Media releases

DRD mine Mothballs Shaft

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Published: Friday, 31 March 2000 02:00

Johannesburg, 31 March 2000 - The DRD group's Durban Roodepoort Deep mine announced today that it was mothballing its loss-making No 6 Shaft with immediate effect. Johannesburg, 31 March 2000 - The DRD group's Durban Roodepoort Deep mine announced today that it was mothballing its loss-making No 6 Shaft with immediate effect. The shaft produces about 19 000 ounces of gold (585 kilograms) per annum, which represents some 2.8% of the group's total production.

Group chief executive Mike Prinsloo said the shaft had served shareholders and the industry well, but it could not be kept going following the recent drop in the gold price, the cessation of synergies with neighbouring Randfontein Estates following its acquisition by Harmony, and the additional pumping cost caused by the abnormal influx of extraneous water as a result of the recent heavy rain.

"A key part of the DRD group's strategy has been to prolong the life of marginal mines for as long as possible. This has certainly been the case at No 6 Shaft, where production has been continued and jobs have been provided for much longer than the industry norm," Prinsloo said.

"Should there be a sustained recovery in the gold price, production at this shaft as well as the other mothballed shafts at Durban Roodepoort Deep and West Wits mines will be reviewed. If they can stand alone and make a contribution, we will consider reopening them. They are all blue sky opportunities at higher prices. This closure marks the end of the company’s programme to adjust to the changed fundamentals in the gold market."

Prinsloo said the decision to mothball the shaft had been taken after extensive consultation with unions and associations. A total of 578 production employees and 60 service department employees will be affected and will be treated in accordance with the group's retrenchment agreement.