Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Central Rand Gold (JNB:CRD) is seeking help from the Pretoria High Court to keep operating after its mining license was set aside by the South African Department of Mineral Resources.
On Monday Central Rand Gold, a company focused on gold prospecting and mining in the Central Rand Goldfield of South Africa, learned its mining license would be cancelled because it failed to carry through with various environmental and labour guidelines.
“[Central Radn Gold] committed under the terms of its mining right to spend an amount of R32.9m on various Social Labour Projects (“SLP”) in its first two years, however the actual spend was R18.8m,” said the company in a statement.
“The original mining right application was based on the premise of having access to the Main Reef resource base of 3,250,000oz, whilst in reality; only 431,000oz is now available due to the Acid Mine Drainage (“AMD”) situation in the Central Basin.
“The shortfall of R14 million is due to lower human resource development from the lower staff numbers required by the Company due to the revisions to its mining plans and the delay in implementing Local Economic Development (LED) programs, mainly as a result of the unavailability of suitable land. In recognition of the shortfall, CRG requested meetings with the Department of Mineral Resources (“DMR”) on various occasions since December 2010 to discuss this matter. Unfortunately, our requests did not lead to any meetings being held. CRG also made recommendations in June 2011 to revise the original SLP commitments base in line with the limited availability of the resource base at CRG’s disposal.
