Going it alone: Processing facilities at the Ergo Mining metallurgical gold processing plant, operated by DRDGold in Brakpan. The company will not participate with other firms in a R5bn joint payment to workers affected by lung disease. Picture: BLOOMBERG
Going it alone: Processing facilities at the Ergo Mining metallurgical gold processing plant, operated by DRDGold in Brakpan. The company will not participate with other firms in a R5bn joint payment to workers affected by lung disease. Picture: BLOOMBERG

DRDGold declined to be party to last week’s R5bn out-of-court settlement jointly with six other mining companies, to compensate gold mineworkers affected by lung ailments, opening the smaller gold producer to a prolonged court battle alone.

The six companies made history last week by settling SA’s largest and most complex class action case out of court.

One of the lawyers representing the litigants, human rights lawyer Richard Spoor, noted that DRDGold and Randgold & Exploration had decided not to participate in the settlement agreement and would be subject to ongoing litigation.

DRDGold CEO Niel Pretorius declined to comment on the reasons for staying out of the settlement, saying there was likely to be a litigation process brought against the company and he could not make any remarks at this point.

In the company’s most recent annual report, however, the point is raised that it was "not possible" to see what the outcome of the matter would be.

Small exposure

For a company like DRDGold, which had relatively small exposure to underground gold mining and is a small company compared with the six that have settled, the cost of participating in the out-of-court settlement would be an expensive exercise compared to what the outcome could be from litigation.

The litigants’ lawyers would have to prove DRDGold was negligent in the way it handled the silicosis and dust matter and that a subsidiary established liabilities for the holding company.

DRDGold has not operated underground mines for years, preferring to extract gold from old dumps.

In an astonishing admission at the media briefing after the agreement was signed last week, Health Minister Aaron Motsoaledi conceded that if the health department’s Medical Bureau for Occupational Diseases fund, which was set up decades ago, had been properly administered and operated, this pursuit of mining companies would never have happened because ill workers would have received compensation and assistance from the body.

In a clear case of the private sector coming to the assistance of the government, the help proffered by mining companies to the Department of Health to revive the moribund fund has resulted in a steep increase in the number of beneficiaries receiving payments from the fund, which has grown to R4bn from R3bn in recent years, Motsoaledi said.

The failure of the administrators of that fund has resulted in shareholders in the six companies forfeiting R5bn.

DRDGold posted a post-tax profit of R14m in 2017 and had cash of R254m.

seccombea@bdfm.co.za