml per day) and eastern (75Ml per day)
basins, which have similar water problems, so that an economically
viable water treatment plant could be established.
Studies indicated that the high density sludge (HDS) plant at ERPM,
which has the capacity to treat up to 80Ml of AMD per day, would
be the best site for the new centralised plant. A pipeline would
connect the western and central basins to stop the discharge of any
polluted water into the Tweelopies Spruit.
The solution was presented to government in 2009, but rejected.
A revamped proposal was submitted, based on the evaluation of
the report by the DWA. The government again rejected the solution.
In February 2011, the DWA released an inter-ministerial committee
(IMC) report on AMD compiled by a cabinet-appointed team. The
same month, the Minister of Finance announced that R225 million
had been set aside for the AMD problem.
This report recommended stabilising “hot spots” as a first step toward
a longer-term solution; and for the establishment of a neutralisation
plant with a 20Ml a day capacity, to supplement the existing
treatment capacity operated by Rand Uranium in the western basin.
An upgrade of mine water pumping facilities would also be required.
The report also recommended that the process of assessment,
risk appraisal and remedial measures should be continued as the
problems posed by AMD would have long-term implications. The
IMC report stated that the most appropriate technology to be used
would be the alkali-barium-calcium (ABC) process developed by
the Council for Scientific and Industrial Research plus a magnesium
barium alkali process. The ABC process is the same process proposed
by WUC and industry in the submissions to government in 2009
and 2010 which were rejected.
The water in the central basin is currently approximately 310m
below surface and rising at 0.35m per day. Partially-treated
water from the western basin is currently decanting into the
Tweelopies Spruit. In order to protect the groundwater, this
polluted underground water in the central basin cannot be
allowed to rise higher than 150m below surface. The DWA has
subsequently appointed the Trans-Caledon Tunnel Authority
(TCTA) to implement a short-term solution in the central basin
through the construction of a new HDS plant at the South West
Vertical Shaft. DRDGOLD and the TCTA are currently engaged in
negotiations with regard to access to the South West Vertical Shaft
and associated infrastructure. DRDGOLD will make this available
to the TCTA on the basis that DRDGOLD receives full value for
the infrastructure and property which could be considered as its
contribution to the solution.
If government does not implement processes to prevent the decant
from occurring, DRDGOLD will play its role as a good corporate
citizen. The company intends to pump and treat approximately
10Ml of AMD a day from the central basin. The water will be
processed through the company’s HDS plant adjacent to the South
West Vertical Shaft and it will be used for internal consumption.
DRDGOLD Sustainable Development Report 2012 41
Natural capital (continued)
Going green with the community’s help
Nursery project gains momentum
Post-democracy legislation places the responsibility for rehabilitation squarely on the shoulders of the mining companies. Not only required to rehabilitate the land on which they work from an aesthetic point of view, environmental management plans must provide details of formal closure arrangements, and financial provision must be made to meet all the requirements of mine closure. The early mine dumps gradually became vegetated over time, as vegetation and alien plants established themselves as a result of natural propagation methods. Surface mining, or the retreatment of surface gold tailings that has been taking place since the 1970s, has disturbed many of the original dumps where unique ecosystems had developed. Additionally, as all retreatment results in waste, the deposits from more recent surface mining activities have had to be accommodated. While this later waste has been deposited according to stricter guidelines than in the heyday of mining and, with the passing of time, the implementation of new laws, the dust remains a problem on the Witwatersrand, especially during drier, winter months.
It is no longer sufficient to let decades pass and allow nature to take its course. DRDGOLD therefore has policies and plans to mitigate dust not only on dumps where mining is taking place, but also on its deposition sites. One such project being worked on by the environmental team that is addressing the dust issue has been the establishment of plant nurseries. Here, specific plants are propagated for use in dust control.
Louis Kleynhans, manager of environmental services for Ergo, is responsible for the two nurseries currently operating in the Crown and Brakpan areas where all plants are nurtured and established before being planted. Approximately R50 000 a month is spent at the Brakpan nursery while at Crown’s 17 Shaft tree nursery a budget of R25 000 a month is required to maintain and grow the trees (mainly Combretum and Olea) to a suitable size so they can be planted on the dams. Grass species include Eragrostis curvula (weeping love grass), Cynodon dactylon (couch grass), Agrostis tef (teff), lucerne, and plants such as Hyparrhenia hirta (thatching grass).
The plants used in the project have been carefully selected. Research conducted by the University of the Witwatersrand and North West University, together with tree trials on the Crown tailings complex conducted by Kleynhans over a period of time, have assisted in identifying indigenous plants that are suitable for the prevailing conditions on a mine dump. In addition to the approximately 21 000 trees and shrubs that came as part of the deal when DRDGOLD acquired Ergo from AngloGold Ashanti, Kleynhans and his team have managed to propagate over 10 000 plants at the Brakpan nursery.
An effort is also underway to remove alien plant species such as pampas grass. “Although it is well established, this sort of
vegetation can disturb the area’s ecosystem,” says Kleynhans. “We therefore need to remove it and replace it with plants that have roots that will bind better and prevent run-off and other problems.”
This removal work, as well as all the nursery and planting work, is conducted by members of the local communities. Vegetation and planting activities have begun and some areas have already been extensively rehabilitated. At the Crown tailings complex a total area of 48 hectares on the top surface area has been planted and eight hectares of side slope vegetation have been established. At Brakpan tailings facility, 42 hectares have been established on the side slopes and next to the storm water launders. At the Crown tailings complex some 1 300 holes are currently being prepared for the tree planting project that will take place in September this year. At Ergo, 600 holes have been prepared on the top perimeter section for tree planting in spring.
DRDGOLD’s policy is always to provide employment to community members wherever possible and the nursery projects are an ideal way of using local residents to dig holes, fertilise, plant, install irrigation, propagate, water, prune and rebag plants as they grow. These jobs ensure that money flows into the community in a manner that is as fair and equitable as possible. Ward councillors for each area assist in selecting the individuals for these temporary, rotational positions and no experience or skills are needed. Instead, skills are acquired on the job. The rotation system means the benefits of having a job and learning new skills is not limited to a few individuals but spread as widely as possible.
DRDGOLD Sustainable Development Report 2012 42
Manufactured capital
The term manufactured capital refers to infrastructure we use to produce our product. In essence, it is the sum total of our plant and equipment.
Improving gold recoveries
Pursuing uranium
Seeking synergies
Investing capital
CONTRIBuTIONManufactured capital is designed and developed to deliver
optimally with other sustainable development forms of capitals.
The recovery process is done by way of harvested or stored water
in a closed circuit that limits demand on water; and slurries are
transported in pipelines designed to reduce power consumption by
up to 25%. Operations have been moved to a consolidated factory
where chemical and energy efficiency comply to international
standards of competence. Tailings are deposited on a single TSF
which is managed and maintained to reduce dust and water
pollution, and safely store contained chemicals.
Our contextJohannesburg emerged as a bustling metropolis on the African
continent towards the end of the 19th century with the discovery
of gold in the Witwatersrand basin. Around 1.5 billion ounces
have been mined over the past 140 years, initially from the
surface, but increasingly at great depth. The depth of underground
operations in South Africa is currently between two to four
kilometres below surface, which presents concomitant risks and
costs relating to access, labour intensity, cooling requirements and
support requirements, among others.
By contrast, DRDGOLD’s surface operations process waste that has
been discarded over the past 140 years and deposited on tailings
dams. Essentially, these are considered as being without economic
value. However, these TSFs – colloquially known as “mine dumps” or
“slimes dams” – still contain considerable amounts of gold due to the
inability of early technologies to liberate all traces of this precious
metal in a cost-effective way. By the late 1960s and early 1970s, the
gold price – and the availability of new technology – made recovery
and retreatment of the tailings a viable venture.
Sand dumps are reclaimed in a mechanical process, and slimes
dams by way of high-pressure water monitoring. As the Cason
dump is a sand dump which requires carbon-in-pulp technology for
retreatment, its material is treated at the Knights plant. Slurry from
all other DRDGOLD dumps is pumped to the Brakpan plant at Ergo –
via a 50km pipeline, and the Crown and City Deep pump and milling
stations – where modern carbon-in-leach (CIL) technology is used to
recover the remaining gold.
As the grade of these dumps is very low (around 0.3g/t), large
volumes are required for surface retreatment to be economical.
There are several economic benefits resulting from this technological
ingenuity: the recovery and treatment operations create jobs directly
and indirectly through down-stream economic activity; they turn to
account mineral wealth otherwise trapped in the dumps; and they
liberate prime land located within the hub of economic activity for
redevelopment.
Our approachAs DRDGOLD’s core business for the foreseeable future is extracting
gold by reprocessing sand and slimes dumps which stretch from
east to west, just south of Johannesburg’s central business district,
certain technological measures have been taken to ensure that
production is maximised. These include:
• the completionof a 50kmpipeline linking the formerCrown
and City Deep operations to Ergo’s plant in Brakpan;
DRDGOLD Sustainable Development Report 2012 43
• therefurbishmentofthesecondCILcircuitatErgo’sBrakpan
plant to increase treatment capacity to 1.8 million tonnes per
month (Mtpm) (and potentially to 2.4Mtpm if required); and
• the modification of the BTF to significantly increase the
deposition capacity.
The total capital cost of the 50km pipeline, the second CIL circuit and
the capacity increase at the BTF site amounts to R350 million.
Seeking synergies: linking Crown and City Deep to ErgoDRDGOLD embarked on the Ergo project with a number of key objectives. One of these was to exploit synergies between the Ergo operation in Brakpan and the mature Crown operation.
At the time Crown, although still functional, faced a major problem. Located in close proximity to Johannesburg, a bustling city, it no longer had adequate access to a tailings deposition facility. To move the tailings historically processed by Crown, and future product from the western side of the city, a 50km pipeline linking the Crown and City Deep plants with the Ergo plant at Brakpan was proposed.
Part of the process involved converting the Crown and City Deep plants to pump stations with milling capacity and the Crown plant has already been decommissioned. The pipeline was developed on time and within the budget using innovative technology. With a capacity of 600 000tpm, it has been fully operational since early 2012.
The pipeline has made it possible for tailings resources on the central and western Witwatersrand to be brought to account in one
streamlined operation on the eastern Witwatersrand.
Investing capital to improve efficiencies and increase scaleThe second CIL circuit at Ergo was refurbished to increase treatment
capacity in two stages. The first stage increased capacity from
1.2Mtpm to 1.8Mtpm. The potential exists to increase capacity to
2.4Mtpm in the longer term.
The BTF is located approximately 12km from the plant and is also
being modified in a phased approach. The monthly deposition
rate is being increased to a minimum of 1.8Mtpm and capacity of
the site by an additional 150Mt to 200Mt. The BTF is an integral
component of the retreatment process and ensures Ergo’s ability to
continue treating waste material well into the future.
As a surface retreatment company, DRDGOLD’s business, and
indeed its very existence, is based on the company’s ability to
adopt and develop technological innovations to transform the life
and value of its retreatment operations.
Improving gold recoveriesResearch and development (R&D) has been a major feature of the
DRDGOLD strategy since acquiring Ergo, particularly improving
gold recovery. The R&D team established that pyrite particles
containing some 40% of gold did not respond to the traditional
CIL process, and a flotation/fine-grind pilot project to determine
the best method of liberating gold from sulphides was established.
Results demonstrated that gold recoveries could increase by up to
20% if the tailings were separated in the early stages of treatment
and subjected to two different processes.
As part of the investigations, a flotation module was incorporated
into the front end of the CIL pilot plant to recover the sulphides.
Metallurgical testwork was then conducted to evaluate whether
improved gold recovery could be achieved. Evaluations showed that
only 45% of the sulphide contained gold.
A mineralogical study was carried out on the flotation concentrate
which revealed that the gold particles were five microns in size, and
that 58% of the gold was enclosed in pyrite and not amenable for
cyanidation. Most of the gold was not present as native gold but
as gold/silver electrum. The only way to recover this gold was by
fine-grinding to expose the gold particles for cyanidation.
The gold recovery testwork on the concentrates showed that grind
size, the addition of cyanide, conditioning time and leach time are all
important variables and that through additional fine tuning, 75% of
gold associated with sulphides can be recovered. As testwork was
carried out on the Elsburg material, a conservative performance
estimate was assumed for the Crown and City material which will
make up one third of the total feed to Ergo in future.
The DRDGOLD board studied the findings and approved an amount
of R250 million to refurbish the Ergo plant’s old flotation section,
and to install a new fine-grind section to increase gold production
by between 16% and 20%. DRDGOLD anticipates that the
flotation/fine-grind process should be fully operational by July 2013.
Manufactured capital (continued)
DRDGOLD Sustainable Development Report 2012 44
Pursuing uraniumErgo is also licensed to produce uranium and sulphuric acid.
As the flotation/fine-grind process is amendable to the addition
of resin-in-pulp technology, the flotation/fine-grind circuit may
also bring uranium recovery within Ergo’s reach at a substantially
lower cost than conventional uranium extraction technology.
A by-product credit reduction in gold production costs of between
5% and 8% – assuming production of 11tpm and a uranium spot
price of US$50/lb – could be achieved.
A feasibility study is underway to verify these assumptions,
and the estimated capital cost of between R150 million and
R200 million.
Ergo: extracting even more gold
Pilot project under microscope
The DRDGOLD business is the retreatment of surface gold tailings in order to extract the gold particles left over from earlier, more inefficient gold mining processes. Due to improved technology, and a rising gold price, the retreatment of gold is again a viable business.
The retreatment of old gold tailings began on the Witwatersrand in the 1970s when Anglo American established the Ergo plant in Brakpan. The plant, closed down in 2005 by AngloGold Ashanti (the then owner), was acquired by DRDGOLD in a JV with Mintails in 2007. From the beginning, the DRDGOLD strategy was to improve gold recoveries and establish synergies with its existing gold retreatment plants.
An R&D team under Bruce Ebell, manager of metallurgical technical services at Ergo, set to work and discovered that pyrite, containing some 40% of the gold in the slurry material, did not respond that well to the traditional CIL process. The results demonstrating that there was more gold available for extraction than was currently being accessed, were made possible by an electron microscope.
This specialised piece of apparatus is able to examine gold particles down to micron size (minute particles not visible to the naked eye) which was essential for this study. Using the microscope, samples of material were analysed to determine the location and size of the gold particles. Known as a mineral liberation analysis (MLA), this research was part of the initial research phase of the project.
The MLA involved scanning material overnight with the microscope so that the gold particles in the material could be examined and catalogued. The MLA results indicated that the average size of the gold particles in the sulphides was five
microns, and that the majority of gold particles were completely
encased. As a result, the cyanide process used for gold extraction
could not reach the gold, which was being discarded with other
waste material.
Additional research to determine the best way of liberating the
gold from the sulphides followed. The R&D team realised that
if flotation was used to separate the sulphides from the slurry,
and a fine-grind process was added to the circuit, the additional
gold would be accessible for extraction during the subsequent
cyanide process. A pilot project was up and running within
12 months and the positive results prompted the DRDGOLD
board to approve a capital investment amount of R250 million
for the project in February 2012.
Work on the refurbishing and construction necessary for the
project has begun under the supervision of Bruce Ebell, and
project engineer, Dean Lindecke, and implementation is due to
begin in calendar 2013.
DRDGOLD Sustainable Development Report 2012 45