As it becomes increasingly imperative for mines to ensure responsible closure, gold recycling company DRDGOLD Niël Pretorius has said it is important for mining companies to implement realistic environmental, social and governance (ESG) initiatives that will not backfire later when goals cannot be met.

He spoke during a University of the Witwatersrand Mining Institute seminar, highlighting the importance of rehabilitating land during operations and not delaying it until assets reach the end of their lives.

As a company, DRDGOLD is already part of the circular economy in mining existing lower-grade gold assets, but it nonetheless focuses on improving operations.

The financial cost to restore the environment and sustain operations grows with time, leading to a growing boomerang effect on large corporations that can often not afford to rehabilitate mine properties properly or end up in litigation over decade-long closed assets.

The spotlight on mining companies’ reputation and legacy has increased with the likes of activist law firms and nonprofit organisations scrutinising the industry, particularly mine closure, Pretorius explained.

He added that there was an economic opportunity to implement relevant ESG initiatives regardless of this scrutiny.

Not only does a good reputation enable greater access to finance for mining companies, but ESG often pays for itself and does not require further fundraising.

For example, DRDGOLD has consistently reduced the amount of potable water it consumes by recycling water at its operations in South Africa, which has lowered supply risks, reduced costs and improved the group’s environmental credentials.

In turn, its 60 MW solar plant at the Ergo operation has reduced supply risk, reduced carbon emissions and lowered costs for the company.

Pretorius emphasised the need for an integrated approach and implementing ESG in a cost-saving or otherwise economically, socially or environmentally returnable manner for mining companies.

He mentioned that DRDGOLD’s social upliftment in communities was focused on education and providing opportunities for learning, rather than handouts. Pretorius said it was important to invest in initiatives that could activate the informal economy and allow communities to become self-sustaining, which was a more empowering solution.

DRDGOLD has ultimately managed to lower its risk profile, build a better reputation and ensure financial sustainability with its model and approach to ESG throughout operations from startup level to closure.