Local gold producer DRDGold CEO Niël Pretorius says the market response to the global transition to clean energy, as well as the strategy and energy plans of the company’s majority shareholder, diversified miner Sibanye-Stillwater, are important considerations in shaping DRDGold’s strategy for the future.

“Owing to the effect of cleaning up mine waste sites on groundwater quality and the rehabilitation of land, the gold we produce is probably among the greenest on the planet. Add more solar photovoltaic (PV) systems to that, and the cycle is even more complete – resulting in gold produced by cleaning up mine waste using grey water and clean power,” he enthuses.

Retreating mine waste to produce the metals used in the generation and storage of green energy is an exciting prospect, both in terms of making mining environmentally sustainable and the economic prospects of metals in the future, he adds.

He highlights DRDGold’s view that the world is starting a long cycle for these metals, driven by the global drive to convert to green energy.

Part of DRDGold’s strategy is to optimise its portfolio of assets, which involves green and sustainable energy programmes, which will be accelerated by the company’s “robust earnings” of recent years.

“State-owned power utility Eskom remains one of our biggest risks and, therefore, a large percentage of this year’s capital budget is going towards our own solar PV power generation plant and a battery storage facility at our Ergo operation, in Johannesburg.

“The value overlap in this project is as compelling as our integrated grey water circuit. Not only will it reduce operating risk and running costs, but it will also shrink our carbon footprint.”

Pretorius stresses that the impact of global warming on the climate is undeniable and has compelled the company to modify its mining methods and infrastructure to keep clean and dirty water separate.

Improved Resource Technology

The company will also invest in more technology to optimise extraction efficiencies such as closed-circuit mills at the Far West Gold Recoveries (FWGR) project, a pilot extraction plant at Ergo to test a new application of technology and an additional tailings storage facility (TSF).

The FWGR project is an asset that was acquired by DRDGold from Sibanye-Stillwater in 2018. It reached commercial production in April 2019 and a second phase of the project has been initiated. The operation includes a processing plant and a TSF.

Pretorius adds that, while investment in these technologies forms part of Phase II at FWGR, investments at Ergo are more focused on “laying the groundwork for an upgrade of our resource statement and an extension of the life-of-mine”.

The company is following a systematic and methodical approach regarding the larger and longer-term projects.

“We plan as expansively as the project dynamics would allow,” says Pretorius, citing the construction of a regional TSF designed to accommodate most remnant material on the West Rand as an example.

Pretorius adds that the regional TSF is designed beyond the deposition requirements of DRDGold’s 250-million-ton resource. It is designed and tested for feasibility at a scale that can facilitate a consolidation of the entire region’s tailings, including those of Sibanye-Stillwater’s planned uranium project at its Cooke gold and uranium mine in Randfontein, Johannesburg.

“This way, we do not spend more than what our risk appetite and capacity allow for at the onset of the project and, by investing and developing with the big picture in mind, we make sure that we stay aligned with the long-term capacity of the project. The same applies to the approach of the solar PV plant.”

Strategy

Pretorius stresses the importance of Sibanye-Stillwater’s strategy, as DRDGold features prominently in presentations that plot out Sibanye-Stillwater’s expansion plans.

In addition to independent growth, DRDGold is aligning with the strategy of Sibanye-Stillwater and leveraging Sibanye-Stillwater’s momentum.

“Our relationship with Sibanye-Stillwater adds an important new dimension to our strategy in that it provides an opportunity for intragroup growth by way of stronger alignment and integration.

“Sibanye-Stillwater is a global player that has built up a vast network in gold and platinum-group metals, and is now venturing into metals used in the generation and storage of green energy. “Our ambition is to align with this strategy and be their partner of choice to develop and allow for group capacity for the recovery of this new portfolio of metals from mine waste.”

Pretorius contends that Phase II of the FWGR project provides DRDGold with an ideal platform from which to deliver this strategy and grow this strategic alignment with the construction of a regional TSF designed to accommodate most of the remnant material on the West Rand.

This material will also include those that contain a substantial portion of Sibanye-Stillwater’s on-surface uranium resource on the Rand Uranium Surface Operation footprint.

“Our strategy has been, and remains, to deliver economic value by applying our technology, management system and skills set to reclaim and treat material at a rate and level of efficiency that delivers a competitive return to shareholders while offering them exposure to gold for as long as possible,” he concludes.