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AngloGold Ashanti shrugs off flooding fears
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15th April 2005
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The liquidation of DRDGold’s North West Operations, announced towards the end of last month, could also have far-reaching consequences for another major South African mining group.

The world’s second-biggest miner, AngloGold Ashanti, last week confirmed that the provisional liquidation of DRDGold’s shafts in the North West province has increased the risk of flooding at three of its mines in the area.

It is understood that, should the pumping of underground water stop at the defunct DRDGold shafts, AngloGold Ashanti’s Vaal Reefs mines – Great Noligwa, Kopanang and Tau Lekoa – could be forced to deal with an additional 30 megalitres of water a day – a volume that AngloGold Ashanti’s current infrastructure would not be able to cope with.

Last week, the mining giant said in a statement that it is not willing to fund the additional pumping costs, said to run into some R85-million a year, should pumping operations cease.

The group stated that four mining companies operate in the Klerksdorp-Orkney-Stilfontein-Hartebeestfontein (Kosh) area: Buffelsfontein Gold Mines, which owns Hartebeesfontein gold-mine and Buffelsfontein gold-mine; Harmony Gold Mining Company; Stilfontein Gold Mining Company and AngloGold Ashanti.

“The mines not operated by AngloGold Ashanti are all updip of AngloGold Ashanti’s mines, and underground water, if not controlled, would flow down the natural dip in the underground strata into the AngloGold Ashanti mines. “Consequently, the updip mines are obliged by law to continue pumping underground water, even after their mining operations have ceased,” AngloGold Ashanti explained.

“AngloGold Ashanti is not willing to assume this liability, the cost of which we estimate at R85-million a year. “AngloGold Ashanti is already participating in the Kosh water forum, which is examining long-term solutions to the region’s water problems and will continue to do so. “We will, however, also continue to expect other mining companies to continue to meet their legal obligations. “AngloGold Ashanti takes the view that an act of liquidation cannot be used to avoid statutory obligations.” AngloGold Ashanti spokesperson Steve Lenahan told Mining Weekly that, while the cessation of pumping could have a big effect on the com-pany’s operations, he expects pumping to continue.

He would not be drawn on whether AngloGold Ashanti is currently in talks with the liquidators of the North West Operations, saying that the company is “carefully considering all its options”.

Meanwhile, DRDGold is refusing to accept any responsibility for the pumping operations, claiming that its subsidiary, Buffelsfontein Gold Mining Company, which is in provisional liquidation, is responsible for the pumping at the Buffelsfontein and Hartebeesfontein mines.

DRDGold spokesperson Ilja Graulich commented that the issue would have to be resolved between AngloGold Ashanti and the liquidators.

At the centre of the debate is whether the Companies Act, which would support DRDGold’s position, or the Mineral and Petroleum Resources Development Act, which would count against DRDGold, should take precedence.
Edited by: Martin Czernowalow


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