Posted on: March 6, 2009 Posted by: Diane Swarts Comments: 0

Pamodzi Gold’s financial woes are on the increase with their Grootvlei mine in Ekhuruleni (East Rand) being forced to cut back on pumping water out because of a cash crisis.

There are grave implications for Grootvlei and neighbouring Sub Nigel with a possibility of flooding.

Graham Chamberlain, general manager of Pamodzi Gold’s Ekhuruleni, believes that the situation is temporarily under control. According to Chamberlain, Pamodzi issued a flood warning to neighbouring mines two weeks back.

Grootvlei requires lime to treat the water so it can be discharged into nearby rivers in accordance with environmental requirements the mine must abide by. The pumping had to be cut back as the company supplying lime to Grootvlei refused to deliver anything unless they were paid cash on delivery.

Though concerns over flooding at Grootvlei stemmed from Pamodzi Gold’s financial woes, the problems associated with pumping water from the Ekhuruleni basin had been there for the past 15 years.

Grootvlei is the last remaining mine in the area, except for Sub Nigel which was reopened recently, and as such, is now responsible for pumping all the water out of the region. All the other mines have been closed down.

The cost of pumping the water is R54m a year, which is quite a sizeable amount for a marginal gold mine.

The issue of who should bear the costs has been argued heatedly with the various owners of Grootvlei maintaining that it is unreasonable to expect the mine to bear the full cost of pumping water for mines that had closed down.

The environmental issues have led to frequent ownership change at Grootvlei with five different owners since the 90s.

The Department of Minerals and Energy (DME) occasionally helps Grootvlei out with a pumping subsidy but according to Chamberlain, Grootvlei was bearing the full cost on its own at the moment.

Graham Chamberlain believes that the ideal solution is to build a treatment plant to purify the underground water to drinkable standards for sale to industry and the Rand Water Board.

Should Pamodzi Gold collapse and not pump the water at all, the polluted water would rise the remaining 750m to the surface within a few years and start pouring out at a number of points – one of which is the middle of the town of Nigel.

Source: Mining MX