Sustainable Development Report 2011 Scope and boundary of the report
This sustainable development report addresses DRDGOLD Limited’s (DRDGOLD or the company) performance in the areas of governance, economic performance, safety, health, community development, the environment and stakeholder engagement for the year ended 30 June 2011. Therefore, information in this report pertains to FY2011, the period from 1 July 2010 to 30 June 2011. DRDGOLD’S previous sustainable development report was released in October 2010.
The sustainable development report has been compiled in line with the G3 Guidelines of the Global Reporting Initiative (G3.1) and the Broad-based Socio-economic Empowerment Charter for the South African Mining Industry (the Mining Charter). This report has been checked by GRI to confirm DRDGOLD’s Self-declaration of a C-level report (see page 46 for the GRI application level check statement).
This report covers all operations managed by DRDGOLD, namely: Blyvooruitzicht Gold Mining Company Limited (Blyvoor) Ergo Mining Operations (consisting of Ergo Mining Operations (Proprietary) Limited (formerly known as DRDGOLD South African Operations (Proprietary) Limited) and its subsidiaries, Crown Gold Recoveries (Proprietary) Limited (Crown), ErgoGold, Ergo Mining (Proprietary) Limited (Ergo JV) and East Rand Proprietary Mines Limited (ERPM).
With respect to the company’s activities, it should be noted that: during the period under review, DRDGOLD announced a change in its group structure in order to better distinguish between its surface retreatment and underground operations. Ergo Mining Operations now controls the DRDGOLD surface operations – Ergo which consists of ErgoGold and Ergo Mining (Ergo JV), and Crown which includes ERPM’s Cason surface retreatment operations.
For more information on sustainability reporting in DRDGOLD, please contact:
Barry de Blocq Tel: +27 11 470 2600 Fax: +27 11 470 2618 Email: [email protected] Highlights
• Dividend up by 50% to • Fatal Injury Frequency Rate improves by 64% 7.5 cents to 0.04
• Total economic value distributed 20% higher • 6 875 people employed R793.0 million • Spend on socio-economic development 198% higher at • Employees and contractors receive R759 million R15.8 million in salaries and benefits
Contents
Scope and boundary of the report IFC Community development 31 Corporate profile and structure 2 Product responsibility 33 Our business 4 Environmental performance 35 Letter from the CEO 5 Reporting in line with GRI 44 Stakeholder engagement 8 GRI application level check statement 46 Corporate governance 10 Mining Charter compliance 47 Economic performance 14 Glossary of terms and acronyms 48 Safety, health and employee well-being 18 Contact details and administration IBC Employment and human rights 26
DRDGOLD Sustainable Development Report 2011 1 Corporate profile and structure
Location of operations and exploration projects Zimbabwe
Ascot Harare Leny Johannesburg Benoni Hwange Brakpan Zhombe John Bull Mutare Gweru Carletonville Crown Bulawayo ERPM Ext 1 & 2 Nigel Ergo
Blyvoor Vereeniging Potchefstroom
Klerksdorp
Gauteng North West Pretoria
Johannesburg
Carletonville
Klerksdorp
Bloemfontein South Africa
LEGEND: Cities and towns Operations Exploration projects 50km
Our strategy DRDGOLD’s strategy in the short- and medium-term is to enhance shareholder value by:
reducing risk; controlling costs; Geographical analysis of managing margins; and shareholders (%): taking a disciplined approach to growth. 30 June 2011 United States 62.2 Increasingly, the focus is on the recovery of lower-risk, South Africa 20.8 Europe 16.5 lower-cost, higher-margin ounces. Other countries 0.5
2 DRDGOLD Sustainable Development Report 2011 DRDGOLD is a South African-based, medium-sized, unhedged gold company which has made a strategic shift in the past few years to lower-risk, lower-cost, higher-margin retreatment production.
DRDGOLD is a medium-sized, unhedged gold producer, retreatment (reported under Crown) and ERPM Extension 1 South Africa’s fourth-largest in terms of production. and 2 exploration tenements with an estimated resource of In FY2011, the company produced 265 179oz (FY2010: 241 194oz) 18.3Moz. and declared attributable Mineral Resources of 60.2Moz (FY2010: 60.0Moz) and attributable Mineral Reserves of 7.3Moz (FY2010: DRDGOLD is also a 50% partner in an early-stage gold exploration 7.3Moz). project on Zimbabwe’s Greenstone Belt.
DRDGOLD’s black economic empowerment partners are Khumo At the end of June 2011, DRDGOLD employed 6 875 people (5 160 Gold SPV (Proprietary) Limited (Khumo Gold) and the DRDSA employees and 1 715 contractors). Empowerment Trust, which hold 20% and 6% respectively in DRDGOLD’s operating subsidiaries, Ergo Mining Operations and With its head office in Johannesburg, DRDGOLD has its primary Blyvoor. listing on the JSE Limited and its secondary listing on the Nasdaq Capital Market.The company’s shares are also traded on the Marché DRDGOLD’s operations are: Libre in Paris, the Regulated Unofficial Market of the Frankfurt Stock Blyvoor – underground mining, surface tailings retreatment; Exchange, the Berlin and Stuttgart OTC markets, as well as on Ergo – surface tailings retreatment; Euronext Brussels in the form of International Depositary Receipts. Crown – surface tailings retreatment; and At year-end, the company had 384 884 379 ordinary shares in issue ERPM – underground mining discontinued, surface tailings and a market capitalisation of R1.3 billion ($186.3 million).
DRDGOLD group structure �
DRDGOLD 74% 74% 35%
Khumo Gold DRDSA 20% 20% Ergo Empowerment Blyvoor Mining Trust 6% DRDSA 6% Operations Empowerment Trust 100% 100%
Crown ERPM
50% 50% 65%
Ergo Mining ErgoGold
DRDGOLD Sustainable Development Report 2011 3 Our business
Transport of material
Underground ore is transported to the plant via conveyor belts and trucks. With regard to retreated material, the re-pulped sand and slime is pumped to the plant.
Processing
Ore from underground is broken up into small particles to exposed the mineral through a combination of multi-stage crushing and open-circuit, primary and closed-circuit, secondary milling.
The gold extraction technique is known as the carbon-in-pulp (CIP) process which involves hydro cyclones, thickening and cyanide leaching. Granular activated carbon particles, which are much larger than the ground ore particles, are added to the cyanidation pulp when the gold is in solution. The activated carbon and pulp are agitated together to enable the gold to be adsorbed onto the activated carbon. The loaded activated carbon is mechanically screened to separate it from the barren ore pulp.
Exploration With the carbon-in-leach (CIL) process, used at the three Crown- plants and the Ergo plant, gold ore, carbon granules and cyanide DRDGOLD’s exploration activities are focused on the extension of are mixed together to form a slurry. The cyanide dissolves the existing orebodies and the identification of new orebodies both gold content and the gold is adsorbed on the carbon: the carbon at existing and undeveloped sites. Once an orebody has been discovered, exploration is expanded and intensified in order to is subsequently separated from the slurry for further gold removal. enable clearer definition of the orebody and the portions with the potential to be mined. After the CIP or CIL process, the gold is recovered through electro- winning and then smelted into doré bars. Surface retreatment Refining Ergo Mining Operations, which includes DRDGOLD’s Crown, ERPM and Ergo operations, retreats tailings (sand and slime) from non- The gold bars produced consist of approximately 85% gold and 7%- operational sites. To a certain extent, retreatment also forms part 8% silver, with the balance comprising copper and other common of Blyvoor’s operations. elements. The gold bars are transported to Rand Refinery Limited in Germiston, Gauteng, for assaying and final refining. The gold is Surface material has a history of deposition occurring at different purified to 99.9%, therefore meeting the standards of the London stages. This means that there are grade variations associated with Bullion Market Association, and cast into troy ounce bars of varying improvements in plant recovery over the period of time in question. weights. On the same day as the delivery takes place, Rand Refinery sells the gold on DRDGOLD’s behalf at the London afternoon fixed Sand is reclaimed using mechanical front-end loaders and re-pulped dollar price. with water. Slime is reclaimed using high-pressure water monitor guns. Rehabilitation
Mining When mining is completed, operations are closed and rehabilitated Blyvoor accesses the orebody through underground mining. The which means that land is ultimately returned to a productive state. shaft system comprises vertical and sub-incline shafts which are All of DRDGOLD’s operations have updated closure plans, and used for the conveyance of employees, material, pumping and closure liabilities associated with environmental issues for each hoisting of mined ore and waste. operation are reassessed on an annual basis.
4 DRDGOLD Sustainable Development Report 2011 Letter from the CEO
Niël Pretorius
Dear stakeholder
DRDGOLD has – over the past decade – transformed itself from Our first Integrated Annual Report, which covers the key what was largely a deep level underground mining company financial, operational, risk and sustainability issues facing the to a company whose future lies – ironically – in the past and, in company. This is our first step towards integrated reporting, and particular, in the approximately 50-year resource offered in the in this report we have endeavoured to address the context of recovery of gold from the Witwatersrand’s many surface dumps. the group – in the year that has past and the future, and the opportunities and challenges we face, so that shareholders and DRDGOLD today is a company in two parts: other stakeholders have a better and fuller understanding of the The deep-level and labour intensive Blyvoor operations. group, and can make informed decisions about their association While we have made it clear that this entity no longer fits within with us. our long term strategy, we have a responsibility of stewardship to This Annual Sustainable Development Report, which addresses either see this operation into the hands of a responsible operator, the most significant environmental, social and governance or to bring it back to profitability ourselves. See page 11 for issues facing the company. This report has been produced further details. Concomitant with this economic responsibility is in accordance with the Global Reporting Initiative (GRI) G3 the responsibility to Blyvoor’s employees and their families, our guidelines. While we have not sought external assurance of suppliers and the communities around this operation, not only our key performance indicators during the year under review, to preserve and sustain jobs, but also towards the current and legacy environmental role associated with this mine. we are considering this as part of an annual integrated audit Surface operations, at Crown and Ergo, which has significantly and commit to achieving this by the 2013 financial year. As is lowered the risk associated with the business, and is turning to required by GRI, we have declared a C level of reporting and this account a valuable, shallow resource while at the same time reporting application level has been verified by the GRI for the cleaning up historical environmental hazards and releasing first time (see page 46). Our GRI content index appears on page valuable land for development. 44, and our Mining Charter reporting compliance index is on page 48.
Our approach to reporting We recognise too that our employees, as important stakeholders, should also be informed of the integrated performance of the As a group we communicate extensively with all stakeholders, company during the year under review, and we have produced a informally and formally. These stakeholders include, among others, special edition of our employee newsletter, Asikhulume, to do this. shareholders, employees, unions, communities, government and regulators and non-governmental organisations (NGOs). Safety remains a priority Our approach to reporting has continued to develop and grow - both to improve our level of disclosure, and to reach our stakeholders We continue to strive for zero harm at our operations and it is in a way that is most accessible and meaningful to them. For this with deep regret that we report the death of Mr Hugh du Plooy on financial year, we have produced: 29 December 2010. Mr du Plooy was taken ill while conducting a
DRDGOLD Sustainable Development Report 2011 5 preliminary safety inspection underground and his death has been highlights the need for safety to be top of mind at all times, at work, ruled as a mine accident until such time as the autopsy report is on the way to and from work, and at home. made available. The board and management extend their sincere condolences to his family and colleagues. Our people and our communities While our FIFR continued to improve to 0.04 per million hours A number of other initiatives bear special mention: worked, from 0.11 per million hours worked in FY2010, we continue to strive for a working environment without fatal accidents. The first relates to our ever-increasing awareness of risk management, Regrettably, the group’s LTIFR rose, from 9.08 per million hours and the need to address risks in an integrated and holistic manner. worked, to 16.36 per million hours worked. This reflects the Critically, given that our surface operations are in close proximity increasing risk of seismicity-related accidents at Blyvoor, an issue to communities – both formal and informal – and scattered, this that continues to receive significant attention. will require much greater engagement with stakeholders on safety and environmental issues.This is an area that will receive far greater It is also appropriate to record that on 18 March 2011, 26 people attention in the year ahead. were injured and eight died when a bus, operated by a transport A second issue relates to the way in which we manage people – the company under contract to the mine, was transporting day shift human capital within our business. We have launched the Vuselela workers from the mine hostels at Blyvoor to No 4 Shaft.The accident initiative during the year, a programme aimed at developing the occurred in the early morning hours when the driver of the bus lost full potential of the employees, harnessing not just their physical control of the vehicle and the vehicle overturned. The injured were strength but also their intellectual capacity, and this is something taken to hospitals in Carletonville, Potchefstroom, Krugersdorp, that we will be paying more attention to in the year ahead. Randfontein and Johannesburg. We extend our sincere condolences to the families, friends and colleagues of those who died. We also This initiative is an important component of workplace extend our gratitude to those who provided assistance, in particular alignment and harmony. Cultural ambiguity remains particularly the staff of the South African Police Service, traffic authorities and in communications, and when one considers that we work in a the numerous emergency services and hospitals.While this was not country with 11 official languages, and firmly entrenched cultures a mining related accident, it is one which we take very seriously and one can start to see the enormity of this issue.
6 DRDGOLD Sustainable Development Report 2011 This might be a trite thing to say but I think we need greater We have made some progress in respect of offering a solution alignment of the ambitions of our employees with the ambitions to acid mine drainage having recently had the opportunity to of the business. If the company succeeds, our employees succeed. engage at the highest level of Parliament and the WUC proposal advocated by MIG was considered by the Portfolio Committee. Further, I would like to see greater social awareness within It is however disappointing to report that this solution was also the business, and a clear understanding that we are part of and rejected. See page 40. responsible to a larger community. We have developed a good Increasing recoveries through technological innovation is a key platform for our operations to take direct responsibility for their ambition for the company, and one that could further transform community and local economic development initiatives so as to the life and value of our Crown and Ergo operations. While we improve the circumstances of surrounding communities, or at least are still in the early phase of development, our research has align those communities with our company. I would like to see an established that the majority of inert gold is embedded in larger acceleration of that – greater social awareness and also greater fraction sulphate particles, and we believe that we have found involvement in the community. a method to float these particles off and create a concentrate. That concentrate goes through a vertical mill and that improves the recovery of gold from sulphates from 44% to 73%. This Material issues process improves the overall recovery of gold by almost 30%, In developing this report we have tried to address those issues that conservatively, 25% so the 140kg a month circuit becomes a are most important to the business, in the year that has past and 186kg a month circuit. In addition to that, most of the uranium in the future. also finds its way into this concentrate and you can extract the uranium at an efficiency of 20% in the resin-pulp-process which In identifying these material issues we: is much cheaper than the sulphuric acid process. Because you reviewed media coverage of the company; are using a cheaper plant and are getting 7% more, the viability gathered feedback from shareholders – formally and informally; threshold is a lot lower than it was previously. took consideration of issues raised by employees and unions Our exploration projects in Zimbabwe – we recently secured through on-mine engagement processes; a second 20 000-hectare exploration site near Bulwayo – look considered issues raised by NGOs ( for e.g. The Federation for a promising. Sustainable Environment); and considered issues raised by the Chamber of Mines through The changing goal posts that are presented by the new Mining lobbying processes. Charter represent new hurdles for the company, some impractical, and another layer of costs.Take the employment equity component The issues identified include: for example - 40% of our management team are historically Consistency of regulatory policy and succession at the DMR. disadvantaged South Africans yet – at a level below this - we cannot Material changes to the Mining Charter have a real and attract sufficient professionals such as metallurgists, engineers, detrimental impact on the way in which we run the business, accountants – to the business at a cost that we can afford. There is and associated costs. Similarly, unambiguous application of simply a dearth of skills in the marketplace, and HDSA skills attach legislation and capacity to grant and monitor permitting are a sometimes unaffordable premium. critical to the success of our industry. Costs and, particularly labour-related costs. In a country whose government’s stated primary objective is to create jobs, it In conclusion seems unreal that the unemployed are disempowered to set I hope that the report that follows will provide our stakeholders wages, and that labour costs continue to rise at a rate far higher with interesting and useful information on the group, the way we than inflation. Labour makes up 35% of our costs so this has a work, and our plans for the future, not just in the business, but as material impact on the sustainability of the business, particularly a responsible corporate citizen. We welcome your feedback and at an operation such as Blyvoor. questions. Our significant exposure to our US shareholder base gives us good insight into the hugely detrimental impact that the spectre of nationalisatiion has had on South African mining equities. The fact that there has not been an unequivocal rejection of this by the governing party is a significant issue of concern. I have always said that we need to plan and manage our business according to today’s gold price in today’s market and not in anticipation of an increase. However, the reality is that if the dollar does not decrease further in value, the bull run on gold is probably going to run out of steam at some point or another. The security of energy supply is another critical factor, Niël Pretorius particularly at Blyvoor. It is very difficult to plan production in an Chief Executive Officer underground environment without a steady supply of electricity. We lose two or three shifts a month because of interruptions. 19 September 2011
DRDGOLD Sustainable Development Report 2011 7 Stakeholder engagement
Management approach Economic Development Plans (LEDPs) of local municipalities in compliance with the requirements of South African mining DRDGOLD endeavours to report timeous, relevant and meaningful legislation. Apart from formal consultations with interested and information to all stakeholders. The company gives substance to its affected parties, operational management has regular, formal and commitment to transparency through the implementation of an informal interaction with its surrounding communities. integrated and sustained programme of communication directed at its various stakeholders including shareholders, employees, unions, The company is in regular contact with shareholders and communities, government and regulators and non-governmental organisations (NGOs). other members of the investment community. DRDGOLD’s communication activities with its shareholders are premised on a In respect of its relations with employees and employee clear understanding that shareholders wish to maximise returns representatives, DRDGOLD has formal and informal employee on their investment and that, in order to do this, they and/or their participation structures in place at its operations to deal with a investment advisers require equitable, timely access to operating, broad range of issues. The company actively encourages open financial and other information. communication, consultation and the identification and resolution of conflicts through workplace forums. A quarterly newsletter, Listed on page 9 are the main stakeholders identified by DRDGOLD, Asikhulume, is used to communicate company affairs to employees their key concerns and the process DRDGOLD follows when of all DRDGOLD operations. Highly visible campaigns are also used engaging with these. In identifying its stakeholders, DRDGOLD to keep employees up to speed with issues that directly impact on developed a matrix of those groups/individuals who are directly the company’s performance. and indirectly associated with the company. The former includes DRDGOLD is involved in the communities in which it operates employees, shareholders suppliers, unions and neighbours. Indirectly and Social and Labour Plans (SLPs) have been aligned to the Local affected stakeholders include community members.
8 DRDGOLD Sustainable Development Report 2011 Stakeholder group Key topics and concerns Engagement process
Shareholders and investors Operating and financial performance Annual general meetings Share price performance and dividends Road shows Issues relating to the overall sustainability of One-on-one investor meetings the company, in particular: Preliminary and annual results presentations – risk mitigation Investor site visits – nationalisation Company announcements – safety Company website Annual reports Sustainable development reports
Customers Consistency in supply Formal presentations Quality of supply Website Road shows Company announcements Company reports Site visits
Employees Job security Company policies Training and development Collective bargaining practices Remuneration Team briefings Health and safety Two-way manager-employee communication Asikhulume Campaigns: – recruitment – HIV/AIDS – education – performance
Suppliers and contractors Sustainability of company Company practices and policies Company’s financial performance Preferential procurement programmes Employment practices Open days Local procurement practices Dialogue Business training and support Quality control Preferential procurement practices
Government and regulating Licence to operate Formal processes authorities Employment Participation in industry associations Education and training Social and labour plans Local economic development programmes Dialogue Environmental impact and rehabilitation Company reports Open days Site visits
Communities and NGOs Local economic development Community forums Employment and local job creation Stakeholder forums Corporate social investment practices Industry partnerships Health-related issues, in particular HIV/AIDS Community engagement programmes Environmental impact and rehabilitation Wellness campaigns, in particular HIV/AIDS Skills development programmes awareness Dialogue Company announcements Advertising in local newspapers
Media Financial results Company announcements Corporate activity Company website Environmental issues Online presentations Marketing Media site visits Community-related topics Company reports Interviews Articles in local publications
DRDGOLD Sustainable Development Report 2011 9 Corporate governance �
Management approach
DRDGOLD’s Board of Directors (board) ensures that the principles stakeholders alike. DRDGOLD has set up systems and controls to of good corporate governance are upheld and implemented. All the promote discipline, transparency, accountability, responsibility directors are fully aware that they are the custodians of corporate and fairness for the protection of the interests of shareholders, governance in the organisation and this is reflected in the way they employees and the communities in which the company operates. execute their fiduciary duties, which is with diligence, integrity and honour. The intention is that this filters down to all employees. The This section of the report should be read in conjunction with upholding of such ideals puts the company in a position to improve the corporate governance section on the DRDGOLD website at organisational performance and deliver value to shareholders and www.drdgold.com.
Corporate governance structure Board of Directors
Non-executive directors Chairman Executive directors
J Turk G C Campbell (non-executive director) D J Pretorius
E A Jeneker C C Barnes
R P Hume
10 DRDGOLD Sustainable Development Report 2011 Board Committees
Transformation Nominations Remuneration and Sustainable Audit Committee Committee Committee Risk Committee Development Committee R P Hume (chairman) G C Campbell (chairman) E A Jeneker (chairman) D J Pretorius (chairman) E A Jeneker (chairman)
G C Campbell R P Hume G C Campbell G C Campbell D J Pretorius
E A Jeneker R P Hume R P Hume C C Barnes
J Turk E A Jeneker
J Turk
C C Barnes
Compliance The new Companies Act DRDGOLD’s primary listing is on the JSE Limited, and the company The new South African Companies Act (Act No 71 of 2008) which complies in the first instance with the JSE Listings Requirements. Its was promulgated on 1 May 2011 has changed the corporate business secondary listing is on the Nasdaq Capital Market and the company landscape markedly. The company has put in place plans to convert is registered with the Securities and Exchange Commission (SEC) the Transformation and Sustainable Development Committee into in the United States of America. Accordingly, DRDGOLD is subject the Social and Ethics Committee and has converted its Memorandum to compliance with the Sarbanes-Oxley Act of 2002 (SOX) and to of Association and Articles of Association into a Memorandum of certain Nasdaq Rules. Incorporation. DRDGOLD is fully committed to completing the legislated changes within the designated window periods and has Integrated reporting and King III already made use of the Act’s business rescue proceedings article in terms of Chapter 6 of the Companies Act to reduce the extent to DRDGOLD is fully committed to timeous, relevant and transparent which the company and its shareholders are exposed to risks related communication of issues relevant to all stakeholders, and is to its Blyvoor underground mining operation. committed to observing the provisions of the King Report on Corporate Governance for South Africa (the King III Report). Restructuring of separate surface The King III Report came into effect on 1 March 2010. It replaces the King II Report as a codified body of principles which is intended treatment and underground mining to serve as a guideline for the enhancement of high standards of interests corporate governance. It adopts an ’apply or explain’ approach On 14 January 2011, DRDGOLD announced a change in its to corporate governance in contrast to the ’comply or explain’ group structure in order to better distinguish between its approach that was adopted by the King II Report. The ’apply or surface retreatment and underground operations. In terms of explain’ approach implies that the board, in its collective decision- this restructuring, operating subsidiary DRDGOLD South African making, may conclude that, to follow a practice recommended Operations (Proprietary) Limited changed its name to Ergo Mining in King III would not, in particular circumstances, be in the best Operations (Proprietary) Limited (Ergo Mining Operations) and interests of the company. In these circumstances, the board can controls the DRDGOLD surface operations with the exception of decide to apply the recommendation differently or apply another the surface operation of Blyvoor. Ergo Mining Operations therefore practice and still achieve the objective of the overarching corporate controls Ergo Mining (Proprietary) Limited (Ergo JV), Crown Gold governance principles of fairness, accountability, responsibility Recoveries (Proprietary) Limited (Crown), ErgoGold, and East and transparency. In essence, the explanation or rationale of the Rand Proprietary Mines Limited (ERPM). In addition, Blyvoor, application or otherwise of the principles and recommendations of primarily an underground mining operation previously held 100% the King III Report constitutes compliance with King III. by DRDGOLD SA, is now directly held by DRDGOLD (74%), DRDGOLD complied substantially with the King III Report during Khumo Gold (20%) and the DRDSA Empowerment Trust (6%). the year under review. A more detailed account of DRDGOLD’s This restructuring enables the company to maximise shareholder approach to the adoption of the King III Report is available on value through the development of separate investment page 48 of the DRDGOLD Annual Integrated Report 2011. opportunities.
DRDGOLD Sustainable Development Report 2011 11 Corporate governance continued
Significant legal issues or fines Sustainability leadership DRDGOLD did not incur any material fines during the year under The board established the Transformation and Sustainable review in respect of non-compliance with laws and regulations. Development Committee (Transco) for DRDGOLD to be able to achieve the triple bottom line espoused in the King III Report and in order to reach the empowerment goals to which this South African- Leadership and oversight by the board based company is committed. The board is responsible for setting the direction of DRDGOLD through the establishment of strategic objectives and key policies. The objectives of this committee are to: It monitors the implementation of strategies and policies through a promote transformation within the company and economic structured approach to reporting on the basis of agreed performance empowerment of previously disadvantaged communities, criteria and defined, written delegations to management for the particularly within the areas where the company conducts detailed planning and implementation of such objectives and business; policies. strive towards achieving the goal of equality, as required by the South African constitution and other legislation and within the The board currently comprises two executive directors and four context of the demographics of the country, at all levels in the non-executive directors. The board charter sets out the directors’ company and its subsidiaries; and responsibilities and serves as a standing guideline for the benefit conduct business in a manner that is conducive to the of directors. attainment of internationally acceptable environmental and sustainability standards. The majority of DRDGOLD’s directors are independent in accordance with the JSE Listings Requirements. In February 2005, DRDGOLD Transco is chaired by an independent, non-executive director and appointed Mr Campbell as the independent non-executive chairman met each quarter during the year. of the board. The appointment of an independent chairman is in full compliance with the King III Report’s recommendations. Sustainability issues also fall within the ambit of the Audit, As Mr Campbell is not part of the executive, he approaches the Risk, Remuneration and Nominations Committees. The Audit business of the company in an impartial and objective manner. Committee is composed solely of non-executive directors, all of whom are independent according to the definition set out in the DRDGOLD has adopted a formal and transparent policy in terms Nasdaq Rules. The six-member Risk Committee includes four non- of which the Nominations Committee identifies, interviews and executive directors and two executive directors. Four non-executive recommends short-listed candidates to the board. The board directors comprise the Remuneration Committee, all of whom are deliberates on the suitability of the candidates and appoints the independent. Two independent non-executive directors make up most suitable person. This procedure is in compliance with both the Nominations Committee. Nasdaq and JSE requirements.
There are a number of committees in place to enable the board Conflicts of interest to discharge its duties and responsibilities properly and to carry out its decision-making functions effectively. Each committee acts The company expects employees to perform their duties in within written terms of reference which have been approved by accordance with the best interests of the company and not to use the board and according to which specific functions of the board their position or knowledge gained through their employment with are delegated. Each committee has defined purposes, membership the company for their private or personal advantage. Directors are requirements, duties and reporting procedures. The committees required to declare any material conflicts of interest which may are subject to regular evaluation by the board with respect to have an impact on their ability to perform their duties in a manner performance and effectiveness that complies with good corporate governance practices.
12 DRDGOLD Sustainable Development Report 2011 Where necessary, the company may also seek independent legal Identifying hazards and assessing risks opinion regarding potential conflicts of interests in so far as these Quarterly risk assessments are carried out at each of DRDGOLD’s may affect specific directors, to determine whether or not a conflict mines and divisions where all the key risks are analysed and new of interest exists and to provide appropriate recommendations to risks identified. Each risk is ranked and allocated to a person who is the company to follow in dealing with these matters. then responsible for the implementation of actions to mitigate the risk. All risks are included in a centralised database from which data Risk management is taken to draw up risk maps for each operation or division. These are then presented to management and the Risk Committee. Responsibility for risk management at DRDGOLD starts with the board which delegates the discharge of some of the duties The process of conducting hazard identification and risk assessment associated with this to its Risk Committee. These include risk for the operations is based on three aspects: management and control responsibilities, assurance issues, health, the baseline assessment, which covers the whole operation in a safety and environmental compliance, and the monitoring and systematic way in respect of all risks; reporting of all the matters. the issues-based assessment, where specific assessments are carried out prior to the start of an activity; and Responsibility for the quality, integrity and reliability of the the continual assessment of health, safety and environmental company’s risk management rests with the Risk Committee which assessments, which forms part of the daily work programme. facilitates communication between the board, the Audit Committee, internal auditors and other parties engaged in risk management activities. Code of ethics Requirements of the King III Report and the Integrated Framework DRDGOLD is committed to the highest ethical standards. from the Committee of Sponsoring Organisations (COSO) have The company’s code of ethics, which may be accessed on the been incorporated into the company’s processes so that they company’s website at www.drdgold.com, governs the relationship also comply with SOX section 404 which deals with a company’s between the company and its stakeholders. The code applies to internal control systems. directors, officers, employees, contractors, communities, clients, customers and suppliers. The Risk Committee meets every quarter and reports back to the board. Commitment to external initiatives The Risk Committee ensures that: an effective risk management programme is implemented and DRDGOLD is an advocacy member of the Chamber of Mines of maintained; South Africa.The chamber is a voluntary membership, private sector risk management awareness is promoted among all employees; � employer organisation and is the principal advocate of major policy risk programmes (financing/insurance) adequately protect the positions endorsed by the mining employers. It represents these to company against catastrophic risks; � various organs of South African national and provincial governments regular risk assessments are conducted; � and to other relevant policy-making and opinion-forming entities, the total cost of risk in the long term is reduced; � both within the country and abroad.The chamber also works closely the protection of DRDGOLD’s assets is promoted throughout with the various employee organisations in formulating these the company; � positions where appropriate. the health, safety and well-being of all stakeholders is improved; � and � DRDGOLD’s activities are carried out in such a way that the safety and health of employees are ensured.
DRDGOLD Sustainable Development Report 2011 13 Economic performance
Management approach DRDGOLD is South Africa’s fourth-largest gold producer, making it reducing risk; one of the top 10 gold producers in the world. It holds significant controlling costs; resources of 60.2Moz and reserves of 7.3Moz. The company is managing margins; and publicly listed, with a primary listing on South Africa’s JSE Limited taking a disciplined approach to growth. and a secondary listing on the Nasdaq Capital Market in the United States. The majority of DRDGOLD’s shareholders (62%) reside in Increasingly, the focus is on the recovery of lower-risk, lower-cost, the United States, followed by South Africa (21%), and the UK and higher-margin ounces. Europe (17%).At the end of FY2011, the company had 384 884 379 ordinary shares in issue and a market capitalisation of R1.3 billion In January 2011, the company announced a change in its group (US$186.3 million). structure in order to better distinguish between its surface retreatment and underground mining operations. The intention is to develop two separate brands – Ergo (currently ErgoGold and Ergo Strategy Mining), including Crown (surface retreatment) and DRDGOLD The company’s strategy in the short-and medium-term is to (underground mining) – and ultimately to create two separate enhance shareholder value by: investment opportunities.
14 DRDGOLD Sustainable Development Report 2011 See more detail on the company’s strategy in the Annual Integrated Cash operating unit costs increased by 8% to R251 296/kg Report 2011, on page 6. (FY2010: R233 112/kg), mainly as a result of electricity increases and winter tariffs imposed by power utility Eskom. Performance FY2011 Direct and indirect impacts include: Employees and contractors received R759 million in salaries and DRDGOLD’s Integrated Annual Report for FY2011 provides a benefits, a 21% increase from R629 million in FY2010. comprehensive review of the operational and financial performance Providers of capital, largely banks, received R11 million in of the company and the broader material environmental, social interest (FY2010: R5 million). and governance (ESG) issues that underpin the company’s business Income tax and royalties of R10 million was paid to government performance. (FY2010: R11 million). No significant financial assistance was received from government. Key highlights include: Dividends paid to shareholders increased by 50% to 7.5 cents 15% increase in the average Rand gold price received to per share with a 115% increase in headline earnings per share to R308 220/kg (FY2010: R267 292/kg). 28 SA cents per share (FY2010: 13 SA cents per share). Gold production increased by 10% to 265 179oz (FY2010: 241 194oz). Value-added statement Revenue for the year increased by 29% to R2 565.3 million Value added is defined as the value created by activities of a business (FY2010: R1 990.5 million) reflecting higher gold production and and its employees and, in the case of DRDGOLD, is determined an increase in the average Rand gold price received. as the sale of gold less the cost of materials and services. The Operating profit increased by 76% to R477.0 million (FY2010: value-added statement reports on the calculation of value added 271.6 million). and its application among the stakeholders in the company. Capital expenditure increased by 64% to R317.3 million The statement shows the total value added and how it was (FY2010: R194.0 million), reflecting continued investment in the distributed, taking into account the amounts retained and re- development of the Crown/Ergo pipeline to more fully exploit invested in the company for the replacement of assets and synergies between the two surface circuits. development of operations.
2010 2011
R million % of total R million % of total
Value added
1 991 Sale of gold 2 565 (1 247) Less cost of materials and services (1 474) 744 79 Value added by operations 1 091 95 200 21 Income from investments 53 5 944 100 Total value added 1 144 100
Value distributed
Employees 629 67 Salaries, wages and other benefits 759 66 Community 5 1 Corporate social investment 16 1 Government 10 1 Current taxation 6 1 1 0 Mining royalties 4 0 Providers of capital 19 2 Dividends to shareholders 19 2 5 1 Interest on borrowings 11 1 669 72 Total value distributed 815 71 275 28 Re-invested in the group 329 29
944 100 Total value distributed 1 144 100
DRDGOLD Sustainable Development Report 2011 15 Economic performance continued
Black economic empowerment purified to 99.9%, thus meeting the standards of the London Bullion Market Association, and cast into troy ounce bars. On the DRDGOLD’s black economic empowerment (BEE) strategy is aimed same day as the delivery takes place, Rand Refinery sells the gold on at broad-based transformation across all levels of the company. DRDGOLD’s behalf at the London Metal Exchange (LME) afternoon Plans are in place at all operations to ensure compliance with the fixed dollar price. Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter. Suspension of financial assistance to Since FY2006, DRDGOLD complies with the BEE equity target of 26% set by the Mining Charter for 2014. Blyvoor and offer of assistance from AngloGold Ashanti The company’s BEE partner, Khumo Gold, acquired a 15% interest in Ergo Mining Operations in FY2006, increasing this stake to On 23 June 2011, DRDGOLD announced that it had suspended 20% in FY2006 when an additional 6% of equity was placed in financial assistance to Blyvoor. The decision followed the an employee trust, the DRDSA Empowerment Trust, to benefit a promulgation of the new Companies Act which requires directors broad group of Historically Disadvantaged South African (HDSA) of parent companies to seek the consent of the parent company employees.The trustees of this trust started administering the trust shareholders and then to consider the effects on the solvency during FY2011. and liquidity of the parent company as conditions precedent to the provision of financial assistance to subsidiaries. Blyvoor’s Economic transformation production had been declining as a result of a drop in grade, public holiday interruptions and seismicity-related work stoppages, while DRDGOLD is mindful of the role it can and must play in transforming costs had increased due mainly to higher electricity tariffs, and its procurement base to include emerging entrepreneurs and to particularly power utility Eskom’s winter surcharge which added provide preferential access to HDSA vendors. R11.0 million per month to overhead costs.
DRDGOLD’s procurement policy gives BEE companies preferred In response to DRDGOLD’s decision, the Board of Directors supplier status.This means that these companies are given preferred of Blyvoor resolved to begin business rescue proceedings for status should they be commercially competitive. Blyvoor in terms of Chapter 6 of the Companies Act. The business In total, DRDGOLD’s operations spent R1.5 billion on procurement rescue proceedings provided for in Chapter 6 replace the judicial in FY2011 (FY2010: R1.2 billion). management process in the previous Act. DRDGOLD supported the decision of the Blyvoor Board.
Beneficiation On 14 July 2011, DRDGOLD announced Blyvoor’s acceptance of DRDGOLD produces gold bars to approximately 85% gold and an offer of assistance from AngloGold Ashanti, involving the sale of 2 7% to 8% silver, with the balance comprising copper and other some 390 000m of its neighbouring Savuka mining area to Blyvoor common elements. The company owns shares in Rand Refinery for R35 million. Pending the necessary approvals and subject to Limited, one of the world’s foremost refiners and home of the the finalisation of a binding agreement, Blyvoor will mine the area Kruger Rand, which refines and sells all of its gold. This gold is under contract.
16 DRDGOLD Sustainable Development Report 2011 DRDGOLD Sustainable Development Report 2011 17 Safety, health and employee well-being
Management approach Ensuring the safety, health and well-being of employees is a signatory to the 10-year health and safety targets set at the 2003 strategic imperative for DRDGOLD, and a key performance area for summit of the Mine Health and Safety Council (MHSC). MHSC is all levels of management and supervisors. This is a responsibility a tripartite body comprising members drawn from government, that the company shares with employees, and the company is employers in the mining industry and employees. Under the actively committed to working closely with employees, unions and chairmanship of the Chief Inspector of Mines, the council advises the regulators in achieving its safety and health targets. The board the Minister of Mineral Resources on health and safety at has tasked the Transco with oversight of safety and health strategy operational level as well as on research programmes. It also reviews and performance. regulations.
DRDGOLD’s Health and Safety Policy commits the company to conduct its activities in such a way that ensures that the health and Safety safety of employees are continually given ‘foremost consideration’. It states clearly that under no circumstances will any current or Each operation has a safety and health department which reports future activities be allowed to compromise the health and safety to the general manager of the mine and to the General Manager: of employees and/or their families. Occupational health and safety Projects, who submit quarterly reports on safety and health to the is the responsibility of line management, and is a key indicator of board. business performance. DRDGOLD is committed to instilling in every single employee a culture that upholds the effective management of Health and safety agreements with unions are in place at all occupational health and safety as a prime objective of the company. DRDGOLD operations, as are full-time health and safety To this end, awareness campaigns and training programmes are representatives. Safety representatives account for 30 employees integral to the safety and health function across the company. of the workforce. At Blyvoor, four full-time health and safety representatives, representing No 4 Shaft, No 5 Shaft, No 6 Shaft DRDGOLD has systems, structures and resources in place to ensure and the surface reclamation/surface areas/metallurgical plant, have compliance with the Mine Health and Safety Act. The company is a been elected by employees. Two full-time safety representatives at
18 DRDGOLD Sustainable Development Report 2011 Ergo and Crown respectively, visit the plants on a rotational basis. The fall of ground COPA is currently focusing on the prevention of Union members as well as employees are involved in monitoring fall of ground accidents by way of involving all team members in the and assessing health and safety programmes. early morning examination of the working area. All team members are expected to take responsibility for declaring the area safe before Each operation has in place a joint management/union Health and work starts. This initiative has been introduced in K Section at No 5 Safety Committee, comprising management, full-time health and Shaft and will be launched officially at Blyvoor during the latter safety employees and union representatives, which meets on a part of the 2011 calendar year in conjunction with a mine-based monthly basis. behavioural safety campaign.
These committees have been charged with: During the year, mini campaigns continued to be implemented at identifying critical issues that hamper safety and health Blyvoor with respect to critical safety issues, including: performance; explosives; the provision of personal protective equipment; temporary and permanent support in stopes; participating in inspections, audits and accident investigations; temporary and permanent support for development areas; and winches and rigging; identifying areas for training and education. conveyor belt installations; safety in the shaft; Further, employees and management are encouraged to participate second escape ways across the mine; in safety and health matters at all levels. entry examination and face preparation; rails and switches; Regular risk assessments and safety audits are conducted at all rolling stock; DRDGOLD operations with major safety risks varying at each refuge chambers; operation. conveyors; environmental conditions; At Blyvoor, the company’s only underground operation, safety risks emergency preparedness; include: fire-fighting equipment; and seismicity and fall of ground incidents; electrical sub-stations. power failures; flooding; Ergo (including Crown and ERPM) underground fires; and Hazard assessment audits are conducted at Crown’s operations cable theft. every four weeks by the safety department and form part of the continuous risk assessment process. Each hazard identified is rated At Crown and Ergo, these include: according to the IRCA Risk Management methodology, which the handling of cyanide; includes consequence, exposure and probability, to attach a value failure to lock out machinery when maintenance or repairs are to each hazard to determine its priority ranking. High risks in terms carried out; of this classification are dealt with immediately by the person unsafe steep faces; conducting the audit and communicated to the relevant person rigging work; accountable for the hazard to ensure that it is rectified. overhead power lines; conveyor belts; and Crown’s Joint Accountability campaign, which is aimed at reminding trespassers entering the mining area. both supervisors and workers of the respective roles they play in the prevention of injuries at the workplace, continues to be implemented. Addressing safety issues A safety drive which focuses on the relationship between hand During FY2011, various initiatives to address the behaviour and finger injuries, and the necessity for tools and equipment of employees with respect to their approach to safety were to be kept in good condition, continues to be implemented. This implemented across DRDGOLD’s operations. Campaigns to create initiative includes awareness about the importance of using the awareness amongst employees around their rights and duties – as right tool for the job. set out in Sections 22 and 23 of the Mine Health and Safety Act (MHSC) – continue to be implemented. Campaigns continue to ensure that all employees who enter the company’s plants wear eye protection to reduce injuries caused by Blyvoor foreign bodies and to focus attention on electrical safety. Training of safety representatives has been increased from two to three days and an additional full-time safety representative has been appointed for the plant and surface areas. A monthly safety shift at all shafts continues to be held and all underground workers have been issued with self-contained self-rescuers.
DRDGOLD Sustainable Development Report 2011 19 Safety, health and employee wellbeing � continued
Performance FY2011 FIFR (per million hours worked) It is with deep regret that the company reports the death of one 0.25 employee in a mine-related accident at Blyvoor during the year. 0.20 Mr Hugh du Plooy died on 29 December 2010 after collapsing 0.20 0.18 underground while conducting a preliminary inspection. Mr du Plooy 0.16 is survived by his wife and two children.The board and management 0.15 extend their sincere condolences to his family and colleagues. 0.10 Mr du Plooy died while performing work-related duties. His death 0.08 0.07 0.07 has been ruled as a mine accident until such time as the autopsy report is made available. 0.05 0.04
0.00 0.00 On 18 March 2011, 26 people were injured and eight died in a bus 0.00 2011 2010 2009 accident. The bus, operated by a transport company under contract to the mine, had an accident transporting day shift workers from Group Blyvoor Crown the mine hostel at Blyvoor to No 4 Shaft. The accident occurred in the early morning hours when the driver of the bus lost control of the vehicle and the vehicle overturned. The injured were taken to hospitals in Carletonville, Potchefstroom, Krugersdorp, Randfontein LTIFR (per million hours worked) and Johannesburg. 30 28.68 The company extends its sincere condolences to the families, friends and colleagues of those who died. The company would like to 25 extend its gratitude to those who provided assistance, in particular 20 the staff of the South African Police Service, traffic authorities and 16.36 the numerous emergency services and hospitals. 15 13.57 11.84 In memory of those who died as a result of the bus accident on 10 8.20 7.60 18 March 2011: 4.03 4.58 Nontetho Florence Lande 5 2.91 Zweliwutile Tyokwana 0 Sibongile Gwantsela 2011 2010 2009 Antonio Filepe Mandlate Group Blyvoor Crown Kabelo Mabusetsa Abram Moshahla Rasebolai Armando Mutamngue Pendazamite Lucas Alfonso RIFR (per million hours worked)
During the year, 17 Section 54 instructions were issued by the DMR 10 to close certain areas of Blyvoor so investigations could be carried 8.93 out into the cause of each accident or safety infringement and to 8 establish remedial actions to prevent similar incidents in future. Section 54 stoppages resulted in the loss of 16 production days. 6 In total, 4 115 shifts were lost at Blyvoor (FY2010: 3 186), 345 shifts 5.14 4.61 4.46 at Crown (FY2010: 344) and no shifts at ERPM (FY2010: 18) as a 4 3.61 result of occupational injury. 3.22
1.78 Good progress was made with the behaviour-based safety initiative 2 1.34 0.97 with a steering committee having been elected and trained; a list of critical behaviours compiled from analysis of accidents; observer 0 2011 2010 2009 checklists prepared for critical behaviours; observers selected and trained and safety officers trained to observe observers. Group Blyvoor Crown
20 DRDGOLD Sustainable Development Report 2011 Top 20 agencies all accidents July 2010 June 2011 Blyvoor The Lost Time Injury Frequency Rate (LTIFR) regressed to 28.68 per million hours worked (FY2010: 13.57 per million hours worked).The Dressing Station Injury Frequency Rate (DSIFR) increased to 34.5 per million hours worked (FY2010: 19.59 per million hours worked). The Reportable Injury Frequency Rate (RIFR) also increased from 4.61 per million hours worked in FY2010 to 8.93 per million hours worked in FY2011 and the Fatality Injury Frequency Rate (FIFR) per million hours worked was 0.071 (FY2010: 0.065).
Bumped against 4 Safety stoppages as a result of increased seismicity are implemented Cages and skips 2 at Blyvoor where seismic risk is classified as low-, medium- or high- Caught between 7 risk. Should an area’s seismic risk increase from medium to high, Falling material 2 the relevant manager is immediately notified by the rock engineer, Fall from elevation 1 resulting in the removal of all employees from the identified working Fire 1 area until such a time as seismicity levels return to normal. In total, FOG 14 four such stoppages were implemented at the mine, resulting in the Foreign body 6 loss of 10 production days in the affected workplaces. Fume inhalation 9 Heat 3 Notwithstanding the deterioration of safety statistics at Blyvoor, Material handling 7 the mine recorded five million fall of ground fatality-free shifts on Rolling rock 4 23 March 2011, one million fatality free shifts in October 2010 and Rolling stock 5 four million seismicity-free shifts on 15 April 2011. Seismic 2 Slip and fall 9 Strand and wires 8 Ergo Mining Operations (including Crown Struck by 14 and ERPM) Winches and rigging 4 Crown’s LTIFR improved from 4.58 per million hours worked in FY2010 to 4.03 per million hours worked in FY2011. The DSIFR decreased to 11.44 per million hours worked (FY2010: 13.10 per million hours worked). The RIFR increased from 3.20 per million hours worked in FY2010 to 5.14 per million hours worked and the FIFR decreased to 0.04 per million hours worked (FY2010: 0.11 per million hours worked).
Crown, Ergo and ERPM received no DMR-issued Section 54 stoppages during the year.
DRDGOLD Sustainable Development Report 2011 21 Safety, health and employee well-being � continued
Safety nets for winch beds: A comprehensive investigation into the incident was subsequently conducted by management, the NUM and UASA, with assistance a success story from the DMR, to determine the causes. The main issue raised by On the morning of 16 August 2010, two Blyvoor employees the investigation was that of the deterioration of ground conditions were injured in a fall of ground in a winch bed. The winch bed in in winch chambers: a winch stays in position for a long time and the question had been in operation for a number of months. Due to the stability of the hanging wall worsens over time. high closure rate within the stoping environment, it had become As a direct outcome of the investigation, a plan was put forward necessary to blast the chamber for a second time and thus create that all existing and new winch beds be installed with netting. Nets space for the winch operator to do his job safely. The winch was were ordered and installed in conjunction with de-stranded rope. removed from the bed and the chamber blasted and supported. The rope is woven through the nine roofbolts that are drilled in the winch bed. This was done on a trial basis in order to look for any After blasting, the area was examined by both a team leader and shortcomings. Once the system was perfected, netting was installed rigger team leader and determined as safe. Thereafter, the rigging in all winch chambers on Blyvoor. crew entered the winch chamber to prepare to set up the winch once more when the fall of ground occurred. One rigger sustained To date, no falls of ground have occurred in any of the 200 winch a fractured right tibia and the other, multiple fractures of the upper beds at Blyvoor where these safety nets have been installed. body, including a fractured spine, cracked ribs and a fractured lower leg.
Health The provision of health care and the management of the occupational health programme at Blyvoor has been outsourced to Healthshare Health Solutions since 2005. Primary health care is available 24 hours a day at two on-mine clinics while secondary and tertiary health care is available to employees at the Gold Fields West Hospital in Carletonville. The mine subsidises the total cost of this service.
All employees at Crown are covered by a medical aid scheme. The operation’s occupational health clinic is staffed by a full-time occupational health practitioner and a part-time doctor. Since March 2009, when ERPM was placed on care and maintenance, primary health care has been provided at an on-site clinic which has a full-time sister and a part-time doctor.
22 DRDGOLD Sustainable Development Report 2011 Occupational health Medical surveilance DRDGOLD’s occupational health strategy has two pillars: trying 6 000 to eliminate or reduce the source of health problems and regular 5 260 medical monitoring of employees – particularly those most at risk 5 000 – in an effort to prevent such problems occurring and to detect symptoms as soon as possible. 4 000
The most significant occupational health diseases at DRDGOLD’s 3 000 operations are: Number of people 2 000 1 775 occupational lung disease (OLD) comprising silicosis and 1 289 1 014 chronic obstructive airway disease, which can be caused by 1 000 558 exposure to silica dust in operations with quartz-bearing 127 rock; 0 Initial Periodical Exit pulmonary tuberculosis (TB), the risk of contraction of which is increased by exposure to silica and when people are HIV- Blyvoor Crown, Ergo and ERPM positive; and noise-induced hearing loss (NIHL), which can occur when employees are consistently exposed to high levels of noise – in excess of 85 decibels (dBA) – over an extended period of time. NIHL DRDGOLD’s occupational health care programme makes provision for initial, periodic and exit medical examinations. Employees are 60 screened for heat tolerance, NIHL and TB. Statutory records are 53 kept and compensation claims submitted to the Medical Bureau for 50 Occupational Diseases (MBOD). 40 38
31 Performance FY2011 � 30 28 In total, 10 023 (2 789 initial, 6 549 periodic and 685 exit) medical 20 examinations were performed during the year. 10 10 5
NIHL � 0 NIHL – Submission for possible compensation 2009 2010 2011 At Blyvoor, all rock drills have been muffled to sound levels of approximately 110dBA. Some 25 Sulzer rock drills, which are Blyvoor Crown, Ergo and ERPM quieter and use less air, are currently in use. In addition, approximately 70% of all fans installed for underground cooling have been fitted with silencers.
Employees are also made aware – during the induction process – of the importance of wearing ear protection and the long-term effects NIHL of NIHL. In FY2011, 17 diagnostic audiograms were performed (16 at Blyvoor and one at Crown, Ergo and ERPM), while 33 cases 120 were submitted for possible compensation (28 at Blyvoor and five at Crown, Ergo and ERPM) with one case having been compensated. 100 98 82 80 OLD � 60 The industry-wide Prevention of Silicosis COPA, to which 53 Blyvoor belongs, is concentrating on the prevention of silicosis 40 by eliminating dust at major dust sources. Blyvoor continues to focus on the installation of ‘foggers’ at all main tipping areas. Three 20 10 10 ‘fogger’ systems are currently in place at Blyvoor with investigations 1 into the installation of an additional system currently under way. NIHL – Diagnostic audiograms performed 0 2009 2010 2011 Ten cases of OLD were submitted for compensation in FY2011 (FY2010: 67), all from Blyvoor. Blyvoor Crown
DRDGOLD Sustainable Development Report 2011 23 Safety, health and employee wellbeing � continued
OLD TB
Employees are screened for TB on a regular basis. TB is classified as 80 an occupational illness in the gold mining industry, where exposure 70 67 64 to silica dust can increase the risk of contracting TB in HIV-positive 60 53 workers. Blyvoor runs a Directly Observed Treatment (DOT) 50 regime which is aligned to the World Health Organisation (WHO)
40 guidelines. In FY2011, Blyvoor reported a monthly prevalence rate per 1 000 employees of 12.27 (FY2010: 17.25) with 93 new cases 30 identified during the year. 20 15 10 10 OLD – Number of cases submitted 0 HIV/AIDS 0 2009 2010 2011 DRDGOLD recognises that HIV/AIDS is a serious threat to Blyvoor Crown, Ergo and ERPM the well-being of employees, the company and the industry. While acknowledging that there is no simple way to counter this TB threat, DRDGOLD’s strategy includes the following: actively driving awareness programmes at each operation;
60 involving all stakeholders in a multi-faceted approach to educate 53 employees and their dependants to prevent the incidence of 50 HIV/AIDS; the development of wellness programmes for employees; 40 providing confidential, informed voluntary counselling and 30 testing (VCT); providing appropriate medical care to employees suffering from 20 17.25 HIV/AIDS; and 13.92 12.27 giving terminally ill employees the opportunity to live the rest 10 of their lives with dignity. 0 0 0 2009 2010 2011 TB – monthly prevelance rate (per 1000 emloyees) The management of HIV/AIDS at DRDGOLD’s operations is based Blyvoor Crown, Ergo and ERPM on prevention, early detection and provision of treatment. To this end, awareness campaigns are conducted at Blyvoor by a joint management/union initiative called Project Tsietsie. Education TB sessions and posters are used to educate employees and community members on the causes and treatment of HIV/AIDS and TB. 100 91 93 90 Wellness programmes are run at the Khotso-Caritas Hospice, 80 situated on the ERPM property, and at Blyvoor, which offer lifestyle 70 64 counselling and medication for opportunistic infections with 60 31.53 condoms dispensed at all DRDGOLD operations. 50 40 At Blyvoor, employees are encouraged to undergo VCT at the two TB – New cases 30 on-mine clinics. The prevalence rate is estimated to be 12% of the 19 20 Blyvoor workforce. In FY2011, 754 employees had VCT, a significant 10 increase from 168 the previous year. Patients are referred to a 0 0 private practitioner in Carletonville for anti-retroviral therapy (ART). 2009 2010 2011 In total, 446 employees are currently receiving ART with 110 people Blyvoor Crown, Ergo and ERPM attending the wellness clinic.
24 DRDGOLD Sustainable Development Report 2011 Two peer educators have been appointed at Blyvoor to do door-to- VCT is available at the Khotso-Caritas Hospice for DRDGOLD door campaigns and interventions. These campaigns are aligned to employees living in the Ekurhuleni area. ART is provided free of the Department of Health’s health calendar and focus on: charge at the Khotso-Caritas Hospice.
promoting health issues, such as the importance of VCT; Community outreach early detection and prevention of heart conditions; and Crown and corporate office continue to support the AIDS Week creating awareness and providing education on substance Bannerthon as part of the business community’s show of solidarity abuse. with HIV/AIDS sufferers and commitment to raise money for AIDS
At Crown, VCT is provided to employees on request. As Crown orphans. employees do not live on site and are covered by a medical aid scheme, they attend private or government clinics/hospitals and The Khotso-Caritas Hospice offers a wide range of treatment, not the operation does not keep their medical records. It is therefore only for employees, but also for community members from the not possible to give an estimate regarding the number of employees wider Ekurhuleni areas. This includes VCT, a wellness programme on ART or the associated costs. and ART.
DRDGOLD Sustainable Development Report 2011 25 Employment and human rights
Management approach Benefits provided to full-time employees include: While the deployment and management of people is a line function, At Crown overall responsibility for the management of human resources, annual, study and sick leave; industrial relations and labour practices across the company lies with maternity and paternity leave; the General Manager: Corporate Services. Each DRDGOLD operation special leave for employees involved in competitive sporting has a human resources manager with specialist human resources activities; and training personnel to handle the day-to-day management of medical aid; employee-related issues. Each human resources manager reports to pension and provident funds; mine management and to the General Manager: Corporate Services. study assistance; and Progress on employment equity and transformation issues at all a profit share scheme. levels of the company is monitored by Transco of the board. At Blyvoor Priority is given to the attraction, retention and development of free medical care (for employees in categories 4 to 8) and HDSAs, and women. This is in compliance with the requirements of medical aid for all other employees; the MPRDA Mining Charter. The company ensures that contractors maternity and family responsibility leave; who undertake work for the company are compliant with legislation. pension and provident funds; and study assistance. Relations with employees and organised labour at DRDGOLD are governed by recognition agreements and conditions of employment Although DRDGOLD strives to draw employees from local by legislation which covers: communities as far as possible, the company does not discriminate prescribed minimum levels of compensation and benefits; against foreign labour. trade union access and membership; the right to strike; There is no discrepancy at DRDGOLD between the salaries and mandatory compensation in the event of termination for wages of men and women in the same positions and they enjoy the operational reasons; same conditions of service. employment equity practices; compensation for occupational illness or injury on duty; and the provision and financing of training programmes. Human rights and collective bargaining Employment practices DRDGOLD endorses the basic labour rights enshrined in the DRDGOLD is committed to fair employment practices, equal Fundamental Rights Conventions of the International Labour opportunities and employment equity with the scope for employees Organisation (ILO) relating to collective bargaining and respects and to develop to their own potential. defends the rights of all employees to a working environment free of discrimination based on race, religion, age, disability or political DRDGOLD’s pay scales are market-related and benchmarking affiliation. The company further prohibits forced, compulsory and exercises are undertaken to ensure that salaries remain so. child labour. Remuneration and conditions of service for the majority of employees (85.8%) are governed by collective bargaining structures The company supports the rights of all employees to freedom that are negotiated bi-annually. of association and acts in accordance with the South African constitution, prescribed legislation, industry compacts and recognition agreements with unions. None of these rights are at risk within the company and no incidents of human rights abuse were reported during the year.
26 DRDGOLD Sustainable Development Report 2011 Vuselela: a re-awakening
Just as a parrot plucks off its tired, old feathers to make room for new growth, the Vuselela campaign being implemented throughout DRDGOLD is encouraging employees to shake off their old ways of doing things in order to create a new and invigorated company – one for which everyone is proud to work.
Started in April 2011, Vuselela – meaning ‘re-awakening’ –is set to change the lives of some 700 employees and their workplace and will cost close to R1 million. Driving the campaign is a recognition of the need to identify the behavioural changes required of all stakeholders in order to make DRDGOLD a better place to work.
The campaign is reaching out to employees in the form of workshops, Honesty in all dealings. which are presented to groups of some 40 people at a time. The fun Our word is our bond: keeping promises and being accountable. sessions include various activities, games and guest speakers, Respect and fairness for all, tolerance. including motivational speakers and representatives from the NUM Recognition of everyone’s potential, that everyone deserves to and UASA. Participants are encouraged to give their opinions about many aspects of the DRDGOLD working environment and to back be empowered, which necessitates good communication and these up with concrete examples, thus providing the facilitators upgrading of skills. with extensive feedback. Personal accountability: everyone stays informed and is knowledgeable about company policy and procedure. Workshops identify three critical needs for both personal and Courage to change, improve, set goals. company success. These are: Consideration of those less fortunate. alignment (defined as wanting and working towards the same objective); working effectively and efficiently (described as working towards Participants are also asked to make contributions to this set of the correct objective, doing this well and without waste); and values. When all the workshops are complete, those values most empowerment (allowing employees to make informed decisions strongly supported by workshop delegates will be analysed by a about matters that affect them, and necessitates skills and team representing all stakeholders and the best six to eight values information). will be selected as DRDGOLD values.These values will be publicised, promoted and sustained well into the future by various methods, The workshops further identify that the difference between the successful and the unsuccessful person and company is a clear including information campaigns, performance reviews, award vision and set of goals. Participants are asked for their vision schemes and their inclusion in induction programmes. for the group and what values they would like to see being practised in DRDGOLD. Values are regarded as the anchor that CEO Niël Pretorius has described the Vuselela campaign as the holds together both people and companies and without which people of DRDGOLD coming together as individuals, family alignment is impossible. Employees are asked to look deeply at their members and workmates to agree on a set of shared values that behaviour to see if their attitudes and actions help to build or break will help make DRDGOLD everything its employees want it to be. down the organisation for which they work. Such is the commitment to Vuselela throughout DRDGOLD, that A set of values for DRDGOLD proposed and discussed in the this parrot looks set to gain a whole new set of feathers in the very workshop, and can be summarised as follows: near future.
DRDGOLD Sustainable Development Report 2011 27 Employment and human rights continued �
In total, 85.8% of the company’s employees are unionised. NUM DRDGOLD has an employment equity programme in place that continues to represent the bulk of employees (70.0%) while the is guided by the requirements of the Mining Charter and the remainder of unionised employees are represented by UASA (15.8%). Employment Equity Act. Employment equity plans and progress made with the company’s operations are submitted to the Given South Africa’s past however, it is not surprising that racial Department of Labour (DoL) every year. tension is still an issue in the workplace and instances of friction between supervisors and subordinates do occur. DRDGOLD ensures that contractors who undertake work for the company are compliant with legislation. To address this issue, DRDGOLD’s Ekurhuleni Business Development Academy (EBDA) offers a one-day workshop on transformation to DRDGOLD continues to report progress towards achieving the 10% help ensure that all employees embrace diversity and understand representation of women in mining required by the Mining Charter, and respect the cultures of others in the workplace. although a number of challenges remain, including the recruitment and retention of highly sought-after skilled women and HDSA employees. Performance FY2011 At the end of June 2011, DRDGOLD employed 6 875 people At the end of FY2011, women made up 10.8% of the workforce, (5 160 permanent, full-time employees and 1 715 permanent, with 322 (6.3% of the workforce) working in the core disciplines full-time contractors). of mining, metallurgy, engineering and ore reserve management. At Crown and Ergo, women working in the core disciplines make up 8% of the workforce and 6% of the workforce at Blyvoor. Employees and contractors A policy is in place which prohibits sexual harassment, whether it occurs in the workplace or at any other employee-related events 6000 or activities. 5160 4869 5000 4660 Training and development 4000 DRDGOLD has an extensive skills development programme in 3000 place, which includes Adult Basic Education and Training (ABET). Talent is fostered through learnerships, on-the-job training through 2000 1846 1749 1715 a mentorship programme, internships and the provision of bursaries 1000 and study assistance. All DRDGOLD operations identify HDSAs for skills development and advancement. 0 2009 2010 2011 During the year, a total of 292 people were included in the Employees Contractors company’s talent pool: 274 at Blyvoor and 18 at Crown and Ergo.
Workplace skills development plans and training reports, which As at 30 June 2011, the total company turnover level was 11.1% identify DRDGOLD’s future skills needs and training requirements, (FY2010: 8.3%). During the year a total of 569 people left the are submitted to the Mine Qualifications Authority (MQA) each company owing to ill health (42.5%), resignation (22.5%), dismissal year. (19.9%); retirement (2.1%) and 8.4% died in service during FY2011. Literacy Employment equity Although DRDGOLD’s policy is to employ only people with a The purpose of employment equity legislation in South Africa is minimum secondary school qualification, there is no discrimination the promotion of equal opportunity and fair treatment through against those employees who do not hold this qualification. the elimination of unfair discrimination and the implementation of affirmative action measures to redress the imbalances of the past. Adult basic education and training (ABET) is offered at all DRDGOLD operations to facilitate literacy and numeracy and to The Mining Charter requires that HDSA employees make up 40% of offer employees the opportunity to further their education and management by 2009. At the end of FY2011, the representation of improve their career prospects. ABET is available to employees on a HDSAs in management for the company was 28%. full-time or part-time voluntary basis, depending on the company’s
28 DRDGOLD Sustainable Development Report 2011 needs. ABET is also offered to community members with regular Learnerships adverts placed in local newspapers to convey the message. DRDGOLD offers learnership programmes to provide employees with the opportunity to improve their skills through a combination Employees and community members surrounding the Crown and of studying and practical, on-the-job training. Learnerships play an Ergo operations attend ABET classes at the Ekurhuleni Business important part in progressing employees’ careers as they lead to Development Academy (EBDA) on a full-time basis. During the year, qualifications recognised by the Sector Education Training Authority 12 employees and 20 community members received ABET at EBDA. (SETA) and are registered with the DoL.In FY2011,the company spent Four classrooms and four computer rooms can accommodate R8.081 million on learnerships. around 120 learners at a time. In FY2011, 11 employees at Blyvoor participated in learnerships An additional ABET centre was opened at one of Crown‘s plants, in the fields of electrical (7) and mechanical (4) and at Crown, all City Deep, in March 2011 to ensure that all employees have access six employees who enrolled in 2007 successfully completed their to ABET facilities. This facility comprises two classrooms and one three-year learnerships in engineering and are currently finalising administration office where three facilitators offer classes in literacy their N2 qualifications. and numeracy to 27 learners (12 employees and 15 community members). In addition, 67 community learners have been enrolled for engineering learnerships at EBDA as part of the national skills fund At Blyvoor, ABET is available on a part-time basis to employees as process. well as to people from the surrounding community. The Blyvoor ABET facilities, comprising eight classrooms and one library, offered Mentorships ABET to 152 employees and 27 community members during the year. DRDGOLD’s policy regarding mentorships is that once mentors have been identified, they must be trained and attend a refresher The total cost to DRDGOLD of providing ABET in FY2011 amounted course every year. Mentors are required to meet formally with their to R2.0 million. protégés on a regular basis to review progress in terms of each
DRDGOLD’s Graduate Development Lindiwe joined Crown in December 2007 as a metallurgical trainee. She showed both great interest in her work and great promise. She Programme: high-flyers get their wings was soon enrolled for her National Diploma in Mining Engineering at the University of Johannesburg (UJ) and DRDGOLD supported her with a bursary. Lindiwe completed her diploma in 2010. She then quickly went on to obtain her Production Supervisor Certificate this year. She is currently working towards her Rock Breaking Certificate at Gold Fields Academy. Lindiwe says she had always wanted to be a part of the important mineral producing sector and loves the thrill of going underground.
Nelio Monjane has been a mining trainee at Blyvoor since 2008, when financial difficulties forced him to abandon his studies in mining engineering at UJ. Nelio was soon singled out as one of the learners to be part of the GDP. He, too, was granted a bursary by the mine to study at a tertiary institution. Nelio resumed his studies for a National Diploma in Mining Engineering at UJ, with DRDGOLD’s bursary covering his tuition fees, accommodation
Lindiwe Mapaila completed her diploma in Mining Engineering at UJ. expenses and a daily allowance. In addition, Nelio completed his Rock Breaking Certificate in 2010 and this year, completed his Lindiwe Mapaila, 23, and Nelio Monjane, 26, have bright futures Production Supervisor Certificate. ahead of them. Thanks to their talent, hard work and DRDGOLD’s Graduate Development Programme (GDP), both are being groomed Both Lindiwe and Nelio are on track to begin their Mine Overseer for managerial roles in South Africa’s mining industry. Certificate. And if their past performance is anything to go by, this will be sooner rather than later. Up to 10 promising participants are selected to be part of the GDP, Lindiwe and Nelio are part of the 2010 intake. Selected learners are appointed mentors who are trained and attend annual refresher courses. Learners have personal development plans devised for them and then meet with their mentors at least once a month to review progress in accordance with these plans. In addition, bursaries are available for a learner to study at a tertiary institution.
DRDGOLD Sustainable Development Report 2011 29 Employment and human rights continued
individual’s career development plan. Protégés have to submit In total, two Blyvoor employees and four Crown and Ergo employees a monthly report to their mentors, summarising their activities were assisted during the year at a cost of R123 200. during the month. This report highlights the progress made by each individual in terms of his/her career development plan. Housing and living conditions In FY2011, 34 employees participated in the company’s mentorship At Blyvoor, around 69% of employees live in accommodation programme: 20 at Blyvoor and 14 at Crown and Ergo. provided by the mine. This comprises: 966 mine houses; Bursaries and study assistance programmes 258 family units; Bursaries and study assistance are offered to employees studying one single-sex hostel (in which 1 671 male employees currently at tertiary institutions in disciplines that are core to the mining reside); and industry and form an integral part of the company’s employment equity plan. The number of bursaries offered is guided by the a 54-room lodge for 54 female employees. company’s long-term requirements and the value of bursaries is The remainder of the workforce – some 1 330 employees – are paid market-related, covering tuition fees and the cost of board and lodging as well as an allowance. a living-out allowance and stay in housing off the property.
Daily meals are provided to all Blyvoor hostel residents while One of Blyvoor’s two bursary students completed a national diploma in mining engineering at the University of Johannesburg underground and plant employees are provided with meal packs. (UJ) in 2011, (see case study on page 29), while the other mining Crown and Ergo employees receive a monthly housing allowance engineering student is still completing his studies at UJ. as there is no on-site accommodation at either of these operations. The cost to the company of the bursary programme during the year DRDGOLD promotes home ownership amongst employees. Banks amounted to R600 000. have formed a co-operative arrangement with the Mineworkers’ The company also offers assistance to employees to study courses Provident Fund that allows for a portion of an employee’s holding in that will develop their careers. The company meets the cost of fees, the fund to be held as collateral against a mortgage. The company study materials and prescribed books as well as the associated assists employees in managing the process by arranging for monthly accommodation and travelling costs. mortgage payments to be deducted from the payroll.
DRDGOLD supports the Soccer Against Crime initiative in the Makhausi informal settlement.
30 DRDGOLD Sustainable Development Report 2011 Community development
Pictured above is David Mabuza, an EBDA enterprise development participant, assembling and erecting the burglar proofing.
Management approach
DRDGOLD is committed to making a difference to the communities DRDGOLD’s LED and CSI programmes aim to promote development which surround its operations. In line with the requirements of the that: Mining Charter, the company has identified a number of local uses resources which are locally available; economic development (LED) and corporate social investment is based on the priorities and needs identified by the municipality (CSI) projects and commitments to these have been made in the concerned; uses resources economically and sustainably; company’s Social and Labour Plans (SLPs). DRDGOLD ensures that is feasible for the organisation, given its size and profitability; the projects and commitments it undertakes are in line with the includes as many economic sectors as possible; local municipalities’ Integrated Development Plans (IDPs). provides for a diverse labour market; and devolves ownership of the development process to local people. Community development issues and compliance with these aspects of the Mining Charter at board level are the responsibility of Transco All projects supported by the company are located within the and are discussed at executive committee (Exco) level. The General communities affected by DRDGOLD operations and/or from Manager: Corporate Services is responsible for community and which the company draws its labour and need to contribute to sustainable development, including corporate social investment, at the general upliftment of the community or specific individuals company level while the Manager: Transformation and Sustainable within it. Crown, ERPM and Ergo employees live in the communities Development is responsible for implementing programmes at surrounding these operations, while Blyvoor employees come from operational level. local communities and from other provinces as well as neighbouring
DRDGOLD Sustainable Development Report 2011 31 Community development continued �
countries. The majority of Blyvoor’s migrant employees originate learnerships for corporate-sponsored employees in engineering, from the Eastern Cape, KwaZulu Natal, Mozambique or Lesotho. motor mechanics, new venture creation and construction skills; short courses and skills programmes in metallurgy and minerals Addressing community needs processing, engineering and adult basic education (ABET); and short courses in computer skills, operator training and licensing, DRDGOLD engages on a formal and regular basis with local and health and safety. authorities, including the Merafong City Council in respect of Blyvoor; the Ekhurhuleni Metropolitan Municipality in respect of Ergo and During the year, EBDA also provided assistance to the Ekukhanyeni the Johannesburg Metropolitan Municipality in respect of Crown. Primary School by improving the security of the school’s library Support given to local communities includes, but is not confined which will be converted to a media centre in the near future. to, financial backing or the donation of goods and may take the David Mabuza, an EBDA enterprise development participant, was form of managerial time and expertise or allowing access to mine tasked with assembling and erecting the burglar proofing. David infrastructure or transport. gained valuable skills while also helping members from the local community. Eric Mnisi, a maths and science teacher at EBDA’s The main areas of focus are: education, particularly in the subjects of maths and science; ABET centre, visits the Tsakane High and Secondary school and the skills development; Tlakula High School on a weekly basis to give additional maths and sustainable job creation to alleviate unemployment and poverty; science classes to students in Grades 11 and 12. health (particularly HIV/AIDS); The Khotso-Caritas Hospice, located in Ekurhuleni on land donated housing; and by ERPM, serves people affected by HIV/AIDS in the area and runs the overall improvement of the environment surrounding programmes aimed at: operations. the prevention and treatment of HIV/AIDS (including the In FY2011, DRDGOLD spent 15.8 million (FY2010: R5.3 million) on provision of voluntary counselling and testing (VCT) and community upliftment projects. anti-retroviral therapy (ART)); providing palliative care to terminally ill patients; and Projects providing day care to children infected and affected by The Ekurhuleni Business Development Academy (EBDA) is the most HIV/AIDS. significant LED project established by DRDGOLD in terms of impact DRDGOLD is a member of the Gold Producers’ Partnership For and expenditure. EBDA aims to develop South Africans from all walks Development, an industry initiative comprising the major gold of life into exceptional entrepreneurs by providing the necessary mining companies including AngloGold Ashanti, Goldfields, skills and guidance required to embark on a journey of life-long Harmony and Village Main Reef. This initiative is co-ordinated by learning. the Chamber of Mines’ Community Development Forum, which EBDA offers first-rate training to corporate employees, private aims to implement joint projects in both labour sending areas and learners and unemployed community learners including: local communities.
Name and description of Benefits received by beneficiaries project Refurbishment of facilities at These contractors employed artisans and six unemployed Riverlea community members were employed to Riverlea Secondary School at refurbish the roof and the woodwork section as well as all toilets of the school. Participants received skills a cost of some R433 000 training and wages.
Renovation of Crown Plant Nine unemployed community members (four from Riverlea and five from Diepkloof) were employed to fence, at a cost of R30 000 renovate the fence at Crown Plant. Participants received free pre-employment medical examinations, wages and skills training. A data base, containing the details of all interested community members is held by ward councilors and community leaders. Jobs are allocated on a rotational basis.
Upgrading library into media Local contractors, four unskilled and three semi-skilled community members were employed to convert the centre at Crestview Primary library into a media centre. Participants received wages and skills training. School, at a cost of R240 000
Planting trees on Withok 10 unemployed community members (four from Tsakane and six from Geluksdal) were employed to rehabilitate tailings dam, at a cost of the tailings dam. Participants received free medical treatment for the duration of their contracts, wages R638 000. and skills training. A data base, containing the details of all interested community members, is held by ward councilors and community leaders. Jobs are allocated on a rotational basis.
32 DRDGOLD Sustainable Development Report 2011 Product responsibility
Management approach Investment and coins Some 13% of the annual demand for gold is for investment in the DRDGOLD is engaged in an expansive gold production process: form of bars and coins. exploration, underground mining, surface retreatment, refining and rehabilitation. The company takes its responsibility towards its Governments, individuals and institutions hold investments of gold product very seriously in each area of the production process. in the convenient form of bullion.
Gold coins issued in specific weights are popular ways for people Showing responsibility for a rare and to own small volumes of gold for investment. Gold coins are also precious metal issued as commemorative items and as such have a collectable and precious metal value. The SA Mint produces several legal tender Gold is a remarkable precious metal with many uses. It conducts coins, the best known and most widely sold being the 22-carat electricity, does not tarnish, is easy to work, can be drawn into wire, Krugerrand. hammered into thin sheets, alloys with many other metals, can be melted and cast into complicated shapes and has an alluring colour and lustre. Throughout history, gold has been held in high esteem. From the ancient Pharaohs to Spanish explorers of the New World to modern European monarchies, gold has been used to symbolise power, beauty, purity and accomplishment. Today, we still turn to gold to make our wedding rings, Olympic medals, Oscars, money, crucifixes and other symbols of major importance.
South Africa’s gold mining industry has dominated the world’s gold mining scene for some 120 years. Since records of production were first collected in 1884 until the present day, the South African gold mining sector has produced more than 50 000t of gold – some 33% of all the gold estimated above surface. Electronics Gold and its myriad uses The industrial sector accounts for some 11% of annual demand for gold, the most important industrial use being the manufacture of Jewellery electronics. The properties of gold make it perfect for manufacturing jewellery, alloyed with other metals such as copper, silver and platinum to Electronic devices use very low voltages and currents which are increase durability. Some 70% of the annual demand for gold is easily interrupted by corrosion or tarnish at contact points. Gold from the jewellery industry, making it far and away the largest is a highly efficient conductor that can carry these tiny currents end-user of the precious metal. and remain corrosion-free. A small amount of gold is used in almost every sophisticated electronic device, including cell phones, calculators and global positioning systems. It is also used in television sets and computers.
DRDGOLD Sustainable Development Report 2011 33 Product responsibility continued
Dentistry and medicine Compliance with GRI guidelines Gold is used in dentistry because of its superior performance and As a producer of such an important and useful metal, it is hardly aesthetic appeal. It is used because it is chemically inert, non- surprising that DRDGOLD is supportive of the Global Reporting allergenic and easy to work. Initiative’s (GRI) G3 reporting guidelines, including those related to product responsibility. Gold is used to treat a small number of medical conditions, including rheumatoid arthritis and certain cancers. Radioactive gold is also DRDGOLD does not produce the final product of a gold bar of 99.9% used in diagnosis of cancer by being injected in a colloidal solution purity. The company produces doré bars which are approximately that can be tracked as a beta emitter as it passes through the body. 85% pure. The doré bars are then further refined at Rand Refinery Ltd, Germiston in South Africa’s Gauteng province, to achieve the 99.99% purity required by the London Bullion Market Association. Most of the fine gold produced by Rand Refinery goes into gold bars, either 400-ounce good delivery bars or kilo bars or smaller.The gold is then marketed and sold by Rand Refinery, on behalf of DRDGOLD, to customers around the world.
Health and safety impacts Gold as a metal is benign and there are few, if any, safety and health impacts associated with the final product.
Gold is seldom wasted because it is precious and basically indestructible. Gold lends itself to recycling, with about 15% of annual gold consumption being recycled.
Customer satisfaction and incidents of non- Aerospace compliance with regulations or voluntary codes Gold is used extensively in every spacecraft that NASA launches. It Rand Refinery is the channel through which gold is marketed and is used in circuitry and parts of every spacecraft are fitted with gold- sold and thus, DRDGOLD is not involved with the end-users of its coated polyester film which reflects infrared radiation and hence product, does not undertake any customer satisfaction surveys or stabilises spacecraft’s temperature. provide product information or labelling.
Marketing and communications DRDGOLD does not market its product directly and therefore GRI questions relating to marketing communications, customer privacy and compliance are not applicable.
34 DRDGOLD Sustainable Development Report 2011 Environmental performance
Management approach The diversity of DRDGOLD’s operations is particularly evident when looking at the risks and challenges, and indeed the opportunities, Responsibility for environmental management lies with the general facing the company from an environmental perspective. managers of the respective operations, although they are supported by an environmental management team and appointed consultants. The deep-level underground Blyvoor mine has a relatively limited The latter undertake dust and water monitoring for example, as well footprint area under management, but a considerable legacy in as assessments of compliance with Environmental Management respect of the accumulation of environmental challenges over Plans (EMPs), environmental impact assessments (EIAs) and other decades of operation. Blyvoor’s infrastructure is ageing, which has specialist functions. DRDGOLD’s environmental policy commits an impact on environmental control and the company’s recent the company to the responsible management of the environment operating and financial challenges have added further constraints. in which it operates, adopting and implementing environmental It is also located in a region that has been mined intensively for practices as outlined in the National Environmental Management many decades by many different companies, most of which are no Act (NEMA), 1998. longer operational. It is therefore very difficult to always isolate a particular source of impact to a particular mine. Key amongst the DRDGOLD’s policy is to: environmental issues faced by Blyvoor are: integrate environmental management into the company’s dust management from the tailings storage facilities (TSFs); business and planning so as to minimise the influence of its prevention and management of discharges; and activities on the environment through internal risk assessments planning for the rehabilitation and eventual closure of and environmental impact assessments; operations. comply with relevant environmental legislation and adopt and apply the best practicable environmental option to address any Additionally, Blyvoor and ERPM are key role-players in the issues; and potential water decant problem, and the associated acid monitor, evaluate and report the success of the mitigation mine drainage (AMD) within the Central and Far Western measures applied. Witwatersrand Basins, a legacy of mining in this region for over a
DRDGOLD Sustainable Development Report 2011 35 Environmental performance continued
100 years. Associated with this, and with the location of its Performance in FY2011 operation in a dolomite-rich region, Blyvoor closely monitors the formation of sinkholes on and around its property, and fills and Compliance rehabilitates these when and where they occur. Compliance with environmental legislation and regulations set by the DMR, the Department of Water and Environmental Affairs The surface retreatment operations experience their own (DWEA) and the National Nuclear Regulator (NNR) forms the basis environmental challenges, which are more often short-term in of DRDGOLD’s environmental management systems. nature, occurring primarily during the process of mining operations. Approved EMPs are in place at all of the company’s active operations. These include: Developed by the company, these plans address the impacts and air pollution from surface deposits that are being mined or potential impacts on the environment by DRDGOLD, as well as active deposition sites; the measures to manage, monitor and mitigate these impacts. discharges (particularly when pipelines burst or are damaged); A biennial audit is undertaken to assess compliance with the EMP and and submitted to the DMR.The most recent audits were undertaken aesthetic disturbance caused by the physical alteration of the at Crown, ERPM and Blyvoor in May/June 2011. No significant areas landscape (despite the dumps are forming an artificial landscape of non-compliance were noted. in the first instance). An external consultant undertakes an annual assessment of closure Common across all operations is the need to conserve and optimise liabilities. NNR audits are also conducted once a year as part of the the use of resources such as water, energy, chemicals such as cyanide, NNR compliance monitoring procedure. hydrochloric acid and lime, and fuels. DRDGOLD’s operations are Revised EMPs, compliant with the MPRDA requirements, were typically located in close proximity to local communities, and submitted to the DMR – for Blyvoor and ERPM in 2007, and for the impact of these operations (as well as neighbouring mining Crown in 2009. operations) can have a real and negative impact on the communities concerned. Ongoing community engagement is therefore a very All operations applied for their integrated water use licences in 2006 important feature of DRDGOLD’s environmental management and 2007. Ergo’s application was approved in 2010 and Blyvoor’s in programme (EMP). 2011. The other operations – Crown and ERPM – are still awaiting
36 DRDGOLD Sustainable Development Report 2011 approval by DWA of their applications, and are operating in line with Rock dumps and TSFs require specialist environmental care and previously granted permits in the interim. management. The TSFs in particular are constructed by specialists to minimise the contamination of tailings into the surrounding Environmental incidents are monitored and reported to the relevant environment, and to ensure the integrity of the resultant structure. authorities as required. There were a total of 16 environmental Material is first deposited on the TSF in the form of a slurry, which incidents during the year: dries and solidifies over time.At deposition the TSF contains traces of three relating to water pollution at Crown and three at Blyvoor, involving burst residue pipes and storm water run-off; minerals, nitrates (from explosives) and chemicals (such as cyanide). seven dust-related incidents at Crown, involving windblown Cyanide toxicity is neutralised through exposure to UV light rays dust from reclamation sites and TSFs; and from the sun. three radiation incidents at Crown and ERPM, involving burst residue pipes, AMD from a reclamation site and the removal of Over the past 100 years of mining in South Africa, it is estimated that scrap from the ERPM plant. thousands of hectares of these dumps have been created. Not only have processing (and hence recoveries) and deposition techniques Steps were taken to remedy each of these incidents including: improved over the years, but so have environmental knowledge, increased pipeline controls, including tests on pipeline integrity; practice and legislation. Better design, location, monitoring and increased control of TSF paddocks at Blyvoor; rehabilitation of newer dumps mean that they are typically more installation of telemetric warning systems; aesthetically pleasing, have less or no water run-off into local various rehabilitation measures, including vegetation, cladding, water courses, and emit less dust. The older dumps on the other dust suppression, shade netting and ridge ploughing; and hand, tend to be significant sources of dust – particularly during demolition of the ERPM plant. windy periods – and water run-off during periods of high rainfall. No fines were imposed on any of the company’s operations during An added complication is that human settlements, both formal and FY2011 for environmental non-compliance. informal, have developed around these dumps, far closer than was ever envisaged by any legislation or regulation – and this has meant Stakeholder engagement on environmental a far more direct interface between the dumps and people than is issues desirable. Together with other mines in the area, Blyvoor is a member of the Mining Interest Group (MIG) which regularly engages with the The resource base for DRDGOLD’s retreatment business lies in DMR, DWA, the NNR, and representatives of local authorities and these dumps – both sand and slimes, most of which it has acquired municipalities. The MIG is represented on the implementation task from operating and defunct mines. Through its surface operations team set up by government to look at viable, practical solutions to (Crown and Ergo), DRDGOLD extracts gold by reprocessing these address pollution issues regarding the Wonderfontein Spruit. sand and slimes dumps along the reefs that stretch 50 kilometres from east to west just south of Johannesburg’s central business DRDGOLD participates in a number of public groups, including the: district. The land that these dumps are situated on is therefore Ekurhuleni Business Forum; prime land for development. Blesbok Spruit Forum; Klip River Forum; Sand dumps are reclaimed in a mechanical process, and slimes dams Rand Water Catchment Quality Forum,; by means of high-pressure water monitoring. This slurry is pumped Heriotdale Business Forum; to one of the company’s processing plants where modern milling Mooi River Forum; and carbon-in-pulp (CIP) technology is used to recover much of the Far West Rand Technical Working Group; Far West Rand Dolomitic Water Association; remaining gold. The land that is liberated by the removal of tailings Wonderfontein Spruit Forum; is rehabilitated and developed, mainly for industrial purposes. Potchefstroom City Council; and the Merafong Clean Air Forum. The grade in these dumps is very low (about 0.3 g/t) and the business therefore relies on large volumes to be economical. This Retreating dumps – an economic basis for is also a highly dynamic business – as old dumps are depleted so environmental management others are brought on stream. Historically and to the present, tailings storage facilities (TSFs) and The economic benefits are many: the operations create jobs and rock dumps are a natural consequence of underground mining, where a combination of waste rock and ore is brought to surface for economic activity, they turn to account mineral wealth that was crushing, treatment and then separation from the valuable mineral trapped in these dumps, and they release prime land located within stream, which is further processed to release gold. In the stamp the hub of economic activity for re-development. Dump removal milling era of ore processing, processing plants typically produced also means a reduction in the environmental liability on the books sand whereas current milling reduces all ores to finer-particle slimes of DRDGOLD and other mining companies, and reduces the cost of before the extraction of gold. maintaining them and mitigating their environmental impact.
DRDGOLD Sustainable Development Report 2011 37 Environmental performance continued �
The environmental benefits too are significant: reprocessing eradicates badly located and constructed dumps and the waste resulting from retreatment is consolidated and constructed in new dumps constructed in line with best environmental practice, and dust and water emissions are minimised.
Using our resources responsibly DRDGOLD is committed to using natural resources carefully and to reducing waste wherever possible.
Materials used (tonnes)
2011 2010
Rock mined (ore and waste) 988 210 781 188 Sand treated/recycled 5 336 122 5 095 061 Slimes treated/recycled 17 856 740 16 628 091 Cyanide 6 682 4 896 Mechanical agitation of sewage at Blyvoor. Steel 9 274 Hydrochloric acid 1 482 1 616 52 330 litres) and 2 439 363 litres of diesel (FY2010:2 079 311 litres). Caustic soda 2 403 1 640 Consumption of diesel has increased due to increased production Lime 42 973 53 331 at Blyvoor and the ramping up of production at Ergo. To reduce Carbon 1 114 794 consumption, Blyvoor is moving from using diesel locomotives Poly fuel/waxy fuel 1 051 438 to more energy-efficient battery-operated locomotives, and Petrol 41 52 five of these were introduced during the year at a cost of some Diesel 2 439 2 079 R2.2 million.The use of mechanical agitation rather than compressed air in the sewage plants on site was introduced during the year at a The most significant materials used are the rock mined, and sand cost of R650 000 million. and slimes retreated. The primary chemicals used are: Other materials used are: cyanide (used to disolve gold); hydrochloric acid; steel (crushing of ore in the mills); caustic soda; timber (for support underground); and lime; explosives. carbon; and DRDGOLD is a significant user of cyanide in the gold liberation poly fuel/waxy fuel. process and recognises the need to adopt best practice in its Petrol and diesel are used to power vehicles and equipment. In transport, storage and handling. Cyanide is purchased from a FY2011, DRDGOLD consumed 41 112 litres of petrol (FY2010: recognised and reputable company, Sasol, and standard procedures
Total water used and recycled (000m3) Blyvoor Crown Ergo Company 2011 2010 2011 2010 2011 2010 2011 2010
Potable water from external sources 3 687 4 110 4 377 4 591 427 388 8 491 9 089
% of total water used that is sourced from external sources 33 43 54 62 3 3 26 32
Groundwater used 6 299 4 309 – – – – 6 299 4 309
% water used that is groundwater 57 45 – – – – 19 15
Water recycled in process 1 158 1 059 3 743 2 799 12 773 11 479 17 674 15 337
% of water that is recycled 10 11 46 88 97 97 55 53
Total water used 11 144 9 478 8 120 7 390 13 200 11 867 32 464 28 735
38 DRDGOLD Sustainable Development Report 2011 and protocols have been implemented and significant emphasis is The water treatment plant was commissioned at Blyvoor during the placed on training of plant employees. No cyanide-related incidents year, and will reduce the discharge of water into the Wonderfontein were recorded during the year. Spruit by approximately 175 megalitres a month. It is currently treating approximately five megalitres of water a day to potable Securing and managing water standard, thereby further reducing Blyvoor’s potable water needs. DRDGOLD recognises that water is a scarce resource and endeavours to minimise the amount of fresh water it uses and As a member of the MIG, Blyvoor, together with the regulators, is to optimise recycling. In total, DRDGOLD used 32 464 000m3 of investigating the pollution of the sediments of the spruit caused water for primary activities. The use of water by the two employee largely through historical mining activities, to determine a collective villages located at Blyvoor is included in this figure. Of this, action plan. Implementation task teams have been established to 8 491 000m3 was potable water sourced from local utility Rand carry out further investigation. Water Board, around 32% of total water used. Blyvoor extracts Western and Central Basin water approximately 9 791 000m3 of water from underground sources, The Western Basin of the Witwatersrand goldfields has been filling some of which is treated internally to potable water standard. with water since mining operations ceased in the early 2000s and Water quality and discharge volumes are monitored regularly. this water, known as AMD, started to decant on surface in 2002. Details of the water usage by operation for FY2011 are set out on A Section 21 company, the Western Basin Environmental page 38. Corporation, was formed by three of the mines still operating in Wonderfontein Spruit this area – Rand Uranium (Harmony), Mogale Gold (Mintails) and Blyvoor continues to discharge between three megalitres and West Wits (DRDGOLD) – to investigate a sustainable solution to 10 megalitres per day of fissure water from underground into the this polluted water. A management agreement was signed with the Wonderfontein Spruit, dependant on the level of operation of the Western Utilities Corporation (WUC), a wholly owned subsidiary of potable water plant. AIM-listed Watermark Global plc, to find a solution. DRDGOLD’s position has been that any solution had to be sustainable in the Samples of this water are analysed on a weekly basis and long-term (long after all mining companies in the region cease to communicated to the Tlokwe Municipality and DWA. In the period exist), economically viable and – critically – turn to account one of under review, the water was found to be of fairly good quality. the most constrained resources in South Africa, namely water.
Wonderfontein Spruit water sample register
SANS 241 SANS 241 Class 1 Class 2 drinking water drinking water mg/L mg/L Discharge water
Arsenic, As <0.01 0.01-0,05 0.03
Nickel, Ni <0.15 0.15-0.35 <0.003
Manganese, Mn <0.1 0.1-1 0.071
Lead, Pb <0.02 0.02-0.05 <0.01
Total Chromium, Cr <0.1 0.1-0.5 <0.003
Mercury, Hg <0.001 0.001-0.005 <0.001
Magnesium, Mg <70 70-100 75
Ph 5 – 9.5 4-10 8.6
Conductivity <150 150-370 140
Sulphates <400 400-600 482
DRDGOLD Sustainable Development Report 2011 39 Environmental performance continued �
DRDGOLD, Rand Uranium (Harmony) and Mintails co-funded the DRDGOLD, together with its WUC founding partners, then compiled costs of treating AMD before discharging it into the Tweelopies a revised proposal in which the companies would contribute a Spruit over a period of two years. This practice was agreed with the portion (with DRDGOLD providing approximately R13.5 million) regulator, while investigations into a solution were under way. of the funding required, with government making a contribution on behalf of the ownerless and derelict mines. This was submitted to DRDGOLD, Mintails and Harmony established a set of commercial DWA in 2010 for approval but was also rejected. parameters and approvals with the regulator which paved the way for WUC to obtain private funding in addition to the contribution A government-appointed body is currently investigating further that the mining companies were making to treatment costs. WUC options and has made funding available for the establishment of raised around R75 million on the capital markets which it applied short-term partial treatment plants in the Western and Central over a period of four years towards research and development basins. Implementation is expected to begin in September 2011. and the construction of a pilot plant. It also completed a bankable feasibility study in accordance with commercial and regulatory The water in the Central Basin is currently 425 metres below surface parameters which were consistently agreed with government. and rising at 0.35 metres per day. Partially-treated water from the Western Basin is currently decanting into the Tweelopies Spruit. The feasibility study indicated that treating the Western Basin water, In order to protect the groundwater, this polluted underground which amounts to 15 megalitres per day, would not be sustainable water in the Central Basin cannot be allowed to rise higher than and that a minimum quantity of 75 megalitres per day would be 150 metres below surface. Timing is therefore critical and failure required to achieve the requisite economies of scale. The solution to make progress in this regard is considered by DRDGOLD to be a to this was to combine the water from this basin with that of the significant environmental disappointment. Central (60 megalitres per day) and Eastern (75 megalitres per day) basins, which have similar water problems, so that an economically Energy usage viable water treatment plant could be established. DRDGOLD sources electricity from South Africa’s power utility, Eskom. As electricity is a critical component of costs – R332 million Studies indicated the best site for the plant is the currently disused (16%) of total cash costs in FY2011 – the company places a great high density separation water treatment plant at ERPM, which has deal of emphasis on its conservation. This is particularly relevant an approximate capacity of 80 megalitres per day. A pipeline would given the anticipated further increases in the cost of electricity in connect the Western and Central basins to stop the discharge of the coming years. any polluted water into the Tweelopies Spruit. This proposal was presented to government in late 2009, but was rejected.
Summary table of total of emissions:
Measure 2011 2010
Direct CO2 8 472 6 242
Indirect CO2 682 666 786 101
Travel 234 581
Total GHG 691 372 792 924
NOx 3 050 3019
SOx 5 355 5 571
SO2 – –
VOC 14 12
Carbon monoxide 36 31
Methane 2 –
Ozone-depleting substance – –
Particulate emissions 228 272
40 DRDGOLD Sustainable Development Report 2011 Summary table by division/entity of tonnes of emissions in 2010
Corporate Emission source Blyvoor Crown ERPM Ergo Office Total
Direct CO2 4 810 3 508 – 153 – 8 472
Indirect CO2 393 911 167 518 6 933 114 224 – 682 586
Travel 170 11 5 5 44 235
Total GHG 398 971 171 037 6 938 114 383 44 691 373
NOx 1 733 802 29 486 – 3 050
SOx 3 089 1 318 54 894 – 5 355
SO2 – – – – – –
VOC 6 8 – – – 14
Carbon monoxide 15 20 – 1 – 36
Methane 2 – – – – 2
Ozone-depleting substance – – – – – –
Particulate emissions 131 56 2 38 – 227
DRDGOLD works closely with Eskom in respect of its Demand Side with hydraulics has progressed. A costing exercise is currently being Management programme, so as to reduce its energy requirements undertaken and an area at 4 shaft is likely to become a test site. during peak consumption periods. This has been particularly A project to renew a main compressor at Blyvoor is currently being important for example at Blyvoor, where pumping of underground investigated, and through the use of newer and more efficient water to surface during peak demand hours has been significantly machinery, could potentially result in a 1MW saving. reduced. In FY2011, DRDGOLD’s total non-renewable electricity consumption Investigations into the installation of prepaid electricity meters in sourced from Eskom was 2 482 421 gigajoules (FY2010: 2 358 301 all houses in the Blyvoor mine villages were completed but this gigajoules). process was put on hold following union complaints. However, master meters have been installed to measure energy consumption Climate change and greenhouse gas emissions in these villages. DRDGOLD recognises that climate change presents a moderate risk to its operations because of rising the cost of energy and the An investigation into exchanging the use of compressed air implementation of possible usage caps and tariffs. It is anticipated generation, one of the most significant users of energy underground, that while South Africa was not a signatory to the Kyoto Protocol,
CO2 emissions by Direct CO2 emissions (%) power source (%) Blyvoor 57 Electricity 99 Crown 41 Diesel 1 ERPM 0 Ergo 2
Indirect energy consumption (gigajoules)
Operation 2011 2010
Blyvoor 1 432 695 1 390 161
Crown 609 156 575 791
Ergo 415 360 351 475
ERPM 25 210 40 874
Total 2 482 421 2 358 301
DRDGOLD Sustainable Development Report 2011 41 Environmental performance continued �
Fuel consumption consumption (litres)
Item Blyvoor Crown Ergo Total
Petrol 41 112 – – 41 112
Diesel 1 006 049 1 373 314 60 000 2 439 363
Waxy fuel 1 051 207 – – 1 051 207
it is likely that the country’s policies and legislation will be aligned through the year. Volatile organic compound (VOC) and carbon with the ongoing international climate change debate and that, monoxide emissions mostly record the relative diesel usage of the post-2012, regulations will be imposed. various operations of DRDGOLD.
DRDGOLD has considered other risks to the company posed by Monitoring and mitigating dust climate change, and those to local communities, including water Dust emissions, from current and historical dumps remain one of scarcity and rising water tariffs; floods and increasing precipitation the most significant environmental issues facing DRDGOLD and (which could have an impact on surface operations); food and water monitoring these forms an important part of daily environmental scarcity, and an increase in disease, which could have an impact on management. employees and communities. Dust emissions are captured at 1 488 monitoring points across Direct emissions of carbon dioxide (CO2) liquid and waxy DRDGOLD’s properties, sampled on a monthly basis and analysed fuel consumed on site, including travel kilometres claimed by against the South African National Standards (SANS). In 2011, DRDGOLD employees and amounted to 8 472 tonnes. By far the there were 18 instances where the dust levels exceeded the SANS greatest contributor to this is the diesel used by the operations. standard, which is an improvement on 115 instances in 2010.
Indirect CO2 emissions generated in the production of the electricity that DRDGOLD consumes amounted to A dust register is kept at each operation to record complaints from 682 666 tonnes in FY2011. As around 90% of electricity is the public. Complaints received related to dust emissions from derived from coal-fired power stations, indirect emissions are members of the public included two for Cason dump (ERPM) and significant. one for Top Star.
Nitrous oxide (NOx), sulphur (SOx) emissions and particulate When a complaint is received, the complainant is invited to meet emissions, primarily reflect emissions from diesel and electricity. with the company (where this is appropriate), and mitigating The relatively large proportion of diesel source NOx recorded is measures are then put in place where possible. Dust complaints a result of the higher emissions per unit (and therefore decreased are also discussed at quarterly community forum meetings held efficiency) of diesel compared with electricity.The rise in particulate in the Ekurhuleni area and monthly meetings are held with DMR matter recorded is an indication of Eskom’s increased emissions representatives regarding Cason dump.
Results from dust monitoring in 2011
Exceedances as a Exceedances as a Number of percentage percentage points Number of of total in of total in Operation monitored exceedances 2011 (%) 2010 (%)
Crown 876 13 3 10
Ergo 264 – – 4
ERPM 288 5 3 5
Blyvoor 60 – – –
Company 1 488 18 6 19
42 DRDGOLD Sustainable Development Report 2011 Mitigating measures to reduce dust include the use of vegetation Deep in preparation for the application for closure. The removal and where this is possible, watering down of active faces and haul roads, rehabilitation of the No 4 slimes dam at Blyvoor is around 90% and adding rock cladding and shade netting where necessary. During complete, with around 18 months remaining to complete this project. the year under review the company completed 117 hectares of remediation work on dumps (profiling, vegetation and/or cladding), No DRDGOLD sites enjoy statutory protection or are considered to 33 hectares at Crown, 43 hectares at Ergo, 35 hectares at ERPM be areas of high biodiversity. and 6 hectares at Blyvoor. In total, in FY2011, DRDGOLD spent R65 million (2010: R35.8 million) on dust mitigation measures. Sinkholes Sinkholes and subsidence or dolines (shallow depressions) occur Land management, biodiversity and closure naturally on the West Rand, which is underlain by dolomites – a DRDGOLD’s mining and processing footprint overlays an area type of limestone. Carbon dioxide-rich rainwater forms a weak acid that has been host to surface and underground mining for many and when this seeps through surface soils it can take up additional decades, and many of the environmental issues encountered are a acids from plant roots. In effect, this means that groundwater is legacy of previous mining activities. a weak acid and this has the effect of diluting the dolomites and accelerating their deterioration. This can result in sinkholes which, Land under management on average, are about 20 metres in diameter and 15 metres in Blyvoor, Crown and ERPM manage 4 506, 1 942 and 1 469 hectares, depth, or dolines on the surface. respectively.The land disturbed by mining activities is 4 023 hectares in the case of Blyvoor and 688 hectares in the case of ERPM. Crown Blyvoor monitors the occurrence of sinkholes very closely. Every six has cleared 239 hectares of land while 206 hectares have been months various points on surface are surveyed to measure if there cleared and developed or are in the process of being developed. is any ground subsidence. If there is a concern about any particular part of the mine property, this is surveyed on a weekly basis. Rehabilitation Rehabilitation of land formerly used for mining and processing All water leaks are dealt with immediately and residents are activities represents a significant environmental effort and cost encouraged to report any such leaks. When a sinkhole occurs, the for DRDGOLD. In 2011, the company spent R64.3 million on area is fenced off until the ground has stabilised. The cavity is then rehabilitation (FY2009: R31.5 million). Around seven hectares of filled in with building rubble or waste rock, capped with clay and side slopes were vegetated at the Crown Tailings Complex during re-vegetated. the year, 26 hectares at the Homestead TSF, around six hectares of side slopes at the Blyvoor TSF and 35 hectares at ERPM’s TSF. There were three sinkholes at Blyvoor in 2011 (six in 2010), all of which were filled and rehabilitated. DRDGOLD applies for exemption with respect to alien vegetation where this is necessary. For example, blue gum trees are not Closure planning indigenous but at some operations they are found near tailings Closure plans are in place at all operations as required in terms of dams where they absorb polluted water and act as a windbreak. their EMPs.The closure liabilities associated with each operation are In such a case, the company will prevent further spreading but will assessed on an annual basis by an external consultant and calculated not eradicate the trees as their benefits outweigh any problems in line with DMR guidelines. Rehabilitation trust funds are in place. associated with their growth. DRDGOLD has proposed to the DMR that, apart from Blyvoor, the difference between the liabilities and funding be covered through a ERPM continues with the rehabilitation of a redundant railway financial guarantee and this is being considered by the DMR. Blyvoor embankment; this is now around 70% complete. Central and SWV has proposed that revenue from the No 2 Shaft rock dump be ring- shafts at ERPM have been rehabilitated. Radiation clearance surveys fenced, which would result in this operation’s liabilities being fully have been conducted at all areas of ERPM and Durban Roodepoort funded. Again, this is being considered by the DMR.
Operation Net closure liabilities Trust funds
2011 2010 2011 2010 R’000 R’000 R’000 R’000
Blyvoor 77 289 71 564 33 529 31 846
Crown 165 955 132 122 56 476 52 287
Ergo 207 796 230 003 * *
ERPM 74 254 49 622 21 240 20 135
West Wits/West Rand Consolidated** 19 049 19 531 23 002 21 801
Total 544 343 502 842 134 247 126 069
**DRDGOLD is in the process of establishing guarantees and not a trust fund for this operation. These guarantees are not yet in place. **West Witwatersrand Gold Mine (Proprietary) Limited contractually sold the mine to Mintails during FY2010. The DMR will assess Mintails’ financial capability before legal transfer can occur.
DRDGOLD Sustainable Development Report 2011 43 Reporting in line with GRI
This is the third year that DRDGOLD has produced a sustainable development report. This report has been compiled in alignment with the principles of the Global Reporting Initiatives (GRI) G3.1 guidelines. For this report the company has declared a C level of reporting in accordance with GRI’s requirements for a self-declaration. It is the company’s intention to incrementally improve the level of reporting on sustainability matters, including seeking external assurance for the 2011 report. In view of this commitment, DRDGOLD submitted this report for verification. Please see the GRI application level check statement on page 46. Reporting in line with GRI – C level of reporting Page/s Level of reporting
G3 profile disclosures 1 Strategy and analysis 1.1 Statement by decision-maker 5 – 7 Fully 1.2 Description of key impacts, risks and opportunities 5 – 7 Fully 2 Organisational profile 2.1 – 2.10 Information on the company IFC, 2 – 4 Fully. 2.8 is also addressed on pages 16-17 of the Annual Integrated Report 3. Report parameters 3.1 – 3.4 Report profile 7, IFC Fully 3.5 – 3.11 Report scope and boundary IFC Fully 3.12 Content index 44 – 45 Fully 3.13 Assurance n/a Fully 4. Governance, commitments and engagement 4.1 – 4.10 Governance 10 – 13 Fully 4.11 – 4.13 Commitments to external initiatives 13 Fully 4.14 – 4.17 Stakeholder engagement 8 – 9 Fully G3 performance indicators Economic performance indicators Management approach 14 Fully EC1 Direct economic value generated and distributed 15 Fully EC2 Financial implications and other risks and opportunities for the organisation’s 41 – 42 Fully activities due to climate change EC3 Coverage of the organisation’s defined benefit plan obligations 15, 26 Partially EC4 Significant financial assistance received from government 15 Fully EC5 Range of ratios of standard entry level wage by gender 28 Fully EC6 Policy, practices and proportion of spending on locally-based suppliers at 16 Fully significant locations of operation EC7 Procedures for local hiring and proportion of senior management hired from local 26 Fully community at significant locations of operation EC8 Development and impact of infrastructure investments and services provided 31 – 32 Fully primarily for public benefit through commercial, in-kind or pro-bono engagement Environmental performance indicators Management approach 35 Fully EN1 Materials used by weight or volume 38 Fully EN2 Percentage of materials used that are recycled 38 Fully EN4 Indirect energy consumption by primary source 41 Fully EN8 Total water withdrawal by source 39 – 40 Fully EN11 Location and size of land owned, leased, managed in, or adjacent to, protected 43 Fully areas and areas of high biodiversity value outside protected areas Economic performance indicators (continued) EN12 Description of significant impacts of activities, products, and services on 43 Fully biodiversity in protected areas and areas of high biodiversity value outside protected areas EN16 Total direct and indirect greenhouse gas emissions by weight 41 – 42 Fully EN17 Other relevant indirect greenhouse gas emissions by weight 41 – 42 Fully EN20 NOx, SOx and other significant air emissions by type and weight 41 – 42 Fully EN21 Total water discharge by quality and destination 39 – 40 Fully EN28 Monetary value of significant fines and total number of non-monetary sanctions 12, 37 Fully for non-compliance with environmental laws and regulations.
44 DRDGOLD Sustainable Development Report 2011 Reporting in line with GRI – C level of reporting Page/s Level of reporting
G3 performance indicators (continued) Labour practices and decent work Management approach 26 Partially LA1 Total workforce by employment type, employment contract and region 28 Partially LA2 Total number and rate of employee turnover by age group and region 28 Partially LA3 Benefits provided to full-time employees that are not provided to temporary or 26 Fully part-time LA4 Percentage of employees covered by collective bargaining agreements 28 Fully LA5 Minimum notice periods regarding operational changes, including whether it is 26 Fully specified in collective agreements LA5 Percentage of total workforce represented in formal joint-management health 18 – 19 Fully and safety committees that help monitor and advise on occupational health and safety programmes LA6 Percentage of total workforce represented in formal joint management/worker 18 – 19 Fully health and safety committees LA7 Rates of injury, occupational diseases, lost days and absenteeism, and number of 20 – 21 Fully work-related fatalities by region LA8 Education, training, counselling, prevention and risk-control programmes in place 25 Fully to assist workforce members, their families, or community members regarding serious disease LA11 Programmes for skills management and lifelong learning that support the 28 – 30 Fully continued employability of employees and assist them in their career endings LA13 Composition of governance bodies and breakdown of employees per category 10, 13, 28 Fully according to gender, age group, minority group membership, and other indicators of diversity LA14 Rate of basic salary of men to women by employee category 28 Fully Human rights Management approach 26 Fully Society Management approach 31 Fully SO1 Nature, scope, and effectiveness of any programmes and practices that assess and 31 – 32 Fully manage the impacts of operations on communities, including entering, operating and exiting SO5 Public policy positions and participation in public policy development and 13 Fully lobbying SO8 Monetary value of significant fines and total number of non-monetary sanctions 12 Fully for non-compliance with laws and regulations Product responsibility PR1 Life cycle stages in which health and safety impacts of products and services are 34 Fully assessed for improvement, and percentage of significant products and services categories subject to such procedures PR2 Total number of incidents of non-compliance with regulations and voluntary 34 Fully codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes PR4 Total number of incidents of non-compliance with regulations and voluntary 34 Fully codes concerning product and service information and labelling, by type of outcomes PR5 Practices related to customer satisfaction, including results of surveys measuring 34 Fully customer satisfaction n/a = not applicable
Report application level C C+ B B+ A A+
Report on: Report on all criteria listed for Same as requirement for 1.1 Level C plus: Level B Profile disclosures 2.1 2.10 1.2
OUTPUT 3.1 3.8, 3.10 3.12 3.9, 3.13 4.1 4.4 , 4.14 4.15 4.5 4.13, 4.16 4.17
Not required Management approach Management approach disclosed Management disclosures for each for each indicator category
approach indicator category disclosures
OUTPUT Report externally assured Report externally assured Report externally assured Report on a minimum of 10 Report on a minimum of 20 Respond on each core G3 and Performance Performance Indicators, including performance indicators, at least sector supplement* indicator with Standard disclosures indicators and at least one from each of: social, one from each of: economic, due regard to the materiality sector supplement economic, and environment.** environment, human rights, labor, principle by either: a) reporting on
performance indicators OUTPUT society, product responsibility.*** the indicator or b) explaining the reason for its omission.
* Sector supplement in final version ** Performance indictors may be selected from any sector supplement, but 7 of the 10 must be from the original GRI guidelines *** Performance indicators may be selected from any finalised sector supplement, but 14 of the 20 must be from the original GRI guidelines
DRDGOLD Sustainable Development Report 2011 45 46 DRDGOLD Sustainable Development Report 2011 Mining charter compliance �
No Description Compliance Page/s
1. Human resource development Has the company offered every employee the opportunity to be functionally literate and numerate by the year 2005 and are employees being trained? Yes 28 – 29 Has the company implemented career paths for HDSA employees, including skills development plans? Yes 28 – 30 Has the company developed systems through which empowerment groups can be mentored? Yes 28 – 30 2. Employment equity Has the company published its employment equity plan and reported on its annual progress in meeting that plan? Yes 28 Has the company established a plan to achieve a target for HDSA participation in management of 40% within five years and is it implementing the plan? Yes 28 Has the company identified a talent pool and is this being fast tracked? Yes 28 – 30 Has the company established a plan to achieve the target for the participation of women in mining of 10% within the five years and is it implementing the plan? Yes 26 3. Migrant labour Has the company subscribed to government and industry agreements to ensure non-discrimination against foreign migrant labour? Yes 26 4. Mine community and rural development Has the company co-operated in the formulation of integrated development plans and is the company co-operating with government in the implementation of these plans for communities where mining takes place and for major labour-sending areas? Yes 31 – 32 Has there been effort on the side of the company to engage the local mine community and communities in major labour-sending areas? Yes 31 – 32 5. Housing and living conditions For company provided housing, has the mine, in consultation with stakeholders, established measures for improving the standard of housing, including the upgrading of hostels, conversion of hostels to family units and promoted home ownership options for mine employees? Yes 30 Companies will be required to indicate what they have done to improve housing, show a plan to progress the issue over time and whether such a plan is being implemented. Yes 30 For company-provided nutrition, has the mine established measures for improving the nutrition of mine employees? Companies will be required to indicate what they have done to improve nutrition and show a plan to progress the issue over time and whether such a plan is being implemented. Yes 30 6. Procurement Has the mining company given HDSAs preferred supplier status? Yes 16 Has the mining company identified current levels of procurement from HDSA companies in terms of capital goods, consumables and services? Yes 16 Has the mining company indicated a commitment to progress of procurement from HDSA companies over a three- to five-year time frame in terms of capital goods, consumables and services, and to what extent has the commitment been implemented? Yes 16 7. Ownership and joint ventures Has the mining company achieved HDSA participation in terms of ownership for equity or attributable units of production of 15% in HDSA hands within five years and 26% in 10 years? Yes 16 8. Beneficiation Has the mining company identified its current level of beneficiation? Yes 16 Has the mining company established its baseline level of beneficiation and indicated the extent that this will have to be grown in order to qualify for an offset? No 9. Reporting Has the company reported on an annual basis its progress towards achieving its commitments in This its annual report? Yes report
DRDGOLD Sustainable Development Report 2011 47 Glossary of terms and acronyms �
ABET Adult Basic Education and Training
AIDS Acquired Immune Deficiency Syndrome
AMD Acid mine drainage
ART Anti-retroviral therapy
BEE Black economic empowerment
Blyvoor Blyvooruitzicht Gold Mining Company Limited
CIL Carbon-in-leach, a gold recovery process
CIP Carbon-in-pulp, a gold recovery process
COPA Community of Practice for Adoption
CO2 Carbon dioxide
Crown Crown Gold Recoveries (Pty) Limited
CSI Corporate social investment
dBA Decibels – unit of sound measurement
DMR Department of Mineral Resources
DRD Durban Roodepoort Deep (discontinued operation)
DSIFR Dressing Station Injury Frequency Rate
DWEA Department of Water and Environmental Affairs
EBDA Ekurhuleni Business Development Academy
EC Electrical conductivity
EIA Environmental Impact Assessment
EMP Environmental Management Programme
Ergo Mining Operations Limited Crown, ErgoGold, Ergo Mining Limited and ERPM
ERPM East Rand Proprietary Mines Limited
ESOP Employee share ownership plan
FIFR Fatal Injury Frequency Rate
FOG Fall of ground
GDP Graduate development programme
GHG Greenhouse gas
GRI Global Reporting Initiative
HDSA Historically disadvantaged South African
HIV Human Immuno-deficiency Virus
King III Report King Report on Corporate Governance for South Africa
LED Local economic development
LTIFR Lost Time Injury Frequency Rate
48 DRDGOLD Sustainable Development Report 2011 � MBOD Medical Bureau for Occupational Diseases mg/L Milligrams per litre
MHSC Mine Health and Safety Council
Mining Charter Broad-based Socio-economic Empowerment Charter for the South African Mining Industry
MPRDA Mineral and Petroleum Resources Development Act, 28 of 2002, which came into effect in South Africa on 11 May 2004
MQA Mining Qualifications Authority
NIHL Noise-induced hearing loss
NNR National Nuclear Regulator
NOx Nitrous oxide
NQF National Qualifications Framework
NUM National Union of Mineworkers
OLD Occupational lung disease pH Measure of the acidity or alkalinity of a solution
RIFR Reportable Injury Frequency Rate
SANS South African National Standards
Sarbanes-Oxley Act The Sarbanes-Oxley Act came into force in July 2002 in the United States and introduced major changes to the regulation of corporate governance and financial practice. It is named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, and it set a number of non-negotiable deadlines for compliance.
SMMEs Small, medium and micro enterprises
SO2 Sulphur dioxide
SOX Sulphur emissions
TB Tuberculosis
Transco Transformation and Sustainable Development Committee
UASA UASA – the Union
UF Ultra filtration
VCT Voluntary counselling and testing
VOC Volatile organic compound
WUC Western Utilities Corporation
DRDGOLD Sustainable Development Report 2011 49 Feedback form
DRDGOLD would be grateful for your feedback and invites you to What are your areas of interest in this report? complete this form and fax or email it to: Barry de Blocq o Economic performance Fax: +27 11 470 2618 o Social performance E-mail: [email protected] o Safety o Health Personal details o HIV & AIDS Name: o Labour practices and human rights Organisation: o Local development and corporate Tel: Fax: social investment Email address: o Environmental performance Postal address: Did you read the message from the CEO?
What is your interest in or association with o Yes o No DRDGOLD? Were DRDGOLD’s sustainable development o Employee o Analyst o Shareholder issues and how they are being dealt with clearly o Journalist o Community member communicated in this report? o Non-governmental/community-based organisation o Yes o No o Student o Business partner o Supplier o Government representative Do you use the Global Reporting Initiative (GRI) Other – please specify: index?
o Yes o No
How did you become aware of our report? Do you have any other comments on the report? o Delivered or posted to you (printed copy) o Email link sent to you o Through the media Other – please specify:
How did you view the report?
o Website version o Printed version Have you been aware of or had access to DRDGOLD’s previous reports?
o Yes o No
How would you describe the report?
o Printed version o Too much information o Not enough information o Website version o Too much information o Not enough information
50 DRDGOLD Sustainable Development Report 2011 Contact details and administration
Directors Company Secretary
Geoffrey Campbell Themba Gwebu Non-executive chairman Auditors Niël Pretorius Chief Executive Officer KPMG Inc
Craig Barnes Attorneys Chief Financial Officer Feinsteins Attorneys Bowman Gilfillan Inc Rob Hume Skadden, Arps, Slate, Meagher and Flom (UK) LLP Independent Non-executive Edward Nathan Sonnebergs Inc Edmund Jeneker Independent Non-executive Bankers The Standard Bank of South Africa Limited James Turk Independent Non-executive Offices
Audit Committee Registered and Corporate Quadrum Office Park Rob Hume (chairman) 1st Floor, Building 1 Geoffrey Campbell 50 Constantia Boulevard Edmund Jeneker Constantia Kloof Ext 28 Remuneration Committee 1709 South Africa Edmund Jeneker (chairman) Geoffrey Campbell PO Box 390 Rob Hume Maraisburg James Turk 1700 South Africa Nominations Committee Tel: +27 11 470 2600 Geoffrey Campbell (chairman) Fax: +27 11 470 2618 Rob Hume Statutory and listing information Risk Committee DRDGOLD Limited Niël Pretorius (chairman) (Incorporated in the Republic of South Africa) Craig Barnes (Registration number: 1895/000926/06) James Turk ARBN number: 086 277 616 Geoffrey Campbell JSE trading symbol: DRD Edmund Jeneker ISIN code: ZAE 000058723 Rob Hume Issuer code: DUSM Nasdaq trading symbol: DROOY Social and Ethics Committee (‘DRDGOLD’ or ‘the company’)
Edmund Jeneker (chairman) DRDGOLD’s ordinary shares are currently listed on the JSE Limited Niël Pretorius and on the Nasdaq Capital Market in the form of American Craig Barnes Depositary Receipts (ADRs). The company’s shares are also traded on the Marché Libre in Paris, the Regulated Unofficial Market on the Frankfurt Stock Exchange, the Berlin and Stuttgart OTC markets, as well as on the Euronext Brussels, in the form of International Depositary Receipts.
DRDGOLD Sustainable Development Report 2011 51 Notes
52 DRDGOLD Sustainable Development Report 2011 www.drdgold.com