Where’s the gold pay-off for communities, asks DRDGold CEO

DRDGold CEO Niël Pretorius has expressed concern that despite the tax revenue bonanza that the soaring gold price has gifted the fiscus, only a fraction of the money is being spent on the communities where companies such as his operate.

DRDGold, which processes gold tailings, said this week its broader tax contribution was over R1bn for the year ended June 2026 after its operating profit surged 83% to R6.45bn following a 40% gold price rally in the period.

“The sad reality is that we see very little evidence of any of that R1bn finding its way back into our surrounding communities. If you look at the kind of services that are provided there, and the kind of help that our company needs to provide, it is for basic things to be delivered into those communities,” he said.

Pretorius said it was time for a deep dive into how tax revenues are being reinvested at grass roots level. In addition to taxes and royalties, the mining companies are required to help to improve skills and infrastructure in the areas where they operate.

“As a percentage of our contribution into the fiscus, we’ve seen very little of that being ploughed back into our communities, into the areas where we operate, very little, which is wrong,” he said.

According to Minerals Council South Africa, which represents 90% of production, in 2025 the industry contributed more than R100bn to the national fiscus through corporate taxes, royalties, VAT payments and the personal income tax paid by employees.

As a percentage of our contribution into the fiscus, we’ve seen very little of that being ploughed back into our communities, into the areas where we operate, very little, which is wrong.

The mining industry accounted for 5.8% of GDP in 2025, or about R439bn, and provided 469,765 direct jobs in the first nine months of 2025, representing about 4.5% of total formal sector employment, according to the council.

The DRDGold share price jumped about 5% on the JSE on Wednesday after the financial results were announced. Revenue increased by 42% to R11.2 bn, while gold output for the period hit 4,839kg, exceeding company guidance.

“This was a year of delivery. We maintained production while investing at a level that is fundamentally reshaping the business, and we did that while remaining debt-free and continuing to return value to shareholders,” Pretorius said.

The strong performance comes as DRDGold is implementing Vision 2028, a four-year R10bn capital investment plan designed to lift combined tailings throughput at the Ergo operation and Far West Gold Recoveries from 2.15Mt to 3Mt a month, and to raise annual gold production towards about 6t by 2028.

Pretorius said the group was more than halfway through the programme, with just over R5bn spent to date. At Ergo, the Daggafontein tailings storage facility started receiving water in June and first tailings were delivered in July, reducing reliance on the mature Brakpan tailings storage facility.

At Far West, the expanded Driefontein 2 plant’s new elution circuit — which strips gold from activated carbon — and smelt house were commissioned in July.