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Full Disclosure 2016

DRDGOLD Limited's disclosure of environmental non-compliances in annual reports

2016 update

2015 company reports

DRD states as follows in its 2015 Integrated Report:

DRDGOLD did not receive any significant fines of monetary value or non-monetary sanctions for non-compliance with environmental laws and regulations.1

DRD states the following in relation to environmental incidents in the “Natural Capital Appendix” to its 2015 Annual Report:

Ergo had two reportable pipeline spillages during FY2015. The first incident was reported to the National Nuclear Regulator (NNR) and the Department of Water and Sanitation (DWS) and involved a burst pipe near Knights plant which affected a water course. The close out report has been accepted by the NNR and has been sent to DWS. The second incident was reported to the NNR and occurred near the Benoni dump. It impacted the terrestrial environment. The spill has been cleaned and is to be closed out by the NNR.2

DRD states as follows regarding compliance audits that took place during the reporting year:

  • Department of Mineral Resources (DMR) Environmental Compliance Audit for ERPM – July 2014: substantive compliance achieved.
  • DMR Environmental Compliance Audit for Crown – September 2014: our practices substantively complied with the required standards.
  • DMR Environmental Compliance Audit for Ergo – January 2015: our practices substantively complied with the required standards.
  • External Water Use Licence Audit – April 2015: 97% score achieved.
  • NNR Compliance Audit of COR57 – November 2014: 95% score achieved.3

The report states that dust is one of DRD’s main environmental concerns. DRD states that there were 31 dust exceedances during the reporting year.4 DRD states further that:

The most obvious concern for our neighbouring communities is the dust off the tailings dams or dust caused by reclamation activities. Our aim is to be open and transparent and we hold regular formal and informal meetings to keep residents of these communities, and any other parties, informed of our rehabilitation progress.5

DRD’s 2015 Annual Integrated Report states that DRD employs the following dust suppression measures:

  • water bowsers: to spray binding chemicals (e.g. RDC20) on all active haul and access roads;
  • water spraying and irrigation: on exposed mining surfaces (slopes);
  • netting: to reduce wind velocity, decrease airborne dust created from exposed surfaces, support vegetation growth;
  • vegetation: established on open surfaces of tailings dams as well as side slopes of tailings dams;
  • cladding: applied to main access roads; material suitable for dust control has been used;
  • mining methods: planned to reduce dust (e.g. sand dumps are mined into the direction of the prevailing wind to prevent open faces being exposed); and
  • research: ongoing as we search for new methods of dust suppression.6

In relation to water use management and compliance, DRD states the following in the “Natural Capital Appendix” to its 2015 Integrated Report:

The status of the Ergo’s integrated water use licences (IWUL) is as follows:

  • the Ergo WUL has been approved;
  • WUL applications for Crown, City Deep and Knights were submitted in August 2008 and are still awaiting approval. In the interim, we are legally using water under former permits;
  • an internal audit of the Ergo IWUL was conducted during FY2015 as required;
  • the DWS performed an audit during June 2014; an action plan was compiled and implemented based on the findings; and
  • an external audit of the IWUL was conducted during FY2015 which resulted in a 97% compliance score.7

In relation to the acid mine drainage challenge reported on previously by DRD, the company states in its 2015 report that:

Acid mine drainage (AMD) is a good example of both a risk and an opportunity. Although not a direct risk to a surface mining operation that is not conducting underground mining activities, it is in DRDGOLD’s best interests as a significant water consumer, and as part of risk mitigation, to co-operate with government in initiatives to contain the impacts of AMD.

DRDGOLD has therefore, for some years, collaborated with government’s agent, the Trans-Caledon Tunnel Authority (TCTA) and has placed both land and infrastructure at the latter’s disposal. This has enabled the TCTA to construct a treatment plant to pump AMD. The TCTA pump station and plant was completed in June 2014 and has been commissioned. The plant treats water to a ‘grey’ standard before releasing it into the environment.

As part of its strategy to source non-potable water, DRDGOLD has secured the right to source up to 30Ml of treated AMD a day from the TCTA facility to its operations, if required.8

2016 company reports

DRD’s 2016 Integrated Report states as follows:

Our environmental management systems and policies have been designed in compliance with South Africa’s National Environmental Management Act, 1998 (Act No 107 of 1998) and related legislation. We manage compliance with internal and external audits, recorded in a database, as well as regular meetings, which include all interested and affected parties, to determine prevention and mitigation measures. In addition, our EMP addresses all Ergo sites as one operation. It assesses the environmental impacts of mining at reclamation sites, plants and tailings deposition facilities. It also outlines details for closure, including financial provision. We are thus able to systematically audit and monitor our activities. Regulation 55 audits, in terms of the requirements of the Mineral and Petroleum Resources Development Act, 2002 (Act No 28 of 2002), are undertaken by independent consultants and submitted to the DMR as required.9

In relation to sanctions for non-compliance, DRD states as follows in its 2016 Integrated Report:

No significant fines of monetary value or non-monetary sanctions for non-compliance with environmental laws and regulations were imposed on the group in FY2016.10

DRD’s 2016 Integrated Report states as follows regarding environmental incidents:

Ergo experienced four (limited assurance) (FY2015: two (limited assurance)) reportable environmental incidents in FY2016. Two incidents were reported to the National Nuclear Regulator, which accepted the close-out reports, when pipes burst on the western and southern sides of the Elsburg Complex. In the other two incidents, reported to the Department of Water and Sanitation and the DMR, and subsequently cleaned up, slurry was released through stormwater channels at the 3L2 reclamation site and a pipe burst along Crownwood Road, south of the Crown plant.11

In relation to water use management and compliance, the report states:

Ergo, operating with an approved water use licence since 2011, recorded compliance of 89% in an audit performed by a consultant in June 2016. The Knights water use licence was approved in March 2016 and its conditions are being implemented. Ergo awaits approval from the Department of Water and Sanitation for the Crown and City Deep water use licence applications.12

The 2016 report states the following with regard to the issue of acid mine drainage reported on previously:

In 2012, after years of uncertainty, government disclosed its plan to deal with AMD. Due to the scale of the issue and the strategic significance of water as a natural resource, government decided to drive the process and appointed the TCTA, as its main contractor, to build a pump station to intercept AMD below environmentally critical level. A plant would also be built to treat water initially to “grey” or industrial quality before releasing into the natural environment.

TCTA approached DRDGOLD to collaborate in implementing its plan and, on 28 November 2012, we concluded an agreement regarding the use of land, shaft infrastructure and an electricity substation on land belonging to ERPM.

The agreement was reached as part of a joint effort “to alleviate the pollution of underground aquifers in the central Witwatersrand Basin and surface water through contact with AMD and to lay the foundation for a long-term self-sustainable solution for AMD.

The TCTA has made significant progress constructing the pump station and plant near ERPM’s South-West Vertical Shaft. It enjoys shared use of the residue pipeline installed between the Knights plant and Ergo’s tailings for the disposal of its waste by-product on to Ergo’s tailings deposition facility.

The TCTA’s pump station and plant are operational. DRDGOLD is entitled to buy up to 30Ml of greywater per day from the TCTA at cost price. The upside in reducing our water usage risk through this arrangement is considerable.

Although this arrangement is not our first choice – we maintain that the private enterprise-driven initiative provides a more cost-effective solution – we appreciate that the regulator has had to deal with a very complex set of facts and interests in determining the solution: the commercial reality of setting up a plant and infrastructure capable of dealing with the problem; society’s demands for a clean living environment; the requirements of contemporary political morality, which demands that imbalances of the past are remedied; transformation and black economic empowerment – to name a few.

It is, at the very least, a proactive, albeit somewhat belated, initiative in the hands of a contractor with a proven track record, premised on proven technology and engineering design.

We are hopeful that the project – with the interim or short-term solution fully operational since 2014 – will address the AMD issue and that the Department of Water and Sanitation will provide a sustainable long-term solution for this critical resource on which people, flora and fauna all depend. We will continue to support it.13

In relation to the challenge of dust monitoring and suppression reported on in previous years, DRD states as follows:

We achieved positive results for dust monitoring and containment – of the 1 393 measurements, 22LA exceedances (1.58%) were recorded over the entire operation. A total of 10 reportable exceedances were captured in FY2016 as these sites exceeded more than twice within a 12-month period. Details of these sites were included in quarterly dust reports sent to regulators, municipalities, and interested and affected parties.14

Full Disclosure 2015

DRD’s company reports provide some information on environmental non-compliances.

2009 company reports

In the company’s 2009 Annual Report, it was recorded that in 2006 two applications had been brought against DRD by non-profit law clinic the Legal Resources Centre on behalf of the residents of two communities situated near DRD tailings sites. It was stated that the communities sought orders for the revision of the Environmental Management Programmes of both sites and for the sites to be rehabilitated and closed.15

In the 2009 Sustainable Development Report it was noted that acid mine drainage in the Witwatersrand Basin is an environmental threat and a challenge DRD faces alongside other companies in the region, a frequently repeated statement in later reports.16

It was also recorded that during the reporting period 11 spills had occurred at Blyvooruitzicht, the volume of which was estimated to be approximately 8000 tonnes. It was stated that the spills were all on mine property and did not affect any watercourses.17

There was also one “reportable incident” when spillage control dams were breached at the Crown plant. This breach resulted in 600 tonnes of slime flowing into the Russel stream, which affected an area 30 metres long. It was stated that the area was in the process of being cleaned up.18

The quality of water discharged from underground into the Wonderfontein Spruit was also considered in the 2009 Sustainable Development Report. Figures were given for components such as suspended solids in the water and the pH level, and it was stated that the water was of “relatively good quality” (frequently restated in later reports).19

It was also noted that pending the decision of regulators on proposals regarding a water treatment plant and a pipeline, in the Western Basin water was being discharged into the Tweelopies Spruit after being only partially treated, when it still contained high sulphate levels.20

Particular attention is given in the 2009 Sustainable Development Report to the “anticipated significant impacts” on biodiversity of the Daggafontein Tailings Storage Facility. These were said to include: water quality in the Bleskbok Spruit, destruction or degradation of wetland habitat and a reduction in species diversity.21

2010 company reports

In the 2010 Annual Report it was stated that during the reporting period there had been one reportable environmental incident. It was stated that vandalism to a pipe resulted in the spillage of 1500 tonnes of slime.22

The 2010 Annual Report stated that there had been a 20% decrease (to 115) in the number of instances where levels of dust exceeded the SANS standard.23 This of course still leaves a large number of exceedances and many of DRD’s operations are in very close proximity to residential areas. There were nine complaints about dust received by Crown during the year.24

It was noted that due to concerted efforts there were no reportable slime spillages at Blyvooruitzicht.25 There were however six spills on mine property at Blyvooruitzicht which apparently did not affect any watercourses.26

The 2010 Annual Report also contained details of a civil suit brought against DRD for the pollution of peat reserves. It was noted that the action was being defended, but that the matter was suspended due to the possibility of a settlement being agreed upon.27 It appears from the 2011 Annual Report that the matter had failed to settle.28 A 2014 circular to DRD shareholders described the litigation and reported that: “(t)he parties will now apply to court for a date of hearing”, but also, “(t)he plaintiffs withdrew the action against all defendants”.29 The current status of the litigation is therefore unclear.

2011 company reports

In the 2011 financial year the company reported 16 environmental incidents. These included water pollution caused by burst pipes and storm water run-off, dust-related incidents and radiation incidents.30 Dust levels also exceeded the SANS standard on 18 occasions and complaints were received relating to dust.31

2012 company reports

In the 2012 report it was stated that five water pollution incidents had been reported to the Department of Water Affairs in the financial year, which included the contamination of the Withok River due to the failure of the Ergo residue line. This river provides drinking water for livestock and also for human consumption. A directive was issued by the Department of Water Affairs and DRD states that it spent R2.3 million repairing the damage, which gives an indication of the severity of the incident.32

There were two spillages at Crown operations and three at Ergo during the year, but the 2012 report is unclear as to whether these are the same five water pollution incidents reported to the Department of Water Affairs.33

There were also 155 instances where dust levels exceeded the SANS standard.34 The increase from 2011 was said to be due to the decommissioning of the Crown tailings facility, which led to the dust drying out when deposition stopped. It was stated that this was only a temporary situation.35

2013 company reports

In the 2013 Sustainable Development Report one of the challenges of the previous year was said to be spillage during commissioning of a new pipeline, as was dust blown from reclamation sites and the closeness of local communities.36 There were 51 dust level exceedances of the SANS standard in the 2012-2013 financial year.37

Acid mine drainage is an issue consistently reported on in DRD’s reports and associated with DRD in the media.38 Particular attention is given in each year’s annual report to the polluted water in the central basin of the Witwatersrand, which is rising year after year. It is repeatedly noted that this water cannot be allowed to rise above 150 meters below surface level, or groundwater pollution will occur.39

In 2013 it was stated that the central basin was currently flooding and water was expected to decant around the ERPM Cinderella Shaft unless preventative measures were taken. The water was said to be contaminated with metal sulphides. DRD stated that government had rejected the proposal submitted jointly by a number of mining companies, including DRD, to contain the problem.40 This rejection has been associated with some controversy.41

In the company’s 2013 Annual Report DRD also stated that progressive flooding could eventually cause the discharge of acid mine drainage at the surface and into local water sources and also that “estimates of the probable rate of rise of water are contradictory and lack scientific support”.42

It was also reported in the 2013 report that there were two spillage incidents, one at Crown and one at Ergo.43 At Ergo there were also two pollution incidents due to pipe bursts and dam overflows.44

2014 company reports

The 2014 Integrated Report stated that an audit had been carried out by the Department of Water and Sanitation in June 2014 and that some “minor findings were established”.45

Two dust complaints were received during the financial year46 and there were 27 dust exceedances (no detail is provided on what limit the exceedances related to).47

Included under a list of “challenges” experienced during the year was “spillage from burst pipelines”.48

In relation to the acid mine drainage problem, the 2014 report stated that in the central basin of the Witwatersrand, the water level had risen to 120 meters below surface (i.e. above the 150 meter limit reported in the 2012 report as the level beyond which the water could not be allowed to rise).49 It was reported that government authorities are implementing a solution to the problem and had appointed the Trans Caledon Tunnel Authority as the main contractor to implement the plan. Water will be treated to a “grey” (industrial) standard before being released to the environment.50

In its 2014 Annual Report DRD reported that “WUL applications for Crown, City Deep and Knights are still awaiting approval.” This statement is contrary to the information provided by the Minister of Water and Sanitation (see below), which confirms that as of the end of July 2014, some DRD operations had not even submitted applications for WULs.51

In a response to a parliamentary question, the Minister of Water and Sanitation stated that as at 25 July 2014, ‘Crown Gold Recoveries’ and ‘Crown Mine: Ergo Mine Knights’, both DRD operations, were operating without water use licences and no applications for authorisation had been received by the Department of Water and Sanitation. The application for authorisation submitted by a mining operation called ‘Knights Gold’ in Gauteng was reportedly in process, as was that of another unnamed DRD mine.52

Another 2014 parliamentary reply also listed ‘Crown Gold Recoveries’ and ‘Crown Mine: Ergo Mine Knights Section’ as not having applied for WULs, and stated that in relation to both operations investigations had been conducted, and that in relation to ‘Crown Gold Recoveries’, a Notice of Intention to Issue a Directive had been issued.53

  1. DRDGold Limited Integrated Report 2015, at p29.
  2. Appendix 2 to DRDGold Limited Integrated Report 2015, at p1.
  3. Appendix 2 to DRDGold Limited Integrated Report 2015, at p5.
  4. DRDGold Limited Integrated Report 2015, at p30.
  5. Appendix 2 to DRDGold Limited Integrated Report 2015, at p1.
  6. DRDGold Limited Integrated Report 2015, at p29.
  7. Appendix 2 to DRDGold Limited Integrated Report 2015, at p5.
  8. DRDGold Limited Integrated Report 2015, at p31.
  9. DRDGold Limited Integrated Report 2016, at p41.
  10. DRDGold Limited Integrated Report 2016, at p41.
  11. DRDGold Limited Integrated Report 2016, at p43.
  12. DRDGold Limited Integrated Report 2016, at p43.
  13. DRDGold Limited Integrated Report 2016, at p44.
  14. DRDGold Limited Integrated Report 2016, at p45.
  15. DRDGOLD Annual Report 2009 at p113, available at http://www.drd.co.za/assets/files/annual/ar_2009/files/DRDGOLD_AR2009.pdf
  16. DRDGOLD Sustainable Development Report 2009 at p7, available at http://www.drdgold.com/assets/sustainability/reports/2009/DRDGOLD_SD2009.pdf
  17. DRDGOLD Sustainable Development Report 2009 at p35, available at http://www.drdgold.com/assets/sustainability/reports/2009/DRDGOLD_SD2009.pdf
  18. DRDGOLD Sustainable Development Report 2009 at p36, available at http://www.drdgold.com/assets/sustainability/reports/2009/DRDGOLD_SD2009.pdf
  19. DRDGOLD Sustainable Development Report 2009 at p38, available at http://www.drdgold.com/assets/sustainability/reports/2009/DRDGOLD_SD2009.pdf
  20. DRDGOLD Sustainable Development Report 2009 at p39, available at http://www.drdgold.com/assets/sustainability/reports/2009/DRDGOLD_SD2009.pdf
  21. DRDGOLD Sustainable Development Report 2009 at p45, available at http://www.drdgold.com/assets/sustainability/reports/2009/DRDGOLD_SD2009.pdf
  22. DRDGOLD Annual Report 2010 at p29, available at http://www.drd.co.za/assets/files/annual/ar_2010/f/DRDGOLD_AR2010.pdf
  23. DRDGOLD Annual Report 2010 at p29, available at http://www.drd.co.za/assets/files/annual/ar_2010/f/DRDGOLD_AR2010.pdf
  24. DRDGOLD Sustainable Development Report 2010 at p41, available at http://www.drd.co.za/assets/sustainability/reports/2010/f/DRDGOLD_SD2010.pdf
  25. DRDGOLD Annual Report 2010 at p29, available at http://www.drd.co.za/assets/files/annual/ar_2010/f/DRDGOLD_AR2010.pdf
  26. DRDGOLD Sustainable Development Report 2011 at p40, available at http://www.drd.co.za/assets/sustainability/reports/2011/downloads/DRDGOLD-sustainable-development-report-2011.pdf
  27. DRDGOLD Annual Report 2010 at p124, available at http://www.drd.co.za/assets/files/annual/ar_2010/f/DRDGOLD_AR2010.pdf
  28. DRDGOLD Annual Report 2011 at p155, available at http://www.drd.co.za/assets/files/annual/ar_2011/downloads/DRDGOLD-annual-report-2011.pdf
  29. Circular to DRDGold shareholders, Date of issue: 6 May 2014, at p16, available at http://www.drd.co.za/investors-and-media/circulars/drd-gold-circular_6may14.pdf
  30. DRDGOLD Sustainable Development Report 2011 at p37, available at http://www.drd.co.za/assets/sustainability/reports/2011/downloads/DRDGOLD-sustainable-development-report-2011.pdf
  31. DRDGOLD Sustainable Development Report 2011 at p42, available at http://www.drd.co.za/assets/sustainability/reports/2011/downloads/DRDGOLD-sustainable-development-report-2011.pdf
  32. DRDGOLD Sustainability Report 2012 at p35, available at http://integrated-report.com/drdgold/sd-2012/downloads/DRDGOLD-sustainable-development-report-2012.pdf
  33. DRDGOLD Sustainability Report 2012 at p40, available at http://integrated-report.com/drdgold/sd-2012/downloads/DRDGOLD-sustainable-development-report-2012.pdf
  34. DRDGOLD Sustainability Report 2012 at p40, available at http://integrated-report.com/drdgold/sd-2012/downloads/DRDGOLD-sustainable-development-report-2012.pdf
  35. DRDGOLD Sustainability Report 2012 at p40, available at http://integrated-report.com/drdgold/sd-2012/downloads/DRDGOLD-sustainable-development-report-2012.pdf
  36. DRDGOLD Sustainability Report 2013 at p46, available at http://drdgold.integrated-report.com/2013/sd/download/DRDGOLD-sustainable-development-report-2013.pdf
  37. DRDGOLD Sustainability Report 2013 at p50, available at http://drdgold.integrated-report.com/2013/sd/download/DRDGOLD-sustainable-development-report-2013.pdf
  38. http://earthlife.org.za/2010/01/latest-acid-mine-drainage-crisis-calls-for-a-constructive-response-from-civil-society/ (last accessed on 7 August 2015).
  39. DRDGOLD Sustainability Report 2012 at p41, available at http://integrated-report.com/drdgold/sd-2012/downloads/DRDGOLD-sustainable-development-report-2012.pdf
  40. DRDGOLD Sustainability Report 2013 at p50, available at http://drdgold.integrated-report.com/2013/sd/download/DRDGOLD-sustainable-development-report-2013.pdf
  41. http://www.miningmx.com/news/gold_and_silver/WUC%20to%20list%20as%20acid%20water%20issue%20burns%20DRDGold.htm (last accessed on 7 August 2015).
  42. DRDGOLD Annual Report 2013 at p30, available at http://drdgold.integrated-report.com/2013/download/DRDGOLD-integrated-report-2013.pdf
  43. DRDGOLD Sustainability Report 2013 at p50, available at http://drdgold.integrated-report.com/2013/sd/download/DRDGOLD-sustainable-development-report-2013.pdf
  44. DRDGOLD Sustainability Report 2013 at p51, available at http://drdgold.integrated-report.com/2013/sd/download/DRDGOLD-sustainable-development-report-2013.pdf
  45. DRDGOLD Integrated Report 2014 at p69, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  46. DRDGOLD Integrated Report 2014 at p69, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  47. DRDGOLD Integrated Report 2014 at p71, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  48. DRDGOLD Integrated Report 2014 at p74, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  49. DRDGOLD Integrated Report 2014 at p79, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  50. DRDGOLD Integrated Report 2014 at p79, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  51. DRDGOLD Integrated Report 2014 at p72, available at http://www.drd.co.za/investors-and-media/annual-reports/2014/DRDGOLD-integrated-report-2014.pdf
  52. Question No. 1716, Date of publication in internal question paper: 19 September 2014, available at https://www.dwa.gov.za/communications/Q&A/2014/NA%201716.pdf
  53. Question No. 735, Date of publication in internal question paper: 25 July 2014, at p5, available at https://www.dwa.gov.za/communications/Q&A/2014/NA%20735.pdf