Three gold mines operated by world number two gold-miner AngloGold Ashanti face the prospect of flooding, if rival DRDGold doesn’t pick up the tab for the pumping of underground water from its Hartebeesfontein and Buffelfontein gold mines, which are currently shut down and in the process of being liquidated.
The three mines in South Africa are its flagship operation, Great Noligwa — which is also the largest gold producer in the AngloGold Ashanti group — and the Kopanang and Moab Khotsong mines.
The Great Noligwa and Kopanang mines produced 326 000 troy ounces of gold in the quarter ending December 2004, or a fifth of AngloGold Ashanti’s output for the three-month period.
Moab Khotsong is a new mine on which construction started in the early 1990s. The mine is expected to start producing gold in 2006 and should build up to a yearly output of 500 000 oz.
In March, DRDGold put the Hartebeesfontein and Buffelfontein gold mines into liquidation, which saw about 6 500 people lose their jobs.
“There was a meeting today between the various affected parties, including AngloGold Ashanti, and the pumps most definitely haven’t been turned off. We are going to address this jointly. The matter of the underground water is being addressed at a very high level and everything is being sorted out,” a legal spokesperson for one of the liquidators of the two gold mines said on Wednesday.
“The talk about flooding is really nothing — a storm in a teacup. The problem of flooding is a widespread problem in the gold-mining industry. A company can’t just walk away, it has to continue pumping,” a Johannesburg analyst said.
Harmony Gold recently tried to stop pumping underground water at its Randfontein 4 shaft but could not do so as it would have had an impact on the adjacent South Deep gold mine, he added.
“DRDGold still has a legal responsibility despite the fact that they have placed Harties and Buffels in liquidation. They still have a number of legal and economic responsibilities,” the analyst said.
The legal obligation to continue pumping underground water from the Hartebeesfontein and Buffelfontein gold mines will still rest with DRDGold after the liquidation of the two gold mines, AngloGold Ashanti said on Wednesday.
“AngloGold Ashanti is not willing to assume this liability, the cost of which we estimate at R85-million a year,” the group said.
Apart from the Hartebeesfontein and Buffelfontein gold mines, DRDGold in South Africa owns the Blyvooruitzicht mine and has a 40% stake in both Crown Gold Recoveries and the East Rand Proprietary Mines, which are solvent.
DRDGold also has Australasian gold mines — it wholly owns the Tolukuma mine in Papua New Guinea, and has a 45% stake in Australia’s Emperor Mines, which operates the Vatukoula gold mine in Fiji, and a 20% stake in the Porgera mine in Papua New Guinea.
All the mines not operated by AngloGold Ashanti are updip of AngloGold Ashanti mines and underground water, if not controlled, would flow down the natural dip in the underground strata into the AngloGold Ashanti gold mines, the group said.
“Consequently, the updip mines are obliged by law to continue pumping underground water, even after their mining operations have ceased,” AngloGold Ashanti said.
The obligation to continue pumping underground water arises under common law as well as the National Water Act 36 of 1998, the National Environmental Management Act 107 of 1998, the Minerals and Petroleum Resources Development Act 28 of 2002 and the Mine Health and Safety Act 29 of 1996, the group said.
AngloGold Ashanti said that in the event that the updip mines threaten to stop pumping or actually stop pumping and provided AngloGold Ashanti could show that in consequence its property may or in fact does suffer harm, there will be sufficient basis for AngloGold Ashanti to approach a court for an interdict ordering the responsible upstream mines to continue pumping activities.
DRDGold spokesperson Ilja Graulich said on Wednesday that DRDGold has no legal obligation to fund the pumping of the underground water from its former Buffelfontein and Hartebeesfontein gold mines.
Buffelfontein Gold Mines, which is the legal entity that holds the Buffelsfontein and Hartebeesfontein gold mines, has a separate legal identity from DRDGold, he added.
He referred queries regarding the pumping of the former gold mines to the liquidators.
Regarding DRDGold’s statement that it had no legal obligation to pump the two mines’ underground water after liquidation, an AngloGold Ashanti spokesperson said that the group is “considering its options”.
It has previously cost Buffelfontein Gold Mines about R60-million to R70-million a year to pump the underground water from the two mines, Graulich said.
It is estimated that the two mines, as well as the Stilfontein mine, pump about 30-million litres of water a month, he added. — I-Net Bridge