DRDGold had agreed to allow water infrastructure authorities to access its land to build a pipeline and plant for treating acid discharged from derelict mines that is contaminating Johannesburg’s groundwater, the gold mining company said on Friday.

The Trans-Caledon Tunnel Authority would have access to DRDGold’s land and a shaft to build the plant, it said.

The state agency would also be allowed to build a pipeline on the land and use one of the company’s sludge dams.

“While these heads of agreement should not be seen as an unqualified endorsement of the state’s acid mine drainage solution, and do not affect our right to either challenge future directives or to implement our own initiatives should it become necessary, they are an encouraging development,” chief executive Niel Pretorius said.

DRDGold stock advanced 0.16 percent to R6.46 on Friday. – Bloomberg