Johannesburg, South Africa — esiafrica.wpengine.com — 25 October 2010 – DRDGOLD Limited – a medium-sized gold producer with several operations and exploration activities in Southern Africa “’ has laid particular blame at the door of electricity parastatal Eskom for pushing up its total cash operating costs to R520.7 million.
In his latest results statement, DRDGOLD CEO Niel Pretorius revealed that operating profit had been R22.1 million lower at R69.4 million due to the company’s 11% increase in total cash operating costs, as well as the lower Rand gold price.
“Cost drivers during the last quarter were power – in particular, power utility Eskom’s higher winter surcharge which it levies for three months on top of its normal tariff – and annual wage increases,” he said in an interview with ESI-AFRICA.COM.
Pretorius pointed out that the higher winter power surcharge added R27.8 million to cash costs.
“Cash operating profit would have been R97.2 million – 6% higher than in the previous quarter – but for what he called “this peculiar practice on the part of Eskom, for which we receive no value.”
He announced his intention of raising the issue with the Chamber of Mines. “I’m certain that other mines have the same problem as DRDGOLD, and I believe that as the representative body of the mining industry, the Chamber should take a stand on this issue,” Pretorius concluded.