Diversified global engineering, project delivery and operations management group DRA Global’s subsidiary DRA Projects and mining services company Fraser Alexander have reached a settlement in respect of all claims between the parties, prior to the start of an arbitration hearing related to the Elikhulu gold tailings retreatment project.
DRA Projects had appointed Fraser Alexander as a subcontractor on the project.
Fraser Alexander in May 2021 initiated arbitration proceedings against DRA Projects, seeking R502-million in claims for works executed, an extension of time, preliminary charges, disruption and escalation.
Under the terms of the settlement, DRA Projects has agreed to pay Fraser Alexander R118-million.
DRA Global says the settlement is a favourable outcome for DRA as it settles a material claim, reduces litigation risk and avoids a costly arbitration process with an uncertain outcome.
DRA Global had recorded a provision of R153-million in its full-year 2021 financial statements in respect of the anticipated claims.
The group notes that the settlement does not impact Fraser Alexander’s contractual liability for latent defects.