DRDGold Ltd. (DRD:US) agreed to allow South Africa’s water infrastructure authority to access its land to build a pipeline and plant for treating acid discharged from derelict mines that’s contaminating Johannesburg groundwater.
The Trans-Caledon Tunnel Authority SOC Ltd., which builds dams and tunnels to supply water to South African factories and mines, will have access to DRDGold’s land and a shaft to build the plant, the gold mining company said in a statement. The state agency will also be allowed to build a pipeline on the land and use one of the company’s sludge dams, it said.
“While these heads of agreement should not be seen as an unqualified endorsement of the state’s acid mine drainage solution, and do not affect our right to either challenge future directives or to implement our own initiatives should it become necessary, they are an encouraging development,” Chief Executive Officer Niel Pretorius said in the statement.
The government wants mining companies to help pay to treat acid water oozing from derelict gold mines around Johannesburg. While the authority plans to treat the water, it hasn’t found a way to pay for maintaining the plants, Zodwa Mbele, executive manager for project finance and treasury, said on Oct. 1.
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