Integrated Annual Review 2011
For the 12 months ended 31 December 2011
4
4
Contents
Introduction ............................................................Page 2
1. Overview and strategy .......................................Page 6
Vision of the Chair ....................................................... Page 8
Q&A with the Chief Executive Officer ....................... Page 11
Delivering on our objectives for 2011 and 2012 ........ Page 18
2. Transparency and accountability .....................Page 22
Corporate governance .............................................. Page 24
Risk management ..................................................... Page 36
Investors and stakeholder engagement .................... Page 40
3. Optimising our operations................................Page 44
Ensuring our mines deliver ........................................ Page 46
Our approach to operational excellence .................. Page 48
The Gold Fields safety promise................................. Page 56
Respecting and protecting the environment ............. Page 61
Regional overview: Australasia ................................. Page 72
Regional overview: South Africa................................ Page 78
Regional overview: South America............................ Page 88
Regional overview: West Africa ................................. Page 92
4. Growing Gold Fields ........................................Page 98
Sustainability and the new growth environment ...... Page 100
Expanding our growth pipeline ............................... Page 108
Mineral Resource and Mineral Reserve Statement . Page 119
5. Securing our future responsibly .....................Page 126
Becoming the employer of choice .......................... Page 128
Promoting productivity, health and wellbeing ......... Page 136
Building mutually beneficial community relations ... Page 141
Forging strong relations through business ethics ... Page 154
6. First, second and third party assurance ........Page 160
Further resources
The Integrated Annual Report 2011 is made up of the
following three volumes:
(cid:2)(cid:3) Integrated Annual Review 2011
(cid:2)(cid:3) Annual Financial Report 2011
(cid:2)(cid:3) Mineral Resources and Mineral Reserves
Overview 2011
For further details click below or visit our website at:
www.goldfields.co.za
2
Introduction
About Gold Fields
About this report
Gold Fields is one of the world’s
largest unhedged gold producers,
with attributable annual production
of 3.5 million gold equivalent
ounces from eight operating mines
in Australia, Ghana, Peru and
South Africa. Gold Fields also has
an extensive and diverse global
growth pipeline with four major
projects in resource development
and feasibility, with development
decisions expected in the next 12
to 36 months.
Gold Fields has total attributable
gold equivalent Mineral Resources
of 217.0 million ounces and Mineral
Reserves of 80.6 million ounces.
Gold Fields is listed on the JSE
Limited (primary listing), the New
York Stock Exchange (NYSE),
NASDAQ Dubai Limited, Euronext
in Brussels (NYX) and the Swiss
Exchange (SWX).
The Gold Fields Integrated
Annual Report 2011, which covers
the 12 months to end-December
20111, is made up of the following
three volumes:
(cid:2)(cid:3) The Integrated Annual Review
2011, which examines
the integrated nature of
our operational and
sustainability performance
(cid:2)(cid:3) The Annual Financial Report
2011, which fulfils our statutory
financial reporting requirements
(cid:2)(cid:3) The Mineral Resources and
Mineral Reserves Overview 2011,
which provides detailed technical
and operational information on
our mines and growth projects
This Integrated Annual Review
provides an overview of Gold Fields
eight global operations on a Group
and mine-by-mine basis. The report
also describes our exploration and
business development activities.
We do this using an integrated
approach to reporting that examines
our operational, sustainability and
financial performance.
The aim of our integrated approach
is to enable investors and other
stakeholders – including host
governments, local communities
and our employees – to make a
more informed assessment of
the value of Gold Fields and our
ability to flourish in the new growth
environments of tomorrow.
1 Our previous Integrated Annual Report was
for the six months to end-December 2010.
Unless otherwise indicated, all references to
years within the Integrated Annual Review
2011 (e.g. 2009, 2010, 2011) refer to the
relevant calendar year (e.g. 1 January to
31 December 2009, etc.)
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
3
Introduction
“Strategy, risk, performance
and sustainability have become
inseparable; hence the phrase
‘integrated reporting’”
Mervyn E King, King Committee Chairman
(King Code of Governance Principles for South Africa 2009)
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We believe the Integrated Annual
Review, together with additional
documents held online, represents
an A+ application of the Global
Reporting Initiative (GRI) G3.1
Sustainability Reporting Guidelines,
which is the widely recognised best-
practice benchmark for corporate
reporting. Our auditors, KPMG,
have provided independent
assurance on selected sustainability
information (p167) as well as our
GRI A+ self-declaration.
This Integrated Annual Review also
forms part of our Communication
on Progress to the United Nations
Global Compact. A summary of
our compliance with the GRI and
the 10 Principles of the United
Nations Global Compact – as
well as our alignment with related
standards including the Millennium
Development Goals (MDGs) and
the International Council on Mining
& Metals (ICMM) 10 Principles – is
presented online.
www.globalreporting.org
www.unglobalcompact.org
www.un.org
www.icmm.com
Forward looking statements
Certain statements in this document
constitute “forward looking
statements” within the meaning of
Section 27A of the US Securities Act
of 1933 and Section 21E of the US
Securities Exchange Act of 1934.
Such forward looking statements
involve known and unknown risks,
uncertainties and other important
factors that could cause the
actual results, performance or
achievements of the company to
be materially different from the
future results, performance or
achievements expressed or implied
by such forward looking statements.
Such risks, uncertainties and other
important factors include among
others: economic, business and
political conditions in Australia,
Ghana, Peru, South Africa and
elsewhere; the ability to achieve
anticipated efficiencies and other
cost savings in connection with past
and future acquisitions, exploration
and development activities;
decreases in the market price
of gold and/or copper; hazards
associated with underground and
surface gold mining;
labour disruptions; availability, terms
and deployment of capital or credit;
changes in government regulations,
particularly environmental regulation
and new legislation affecting
mining and mineral rights; changes
in exchange rates; currency
devaluations; inflation and other
macro-economic factors; industrial
action; temporary stoppages of
mines for safety and unplanned
maintenance; and the impact of the
HIV/AIDS crisis in South Africa.
These forward looking statements
speak only as of the date of this
document. The company undertakes
no obligation to update publicly
or release any revisions to these
forward looking statements to
reflect events or circumstances
after the date of this document
or to reflect the occurrence of
unanticipated events.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
4
Introduction
Figure 3: Group operating statistics
Category
2011
2010
2009
2008
2007
Gold produced – attributable (kg)
108,408
108,802
111,421
103,541
122,367
Gold produced – attributable (‘000oz)
3,485
3,497
3,582
3,329
Total cash cost (R/kg)
Total cash cost (US$/oz)
184,515
165,526
146,456
138,665
795
703
540
526
3,934
95,846
423
Notional Cash Expenditure (NCE) (R/kg)
272,224
239,796
210,215
210,827
139,796
Notional Cash Expenditure (NCE) (US$/oz)
1,173
1,019
776
800
618
Gold price (R/kg)
Gold price (US$/oz)
Operating profit (Rm)
Operating costs (Rm)
Operating margin (%)
NCE margin (%)
364,216
287,150
261,517
228,160
157,275
1,569
21,112
21,312
50
25
1,220
14,469
20,082
42
161
965
13,589
18,368
43
20
865
9,427
695
7,568
16,026
12,947
37
8
37
11
Figure 4: Group sustainability statistics2
Category
Economic value distributed (Rm)
Economic value distributed (US$m)
Total taxation and royalties paid (Rm)3
Total taxation and royalties paid (US$m)3
Employee wages and benefits (Rm)
Employee wages and benefits (US$m)
Total employees
Fatalities
Lost Time Injury Frequency Rate (LTIFR)5
Cyanide consumption (tonnes)
CO2-e emissions ('000 tonnes)6
Electricity consumption (MWh)
Water withdrawal (million liters)
Socio-Economic Development spend (US$m)7
2011
26,629
3,688
3,336
478
7,951
1,101
46,378
20
4.69
23,750
5,298
2010
25,658
3,506
2,0514
275
7,514
1,027
47,268
18
4.39
21,487
5,350
2009
2008
22,794
20,557
2,704
2,098
249
6,612
784
2,506
1,307
159
5,804
708
51,122
49,325
26
3.91
22,165
5,507
31
5.34
18,922
5,212
5,469,784
5,580,332
5,465,628
5,185,927
78,236
54
76,326
67
72,403
11
75,950
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1 Restatement – previously reported as 17%
2 Assured sustainability data for the 12 months ended 31 December
2011 are provided alongside the third party assurance statement
on p167
3 Excluding deferred tax
4 Restatement – adjusted from R2,202 million
5 Per million hours worked. Please note, the figures for 2009 and 2010
are restatements due to the implementation of a more accurate
methodology for the calculation of hours worked – as well as the
identification of past anomalies related to the shift from financial year
to calendar year in 2010. Previously, these figures were reported as
3.81 and 4.38 respectively
6 This includes Scope 1 and 2 emissions, but not fugitive mine
methane emissions
7 See p143 for a definition of Socio-Economic Development
(SED) spend
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:9)(cid:10)(cid:8)(cid:11)(cid:6)(cid:12)(cid:5)(cid:13)(cid:8)(cid:14)(cid:15)(cid:16)(cid:15)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)(cid:19)(cid:20)(cid:16)(cid:20)(cid:3)(cid:19)(cid:20)(cid:3)(cid:17)(cid:19)(cid:8)
Category
Revenue (Rm)
Basic earnings – cents per share
Headline earnings – cents per share
Dividends declared – cents per share
Total assets (Rm)
Shareholders’ equity (Rm)
Cash and cash equivalents (Rm)
Cash flows from operating activities (Rm)
Cash generated/(utilised) (Rm)
EBITDA (Rm)
Net debt (Rm)
Net debt: EBIDTA
Net asset value per share (R)
Return on capital employed (%)
Average rate US$1 = R
Closing rate US$1 = R
Ordinary share price – high
Ordinary share price – low
Ordinary share price – year end
Average daily volume of shares traded
(million)
American Depository Receipts (ADRs)
(US$) – high
American Depository Receipts (ADRs)
(US$) – low
American Depository Receipts (ADRs)
(US$) – year end
Average daily volume of shares traded
(million)
Number of shares in issue (million)
Market capitalisation at year end (Rbn)
5
Introduction
2011
2010
2009
2008
2007
41,877
34,391
31,772
25,360
20,470
973
970
330
83,352
48,062
6,049
15,746
(80)
21,112
9,460
0.45
115.17
29
7.22
8.13
143.00
95.60
124.60
2.2
18.55
13.80
16.28
4.0
723.7
90.2
161
177
140
71,061
46,623
5,464
12,373
3,867
14,469
3,974
0.27
98.59
23
7.32
6.75
125.90
83.80
120.60
2.3
18.49
11.08
18.13
4.9
720.8
86.9
492
611
130
66,276
44,725
1,828
8,597
852
13,589
6,669
0.49
93.96
23
8.43
7.51
400
406
215
66,402
43,282
1,054
7,362
(533)
9,427
9,354
0.99
101.62
15
8.20
9.65
504
248
95
53,766
37,885
1,321
2,133
(975)
3,754
5,092
1.36
82.40
7
7.04
7.02
123.50
135.00
142.00
77.37
97.98
2.9
15.82
7.94
13.11
6.7
705.4
69.1
54.00
91.90
3.1
17.61
4.90
9.93
7.5
653.4
60.1
93.58
99.00
2.9
20.08
13.61
14.20
4.6
652.5
64.6
Figure 6: Attributable Mineral
Resources by region
(million Au-Eq oz)
Figure 7: Attributable Mineral
Reserves by region
(million Au-Eq oz)
Figure 8: Average exchange rates
and commodity prices
Australasia
South Africa
South America
West Africa
Growth projects
Australasia
South Africa
South America
West Africa
23.70
22.65
7.56
9.15
12.36
4.11
6.01
2011
2010
2009
7.22
1.03
7.32
0.92
8.43
0.87
1,569
1,220
965
364,216 287,150 261,517
1,541
1,323
1,236
R/US$
US$/A$
Gold
(US$/oz)
Gold
(R/kg)
Gold
(A$/oz)
153.99
58.11
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
1. Overview
and strategy
Our Vision is to be the global leader in sustainable gold mining.
Supporting our Vision and directing the strategy are six core Values
that apply to every decision we make and every action we take:
(cid:21)(cid:8) Safety: If we cannot mine safely, we will not mine
(cid:21)(cid:8) Responsibility: We act responsibly and care for the environment,
each other, and our stakeholders – our employees, communities
and shareholders
(cid:21)(cid:8) Honesty: We act with fairness, integrity, honesty and transparency
(cid:21)(cid:8) Respect: We treat each other with trust, respect and dignity
(cid:21)(cid:8) Innovation: We encourage innovation and entrepreneurship
(cid:21)(cid:8) Delivery: We do what we say we will do
Contents
1. Overview and strategy
Vision of the Chair ....................................................... Page 8
Q&A with the Chief Executive Officer ....................... Page 11
Delivering on our objectives for 2011 and 2012 ........ Page 18
Highlights
51%
Production from outside of South Africa
US$973m
Record net earnings
4th
Ranking in the global mining category of the 2011 Dow
Jones Sustainability Index – the leading South African-listed
mining company
50%
Rise in free cash flow to US$752 million
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Overview and strategy
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Furthermore, the growth and
diversification of Gold Fields
production is underpinned by its
world-class mining projects in Peru,
Ghana and the Philippines, amongst
others. I am confident that these
will give rise to Gold Fields next
generation of mines within the next
two to three years. My confidence
in the future of the company as a
global leader in the industry is also
rooted in its worldwide portfolio
of quality greenfields and near-
mine exploration projects – as well
as its global Mineral Resources
and Mineral Reserves position
(p119), which has few equals.
Furthermore, Gold Fields future will
be sustained by the excellence of its
management team and its continued
investment in top talent.
Gold price and
share performance
The past year has seen gold
retain its position as a ‘safe haven’
investment in the face of continued
global political and economic
instability. Despite significant
volatility, gold prices ended the year
approximately 11% higher in US
dollar terms (34% in Rand terms),
whilst underlying fundamentals
appear to indicate gold’s upside
potential is greater than its downside
risk. These fundamentals include
strong investment demand, as well
as continued economic growth in
the emerging markets.
Such growth is being led by China
and India, where rising disposable
incomes have supported some of
their citizens’ natural affinity for gold
jewellery and gold as an investment.
On the supply side, relatively
stagnant global gold production
over the past decade, as well as an
ongoing decline in the discovery
of large deposits, has also helped
underpin the price of gold.
1.1 Vision of the Chair
Dear Shareholders
This year, Gold Fields turns 125
years old. The company shares
its history with that of the modern
South Africa, as Johannesburg is
also celebrating its 125th anniversary
in 2012. Gold Fields has been
an integral part of South Africa's
mining sector, which has been
instrumental in the development of
the country's economy.
Having operated proudly in South
Africa since 1887, our intent is to
remain in South Africa for at least
the next 50 to 60 years, motivated
largely by our investment in the
lucrative South Deep project. South
Deep may well be the ‘last man
standing’ in the country’s gold
mining sector, but our South African
operations continue to present a
unique opportunity for meaningful
wealth creation and distribution – not
just to our shareholders but also to
our other key stakeholders in the
country. This includes government,
local communities and, most
critically, our approximately 41,400
employees and 4,300 contractors.
Building on this firm foundation
makes us even more effective as
a leading global gold company,
as we continue to develop
opportunities further afield
to advance the geographical
diversification of our production.
I am pleased to report that in 2011
Gold Fields marked a significant
milestone in these efforts. As
recently as 2008, 62% of our
production came from South Africa,
but since then we have added
over half a million ounces from
our international regions and last
year, for the first time, the majority
(51%) of our production came from
outside South Africa. As a result,
we are firmly on track to meet
our Goal of having 5 million gold
equivalent ounces in production or
development by 2015 – with plans
for 40% to come from our South
Africa region and 20% from
each of our international regions.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
In this context, Gold Fields share
price performance has been relatively
disappointing. Last year, the share
price rose by only 3% to R124.60
by year-end. In US Dollar terms,
the share price declined by 10% to
US$16.28. At the point of writing, the
share price continues to languish
at these levels. I do not believe this
reflects the underlying value and
growth potential of the company.
Nonetheless, there is some
consolation for shareholders. In
2011, Gold Fields paid a total
dividend of R3.30 (US$0.46) a
share, at a yield of 2.6% – the
highest amongst the leading
global gold companies.
Our financial results for 2011
demonstrate that our management
team can extract strong economic
value from our mines, while also
investing in the future growth of the
company. Highlights include a 50%
rise in our free cash flow to R5.5
billion (US$752 million) and a Group
NCE (Notional Cash Expenditure)
margin of 25% – in line with our
long-term target, which we have
achieved significantly earlier than
anticipated. This demonstrates the
ability of Gold Fields management
team to leverage the higher gold
price to improve earnings and cash
flow. I am confident that this solid
financial performance, the continued
optimisation of Gold Fields existing
operations and the realisation of its
future growth portfolio will deliver
lasting returns to shareholders.
Resource Nationalism
Over recent years, the calls for
greater state intervention in the
resources sector have grown louder
and governments around the world
are responding by raising taxes and
tightening regulations. Over the past
year, Gold Fields has had to deal
with higher taxes – or is facing the
prospect of hardening tax regimes –
in many of the jurisdictions in which
it operates.
9
Overview and strategy
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To a great degree, this dynamic
has been driven by the fairly rapid
escalation of metal and mineral
prices over the past decade. I
believe, however, it is also rooted
in the common misconception that
these prices feed straight through to
the bottom line – to instantaneously
enrich shareholders. What is often
forgotten is the capital intensive,
high-risk nature of the mining
industry. In this context, capital
providers need to be rewarded
with a significant return on their
investment, which is often committed
over decades rather than years.
Similarly, gold prices do not rise
in isolation from other commodity
prices, which make up many of our
input costs, thus partially reducing
the margin that the higher gold price
brings about.
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I firmly believe that the role of
companies is first and foremost to
create economic value with all the
benefits that this can bring. In 2011,
58% of Gold Fields turnover of
US$5.8 billion could be considered
to contribute economically to the
societies in which it operates.
The company last year procured
US$1,730 million in goods and
services, spent over US$1,100
million on salaries and benefits
for its 46,378 employees, paid
governments US$478 million in
taxes and royalties, and spent
US$54 million on Socio-Economic
Development initiatives.
Gold Fields creates significant
economic value not just for
employees, but also for its local
communities and host governments
through royalties, taxes and social
upliftment programmes.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
10
Overview and strategy
This reflects the understanding
that mineral rights are, justifiably,
viewed as part of each country’s
national patrimony. In this context,
Gold Fields not only has a duty to
its investors, but also bears
significant responsibilities in terms
of society more broadly. I believe
that, by and large, it fulfils these
responsibilities successfully.
Leadership in sustainable
gold mining
Gold Fields is already addressing
the challenges of resource
nationalism through its commitment
to sustainable gold mining. This
means achieving durable production
and growth, whilst contributing to
nationally appropriate sustainable
development wherever it operates.
Our ability to bring our large,
long-life Mineral Reserve base to
account depends on a continued
and demonstrable commitment to
sustainable development, which
underpins our social licence to
operate with respect to our host
governments and local communities.
Gold Fields has made important
advances on this journey. This is
illustrated by the fact that in 2011 we
were the top-ranked South African
mining company on the prestigious
Dow Jones Sustainability Index
(p27). This reflects the significant
progress we have made in terms
of environmental management,
our relationships with both
neighbouring and labour-sending
communities, our commitment to
sound and transparent corporate
governance, as well as long-term
economic value-creation where our
assets are invested.
Challenges remain, however. The
most pressing one is the safety of
our workforce and I am dismayed to
report that we had 20 fatalities at our
mines in 2011 – all but one of them
at our South African operations.
This is particularly disappointing as
we had made significant progress
over the past few years in terms of
engineering-out risks, entrenching
rigid health and safety standards,
and nurturing a safe mining culture.
In response to these tragedies,
the management team has
strengthened its commitment to
our most important Value: “If we
cannot mine safely, we will not
mine”. We are determined to move
beyond the stigma of underground
gold mining as an inherently
dangerous activity by improving
safety performance and consistently
reducing the risk of fatalities. We
are complementing existing safety
measures with programmes that
enhance workforce competence
through capacity building, as well
as our proactive health, housing
and welfare initiatives that focus
on employee wellbeing 24 hours
a day. Finally, we have established
a sound relationship with both the
government and the trade unions,
who are the key stakeholders in
our efforts.
A further challenge is the skills
shortage confronting the industry
and its ability to attract, retain and
develop top talent. I am pleased to
report that Gold Fields is making
significant progress in this area
through the launch of a wide-
ranging and ambitious Group
People Strategy, never embarked
upon to such an extent before,
thus reflecting that people are our
business (p128).
This strategy is aligned with the
company’s wider strategic goals
and will augment Gold Fields
existing skills development initiatives
– led in South Africa by the
Gold Fields Academy – through
which thousands of our employees
receive training each year. The
Academy also provides thousands
of workers and community members
with skills ranging from basic literacy
to artisanship. These are skills they
can use after leaving the mining
industry, allowing them to contribute
elsewhere in the economy. We are
also continuing to invest in ongoing
partnerships with tertiary mining
and technical institutions in all our
host countries. In particular, we are
leading the mining sector in terms
of our investment and commitment
to tertiary mining education in
South Africa.
Integrated Reporting
As I have broadly outlined above,
Gold Fields strategy rests on three
pillars: Optimising our operations;
Growing Gold Fields; and Securing
our future. This strategy is
underpinned by a sound corporate
governance framework, commitment
to proficient risk management
and effective engagement with
our stakeholders.
I believe that this Integrated Annual
Review provides a transparent
and systematic account of our
progress in all these areas. This is
in line with the aim of the King III
Code of Corporate Governance, to
which we fully subscribe, to provide
shareholders and other stakeholders
with a full picture of the company
and its impact on society.
Appreciation
I would also like to express my
sincere appreciation to my fellow
directors for the enthusiasm with
which they have supported me, as
well as their energetic and valuable
contributions to Board deliberations.
We owe a special thanks to Chris
von Christierson, who retired from
the Board in May 2011, after serving
with dedication for 12 years.
Finally, I would like to thank our
Chief Executive Officer, Nick
Holland, his management team
and all Gold Fields employees for
their continued and unwavering
commitment to the company and
its Values.
Dr Mamphela Ramphele
Chair
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
1.2 Q&A with the
(cid:22)(cid:23)(cid:3)(cid:7)(cid:24)(cid:8)(cid:25)(cid:26)(cid:7)(cid:17)(cid:5)(cid:20)(cid:3)(cid:27)(cid:7)(cid:8)(cid:28)(cid:24)(cid:14)(cid:8)(cid:17)(cid:7)(cid:6)
Strategy
Q. What does Gold Fields Vision
of ‘leadership in sustainable gold
mining’ mean in practice – and why
do you place such emphasis on
sustainable development?
A. This is very much about
effective risk management and
‘business sustainability’. In
practice, this means developing
and implementing fully integrated
strategies at operational-, regional-
and Group-level to ensure we
are identifying the risks and
opportunities facing our business –
and that we are managing these in
a way that supports our long-term
profitability and ensures the long-
term sustainability of our business.
This includes the commercial,
technical, environmental, economic,
social and political dynamics
facing Gold Fields – and the
interrelationships between them.
This is most apparent in three
key areas:
(cid:2)(cid:3) Our pursuit of ‘Zero Harm’ at our
operations is not only the right
thing to do, it also minimises the
loss of production caused by
safety related stoppages – which
directly impact on profitability
(cid:2)(cid:3) Our efforts to cut energy
consumption and develop
alternative energy sources not
only reduce our costs, but also
ensure we are able to thrive in a
carbon-regulated future
(cid:2)(cid:3) The delivery of shared mutual
benefits to local communities
and host governments is not
purely philanthropic. It also
directly supports our social
licence to operate, our ability to
demonstrate our value to host
governments and our ability to
enter into highly prospective
and more challenging growth
environments – whether in Peru,
the Philippines or elsewhere
11
Overview and strategy
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We are able to ‘operationalise’
this approach by integrating
broad sustainability measures
into the balanced score cards of
key decision-makers within our
organisation. This means that
aswell as pursuing shorter-term
goals around production and cost
performance, decisions are also
being made on the basis of our
longer-term, ‘holistic’ performance.
In 2011, the practical application
of this philosophy can already be
seen in our production practices.
This includes the shift towards
owner-mining, which supports the
longer-term sustainability of the
business. It can also be seen in
our shift from 12-month production
planning to production planning
of 24-months and beyond. This is
with the aim of balancing longer-
term capital investment and mine
development against our shorter-
term pursuit of higher NCE margins.
We need to think this way, because
ours is a long-term business. In
2012, we mark our 125th anniversary
– and we fully intend to be delivering
value both to our shareholders and
to our broader stakeholders well into
the future.
Q. You have set an ambitious target
of 5 million gold equivalent ounces
in production or in development by
2015 – are you on track?
A. We are broadly on-track to
achieving this important Goal –
despite some short-term challenges.
Although production from our
mature operations in South Africa
decreased in 2011, output for the
Group remained broadly stable
and at historical levels. We can
build on this to achieve our
long-term growth objectives.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
12
Overview and strategy
A significant step in this direction
was the buy-out of minority
shareholders in Ghana and Peru
during the second half of 2011
(p118), which also contributed
to our strategic aim of achieving
100% ownership of the assets in
our portfolio. By raising our stake
in Gold Fields La Cima from 80.7%
to 98.5% and in our Tarkwa and
Damang mines from 70% to
90% at a combined cost of
US$1.05 billion, we gained
around 250,000 production ounces
and over 3 million ounces in long-
life, low-cost reserves.
We have also made good
progress in terms of our resource
development and feasibility projects,
which will underpin our ability to
grow and geographically diversify
our production, as well as our
Mineral Resources and Mineral
Reserves. The most advanced
are our Damang Super Pit,
Chucapaca and Far Southeast
projects in Ghana, Peru and the
Philippines respectively.
At Damang we have generated a
10 million ounce resource, most of
which relates to the Super Pit, which
on its own has a 7.4 million ounce
Mineral Resource and 2.5 million
ounce Mineral Reserve. This will
help to underpin the doubling of the
mine’s production.
Figure 1.2: Gold Fields strategy
Plans are in place to carry out a
pre-feasibility study for the project
in 2012, notwithstanding the
potential commercial impacts of the
hardening fiscal regime in Ghana.
At Chucapaca we have increased
the Indicated and Inferred Mineral
Resource by 35% to 7.6 million
ounces and plan to deliver the
first Mineral Reserve in 2012,
following the feasibility study for
the project. We also expect to
make a development decision
before year-end.
In September 2011 we made our
second down-payment of US$66
million at the Far Southeast project
in the Philippines and in March 2012
a third payment of US$110 million,
reflecting positive proof of concept
and due diligence drilling results –
as well as growing confidence in our
ability to develop a new, world-class
mine at the site. We now have a 40%
interest in the project and under
our option agreement with Lepanto
and Liberty Express Assets a final
payment of US$110 million would
raise our interest to 60%.
Figure 1.1: Achieving our Vision
Free
Cash
Flow
Optimise our assets
- Grow cash flow margin per ounce
Grow Gold Fields
- Grow ounces per share
Secure our future
- Sustainability
5 million ounces in production or in development by 2015
Optimise our assets
- 25% NCE margin target for existing assets
- Reserve replacement and growth
- Business Process Re-engineering
Grow Gold Fields
- 5Moz in production or in development by 2015
- Increase geographical diversification
- No M&A Heroics – opportunistic approach
- Organic growth and exploration
- Growth in production per share and NCE margin per ounce
Secure our future
- Sustainable development integrated into the business model
- If we cannot mine safely, we will not mine
- Focus on people
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
The final payment is dependent on
our ability to procure a Financial or
Technical Assistance Agreement
(FTAA), which allows foreigners to
own a majority in a local project.
We plan to deliver a maiden Mineral
Resource model in 2012 and
commence a pre-feasibility study.
We are also extending our extensive
drill programme at the Arctic
Platinum Project in Finland as part
of a pre-feasibility study to improve
its financial profile. Meanwhile, at
Yanfolila in Mali, we are carrying
out additional drilling to advance
to provide sufficient critical mass
to progress the project beyond the
advanced drilling stage.
Should these projects be successful,
they should deliver sufficient
new ounces in production and
development to significantly outweigh
likely production shortfalls at our
South African legacy operations.
Q. What are the big opportunities
for the future?
A. We believe innovation and
technology will provide opportunities
for the exploitation of our very
substantial Mineral Resources
in South Africa. The long-term
sustainability of the South Africa
region has often been questioned,
due to concerns that the deep-level
nature of our underground deposits
will – over time – restrict our ability to
bring these ounces into production
in a safe and profitable way.
We are already demonstrating
the questionable nature of this
assumption at South Deep. Here,
the application of advanced mining
techniques and the implementation
of mechanised underground mining
is helping ensure its substantial
Mineral Resources and Mineral
Reserves (which account for
35% and 45% of the Group total
respectively) will be brought to
account at minimal risk to our
employees – and at a cost that will
help underpin the sustainability of
the South Africa region as a whole.
13
Overview and strategy
Case study
Why does Gold Fields use NCE to measure its
cost performance?
Notional cash expenditure (NCE) is an ‘all-in’ performance measure
developed by Gold Fields. It is aimed at introducing greater
transparency around the all-in costs of producing an ounce of gold.
This is particularly important for both producers and investors in a
context of ever-escalating input costs. NCE includes:
(cid:2)(cid:3) All operating costs
(cid:2)(cid:3) All capital expenditure (e.g. growth and sustaining
capital expenditure)
(cid:2)(cid:3) All near-mine exploration expenditure
Gold Fields believes this provides a more accurate measure than the
commonly used ‘total cash costs’. In part, this is due to NCE’s explicit
inclusion of ‘growth capital’. In doing so, NCE recognises the bulk of
capital invested in new production is largely aimed at replenishing
the industry’s declining output – rather than delivering growth per se.
The objective is to provide the all-in cost. NCE per ounce influences
how much free cash flow is available to pay taxes, interest, greenfields
exploration and dividends.
By using the total cash cost measure, many within the industry are
claiming high operating profit margins that are not, in reality,
supported by underlying cash flow. This may have had an impact on
the number of external stakeholders currently demanding a greater
share of (apparently) higher operating profit margins in a number of
mining jurisdictions (p155-156).
The well-established nature of the
infrastructure at KDC – as well as
its differing geology – means we
cannot apply the same techniques as
applied at South Deep. Nonetheless,
we are in the process of researching
advanced, proprietary technology
that could one day transform the
future of these mines, by allowing
efficient, low-cost mining at extreme
depths and in extreme conditions,
without exposing our employees to
safety or health risks.
Although this research is at a
relatively early stage, we are
hopeful that in the longer-term this
technology – as well as technology
being developed in the open
market – will help breathe new life
into KDC. This would have strategic
implications for the Group in terms
of leveraging the mine’s very large
Mineral Resources (31% of the
Group total) – and help secure the
future of the region.
Operational performance
Q. How would you evaluate
Gold Fields business performance
in 2011?
A. In terms of production, our
performance has been broadly
satisfactory. During 2011, total
attributable production remained
steady at 3.5 million gold equivalent
ounces. This reflected higher
production at our international
regions, which offset lower output at
our mature Beatrix and KDC mines,
as well as stable production levels at
South Deep.
On a more positive note, we marked
a major milestone in our efforts
to advance the geographical
diversification of our production,
49% of which came from South
Africa (2010: 53%) and 51% from
our Australasia, South America and
West Africa regions (2010: 47%).
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
14
Overview and strategy
This means that the majority of our
production ounces now come from
outside of South Africa.
The picture has been more positive in
terms of our financials. NCE margin
– which increased from 16% (or
US$201/oz) to 25% (or US$396/oz)
– is now aligned with our long-term
NCE target. Although this was largely
driven by higher gold prices, it also
reflected the collective impact of our
wide range of cost-saving initiatives,
including R840 million (US$116
million) in South Africa and US$43
million in Ghana saved through
Business Process Re-engineering
during the course of 2011.
This has helped contribute to a 50%
increase in free cash flow from
our operations to R5.5 billion
(US$752 million) last year.
The fact that we are managing to
contain our costs, means we are
realising the higher gold price in our
bottom line. This is illustrated by the
fact that operating profits rose by
46% to R21.1 billion (US$2.9 billion).
We have also achieved a degree
of consolidation in terms of our
operations. This includes, for
example, our shift towards owner
mining and maintenance at our
Damang mine in Ghana and, in part,
at our mines in Australia. This will
help us reap greater rewards from
our mines on an ongoing basis.
Furthermore, our minority buy-out
in Peru has given us almost total
ownership of the highly profitable
Cerro Corona mine – with attendant
benefits in terms of additional
attributable production, Mineral
Resources, Mineral Reserves and
future growth potential.
In Ghana, our purchase of
IAMGOLD’s indirect minority stake
in Damang and Tarkwa (which
has taken our interest to 90%) also
means we are well positioned to
benefit from the significant resource
and reserve position, at Damang in
particular. The buy-out has already
secured us an extra 280,000 reserve
ounces, as West Africa’s Mineral
Reserves increased by 21% to 13.7
million ounces during 2011.
Our promise that "if we cannot mine
safely, we will not mine" is integral
to our safety culture and is acted
upon on a daily basis. Our ‘Stop,
Think, Fix, Verify and Continue’
approach encourages employees
across the Group to halt work
wherever there is a risk to health or
safety and to examine if there are
alternative, safer ways to get gold
out of the ground. If there is no
safe alternative, we will leave the
ounces in the ground rather than
put our teams at risk. Over the last
three years, we have written-off
about 2 million ounces of high-
grade reserves on this basis, though
they still sit within our resource
inventory. Despite the economic
cost of this approach – as well as
our considerable expenditure on
engineering-out risks – we believe
this is not only the right thing to do,
but also the realistic thing to do.
In 2011, we had a total of 75, mostly
shaft-specific, safety stoppages in
South Africa – some of them self-
imposed. This resulted in the loss
of 52,500 ounces of production,
demonstrating the economic
impact of potentially avoidable
safety incidents. Similarly, failure to
demonstrate to our stakeholders –
including our employees, organised
labour and government – how
serious we are about safety, could
have strategic implications in terms
of our legal and social licence
to operate. As a result, we have
proactively engaged with government
and the trade unions, meeting them
in tri-lateral forums on a regular
basis to find common solutions to
safety issues. This approach has
been far more productive than the
more adversarial approach many in
the industry have taken in response
to the government’s ‘no-nonsense’
attitude towards safety in the
mining sector.
As in 2010, 2011 saw a significant
amount of work take place to improve
the sustainability of Gold Fields.
These efforts are starting to bear
fruit – not only in terms of supporting
our sustainability performance
and influencing new project
development – but also in terms
of external recognition.
In particular, we believe that
our 4th position amongst mining
companies in the global Dow Jones
Sustainability Index shows we are
on the right track. This is particularly
the case given that it is the first time
we have participated in the index
– and that our score made us the
strongest South Africa performer in
the mining sector. We intend to build
on this.
Q. You say "if we cannot mine
safely, we will not mine". How
realistic is this?
A. We have made it our objective
to achieve ‘Zero Harm’ and mitigate
the risks associated with deep
underground mining at our
South African operations.
We believe that with the right
leadership, safety culture,
procedures and engineering
controls, deep underground mining
can be carried out in a way that
does not put our employees at risk.
That is not to say the task is not
challenging – or that we have
it right yet. As the 20 fatalities
experienced by Gold Fields in 2011
show, this is a fight that requires
constant diligence – with no room
for complacency. A total of 17 of
these fatalities took place in the first
seven months of 2011 – prompting
us to accelerate a widespread
programme to engineer-out risks,
including installing in-stope bolting
in stope panels, as well as initiatives
around behaviour-change, safety
compliance and leadership. This
had a real effect, with a marked
decline in fatalities in the second
half of the year.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
15
Overview and strategy
Figure 1.3: Economic contributions by Gold Fields
Category (US$ million)
Operating costs (incl. procurement and contractors)
Salaries
Payment to capital providers
Payments to government
Socio-economic development (SED) spend1
2011
1,851
1,101
282
478
54
2010
1,924
1,027
243
312
67
2009
1,479
784
181
249
11
2008
1,395
708
230
159
14
Total economic contribution
3,766
3,573
2,704
2,506
1 See p143 for new SED definition for 2010 and 2011
Q. Gold Fields places a lot of
emphasis on ‘wellness’. What does
this mean in practice?
A. Issues around occupational
health – and health in general – in
the mining industry have rightly
been subject to close scrutiny for
a long time. Occupational health is
particularly important in our South
Africa region due to the deep, labour-
intensive nature of our mines there.
However, we feel that as an industry,
we have focused on a narrow range
of measures that – although very
important in their own right – only
reveal part of the picture in relation to
employee wellbeing and productivity.
This is the rationale behind
our ’24 Hours in the Life of a
Gold Fields Employee’ programme
– which deliberately focuses on
employees’ holistic wellbeing, both
at work and outside it (p140). In part,
this is driven by a natural concern
for the welfare of those who work for
us – often in demanding conditions.
It is also driven by concerns that
individuals’ safety performance can
sometimes be undermined by their
broader lifestyle.
The 24 Hours programme covers
employees’ accommodation,
nutrition, sleep, psycho-emotional
wellbeing and recreation. It
is integrated with our broader
health and safety initiatives, in
recognition of the holistic nature
of employee wellbeing – and the
interrelationships between, for
example, lifestyle, health, safety
and disease.
Our holistic approach does not
mean we are taking our eye off the
ball in terms of more traditional
occupational health management
measures or the prevention and
mitigation of diseases.
In 2011, we progressed our
extensive programme to physically
‘engineer-out’ occupational health
risks and to help us reduce noise
and dust levels in line with South
Africa’s Mine Health and Safety
Council 2013 milestones (p137).
Measures implemented last year
focused on minimising the noise
from our mining equipment to
reduce sound pressure levels
below the strict targets that will
be applied from 2013 onwards. In
terms of reducing dust emissions,
we are implementing the use of
foggers to trap dust particles,
footwall treatments to bind dust
and extensive training among staff
on the latest protection equipment,
amongst other measures.
HIV/AIDS remains a particularly
serious issue in South Africa
– and we continue to apply a
comprehensive response in terms
of education and awareness-raising,
Voluntary Counselling and Testing,
the provision of free Highly Active
Anti-Retroviral Treatment and holistic
support through our 24 Hours
programme. As much as possible,
we address HIV/AIDS through our
mainstream medical services to
avoid stigmatisation – and to ensure
it is managed in the context of a
person’s overall wellbeing, health
and lifestyle.
Q. Gold Fields growth strategy
appears to be taking the company
into new locations that are seen as
‘higher risk’. What is being done to
manage these risks?
A. The success of our new growth
projects – which are by their nature
capital intensive and long-term – is
often highly dependent on our social
and political licence to operate.
Many of the new growth environments
present relatively challenging socio-
economic, environmental and political
contexts. Nonetheless, we go where
the gold is.
In many cases, communities are
wary of the entry of large-scale gold
mining operators, due to a lack of
understanding around likely impacts
or negative experiences from the past.
Similarly, communities can harbour
unrealistic expectations about the role
mining can play in alleviating poverty,
providing employment or delivering
public services.
As a result, we take great care to
minimise any negative impacts,
demonstrate real contributions
to local development, manage
expectations, and maintain frank
and respectful dialogue – at the
earliest stages of exploration.
Failure to do so at the start can have
serious implications for future project
development – and it is very hard to
‘undo’ past mistakes in this context.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
16
Overview and strategy
This is not enough on its own. We
must ensure that it is in the interest
of local communities and host
governments for our operations to
run smoothly, efficiently and without
disruption. As a result, we structure
projects in a way that will benefit
local communities through social
investment, employment creation,
capacity building and
local procurement.
The success of this approach can
be seen at our Cerro Corona mine
in Peru, where we have helped
build significant social, economic
and environmental ‘capital’
since we acquired it in 2003 and
commissioned it in 2008.
This is part of an integrated,
long-term development approach,
which includes, for example, the
enhancement of local dairy herds,
active support for local enterprises
and extensive re-forestation (p145).
The results have been impressive –
contributing to a thriving community
in an area previously characterised
by severe under-development and
social unrest, which is still affecting
other mining firms operating in Peru.
Many of the lessons learnt at Cerro
Corona are being applied at the Far
Southeast project in the Philippines.
The Far Southeast Community
Sustainable Development team is
also using an active engagement
approach – as well as innovative
and comprehensive stakeholder
identification, interaction and
monitoring – to secure a firm social
licence. This includes the Free,
Prior and Informed Consent of
local indigenous people in the
affected area (p106-107).
External environment
Q. To what extent is
Gold Fields being affected by
resource nationalism?
A. We face resource nationalism
to a varying degree at all our
operating locations. This seems
to be largely due to the significant
income gaps that exist in many
resource-rich countries as well as
high commodity prices – and the
(often misguided) belief that these
are generating ‘excessive’ profits for
mining companies.
In Ghana, where we are the largest
single tax contributor, we have faced
a rise in royalty rates from 3% to 5%
as well as the continuation of the
National Stabilisation Levy for 2011.
In addition, Ghana’s new tax regime
will see the mining sector subject to
a 10% increase in Corporate Income
Tax, a 10% Windfall Profit Tax and a
significant hardening of the capital
allowance regime.
We remain concerned about
the impact of these taxes on the
commercial viability of our proposed
Damang Super Pit project – which
would otherwise secure the future of
a mine previously marked for closure,
as well as create jobs and boost our
public revenue contributions.
In Peru, the new government
has raised royalties to between
1% and 12% of operating profits
(previously 1% to 3% of sales)
and imposed a special mining levy
of between 2% and 8.4% on net
profits. Although this is relatively
modest compared to some previous
projections – and will help pay for
poverty reduction and infrastructure
development – we would be wary of
any further increases.
The South African government has
essentially taken nationalisation off
the table, but is looking at other
tax-based measures to extract more
funds from the sector. Any further
government imposts – for example
in the form of a resource rent tax –
would do much to undermine the
South African mining industry and its
ability to generate employment.
Furthermore, there is also no
guarantee that higher taxes in
nominal terms will lead to a greater
income from the mining industry for
the state as they tend to act as a
deterrent to investment, particularly
from the foreign investor community.
The ability of any mining company
to make sustained contributions
to its local communities and host
countries is almost completely
dependent on its ongoing
profitability. In the absence of further
increases in commodity prices,
higher taxes and more stringent
regulations will limit the ability of the
sector to make such contributions.
But we also believe that if we
– and the mining sector more
broadly – could better measure
and communicate the very real
economic benefits we deliver
to our host societies and
governments, then this fact
would be better recognised.
Q. Energy prices, carbon
management and climate change
are increasingly cited as key
business priorities for the mining
sector. How is Gold Fields
addressing these issues?
A. Higher energy costs are already
having a direct impact on our
operations – so this is far from
an abstract issue for us. It is a
particularly pressing issue in South
Africa, due to challenges around
national power infrastructure and
sharp increases in national electricity
costs. This is one of the reasons
why I set a clear target to continue
reducing our electricity consumption
in South Africa. From our 2007
baseline to the end of 2011 we have
already achieved a 17% reduction.
The emphasis on reducing our
electricity consumption will remain,
despite the welcome decision by
South Africa’s energy regulator to
reduce average tariff increases from
26% to 16%. We hope this welcome
reduction in tariff increases will set
the tone for future price changes.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Q. What are the key dynamics
behind the gold price – and
what predictions do you have for
the future?
A. Between 2001 and the end of
2011, the price of gold rose by
about 650%. It is understandable
why many are predicting a period
of consolidation. We believe
changes in demand are the biggest
determinant of the gold price in
the short- to medium-term – more
so than supply. In 2011, demand
continued to be driven by China and
India – both in terms of gold as an
investment and gold jewellery. Last
year, these two countries accounted
for 42% of demand for gold –
compared to 39% in 2010 and 29%
in 2009. We believe this trend is
likely to continue in the medium-
to long-term.
Furthermore, in 2011 we saw central
banks accelerate their purchases of
gold, buying 440 tonnes – around
five times more than in 2010.
There is clearly appetite amongst
the central banks to hold and
accumulate gold. Currently, the vast
majority of gold reserves are held
in the developed world – meaning
there is also significant scope
for central banks in developing
economies to expand their gold
reserves as they grow.
Exchange-Traded Funds (ETFs) are
another major source of demand.
Having started from nothing in 2004,
ETFs are now worth around US$120
billion, accounting for around 10%
of total investment demand for gold
in 2011. This still represents only
around 1% of global funds under
management – again meaning there
is great scope for further expansion
in the longer-term.
Improved energy efficiency not
only reduces our costs – it also
reduces our carbon emissions.
This is clearly positive from an
environmental point of view, but also
has the potential to deliver material
benefits to Gold Fields in the future.
In 2011, the Australian government
introduced carbon taxes and
the South African government
announced in the 2012 Budget that
it will do so beginning in 2013 (p68).
We are not in favour of carbon
taxes as they are a headline cost
that is likely to increase our cut-
off grade and sterilise our Mineral
Reserves. In addition we are already
spending considerable sums on
reducing our carbon footprint. We
are doubtful that carbon taxes will
result in the environmental benefits
that governments are seeking, as
we question whether revenue from
carbon taxes will be ring-fenced to
fund nationwide carbon adaptation
and mitigation strategies.
Reflecting the close link between
energy consumption and carbon
emissions, we are in the process
of implementing a fully integrated,
Group-level Energy and Carbon
Strategy and management plan. We
are also embedding our new Carbon
Management Policy, under which
each of our regions has been tasked
with developing tailored strategies
and management plans to address
carbon management and reporting,
the mitigation of carbon pricing risks
and adaptation to potential climate
change-related risks (p67).
Furthermore, we have integrated
carbon pricing into financial
planning at our mines and within
our growth pipeline to ensure all
our business decisions contribute
to future sustainability. This will be
embedded for the first time into our
2013 budget process. In addition,
we are pursuing a range of specific
projects to generate Certified
Emission Reductions (CERs) that will
either generate additional cash or
be used to help off-set some of our
own carbon emissions (p68).
17
Overview and strategy
Given the four- to five-fold increase
in the price of gold over the last
decade, it might be expected that
supply would be booming. But, over
the past 10 years, the compound
annual growth in gold production
has been 1% per year – despite a
4% increase in production in 2011.
This is because the size of gold
discoveries has fallen significantly.
Analysis of the last 30 years shows
that discoveries of 10 million ounce
deposits – which once made up
the majority of new finds – are
becoming increasingly rare.
Over the same period, grade levels
have also declined significantly. Gold
is not only getting harder to find, it is
also getting more expensive to find.
Again, over the last 30 years, the
cost of discovering an ounce
of gold has risen from around
US$10 to an estimated US$75. Gold
Fields cost of Reserve discovery
through exploration has averaged
around US$33/oz over the past
10 years.
In addition, the gold mining industry
is facing rising costs, led by
higher energy prices, sharp wage
increases for scarce skills and
ever-rising prices for input materials.
Despite outwards appearances, the
sector is not making as much money
as the gold price would suggest.
This means there is a fundamental
dynamic – rising global demand
and moribund global supply – that
could help underpin future gold
prices. Furthermore, gold has
regained its status as an asset
class, the world monetary base is
likely to continue to significantly
increase (with commensurate
effects in terms of future inflation)
and uncertainty around a range of
major global economies shows little
sign of abating. In this context, we
believe the fundamentals for gold
remain positive.
Nick Holland
Chief Executive Officer
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
18
Overview and strategy
1.3 Delivering on our objectives for 2011 and 2012
Figure 1.4: Progress on 2011 objectives
2011 objectives
2011 performance
Progress
1
2
3
Achieve safe and stable
production at the KDC
and Beatrix mines
Production at KDC decreased by 9% from 1.2 million ounces to 1.1 million
ounces. There were 13 fatalities at KDC (2010: 11), whilst the Lost Time Injury
Frequency Rate increased to 7.95 (2010: 6.31) (p82). Both production and safety
levels improved in the second half of the year.
Continue the build-up at
South Deep to achieve a
safe production run rate
of 750,000 ounces of
gold by the end of 2014
Continue business
re-engineering across
the Group to achieve a
sustainable free cash
flow and an NCE margin
of 20% at each mine
in the short-term and
25% in the medium- to
long-term at sustainable
gold prices
Production at Beatrix decreased by 8% from 377,000 ounces to 347,000 ounces.
There were five fatalities at Beatrix (2010: five), whilst the LTIFR fell to 2.95
(2010: 3.31) (p84).
There was one fatality at South Deep. The operation achieved two million fatality
free shifts by January 2012. Production at South Deep remained steady at
273,000 ounces (2010: 274,000 ounces) (p86-87).
Challenges around the slow build-up of de-stress cut mining activities
largely related to poor fleet availability and logistics. These are being urgently
addressed. We have adjusted our production goal for South Deep to a 700,000
ounce annual run-rate by the end of 2015.
Cost controls were successfully implemented across the Group, particularly
in South Africa where cost increases in 2011 were limited to 3% despite high
electricity tariff hikes. This contributed to an NCE margin of 25% for the Group.
Each mine achieved the following NCE margin:
(cid:2) Agnew: 32% (p76-77)
(cid:2) St Ives: 19% (p74-75)
(cid:2) Beatrix: 25% (p84-85)
(cid:2) KDC: 23% (p82-83)
(cid:2) Cerro Corona: 60% (p90-91)
(cid:2) Damang: 33% (p96-97)
(cid:2) Tarkwa: 42% (p94-95)
4 Maintain and increase
our production profile
through major
near-mine projects
In 2011, we spent around US$75 million (2010: US$57 million) on near-mine
exploration. This resulted in the significant advancement of near-mine exploration
at Agnew, St Ives and Damang. It also contributed to a higher Mineral Reserve
position at Damang and Tarkwa, as well as a stable Mineral Reserve inventory
(post-depletion) at our two Australian mines.
5
Increase our production
profile through major
resource development
and feasibility projects
6
Increase our production
profile through
greenfields exploration
In 2011, we achieved the following milestones:
(cid:2) Arctic Platinum Project, Finland: Successful bulk-testing of Platsol ® technology
on our deposits – and scope for additional resource positions (p112-113)
(cid:2) Chucapaca, Peru: A 35% increase in Mineral Resources to 7.6 million
gold equivalent ounces – with a potential development decision in
late 2012 (p113-114)
(cid:2) Damang Super Pit, Ghana: Completion of the second phase of resource
definition drilling, leading to an increase in the Mineral Reserves for the
Super Pit from 1.1 million ounces to 2.5 million ounces (p114-115), as well as
a 7.4 million ounce Mineral Resource position
(cid:2) Far Southeast, Philippines: A third down-payment of US$110 million on our 60%
option – informed by extensive proof-of-concept and due diligence drilling and
the identification of extensions at depth. Since year-end we have made a further
US$110 million payment and vested 40% in the project (p116-118)
In 2011, we spent a total of US$115 million (2010: US$90 million) on greenfields
exploration, which led to further progress being made at the following targets:
(cid:2) Argentina (Taguas, p109)
(cid:2) Australia (East Lachlan and Delamarian, p110)
(cid:2) Canada (Woodjam, p110)
(cid:2) Chile (Salares Norte, p111)
(cid:2) Ghana (Asheba, p111)
(cid:2) Guinea (Telikan, p111)
(cid:2) Kyrgyzstan (Talas, p112)
(cid:2) Mali (Yanfolila, p111)
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
19
Overview and strategy
Figure 1.4: Progress on 2011 objectives
2011 objectives
2011 performance
Progress
7
Implement a ‘sustainable
gold’ programme
that addresses both
the concerns of
stakeholders, as well as
emerging business and
sustainable development
risks in our future
growth environments
Highlights in 2011 include the following:
(cid:2) Development of an integrated Carbon and Energy Strategy and
management plan (p66-67)
(cid:2) Integration of carbon pricing into our financial planning (p67-68)
(cid:2) Generation of Certified Emissions Reductions (CERs) through our Beatrix
Methane Project (p68)
(cid:2) Introduction of our enhanced Code of Ethics (p25)
(cid:2) Introduction of our online Sustainable Sourcing Dashboard to assist with risk-
based supplier-screening (p156)
(cid:2) Development of integrated, risk-based Sustainable Development strategies
and actions across the Group (p24, online)
(cid:2) Publication of our first Integrated Annual Report
(cid:2) A fourth place ranking in the global mining category of the 2011 Dow Jones
Sustainability Index (DJSI), making us the leading South African-listed mining
company on the DJSI
Other achievements are listed on p27.
Figure 1.5: Objectives for 2012
2012 objective
2012 planning
1
2
3
Achieve tangible
improvements with
respect to all safety and
health metrics
We plan to continue working in South Africa towards Zero Harm through:
(cid:2) Engineering-out risk
(cid:2) Compliance with safe operating standards and procedures
(cid:2) Cultural/behavioural change
(cid:2) Improved stakeholder engagement
Reduce the rate of
production decline at
KDC to between 3% and
5% against 2011
Regain momentum
in the ramping up
of production at
South Deep
(cid:2) Our 24 Hour in the Life of a Gold Fields Employee wellness initiative
(cid:2) Working towards the 2013 Mining Industry Occupational Safety and Health (MOSH) targets
At our international operations the focus will be on reduced Lost Time Injury Frequency Rates, as
well as improvements in occupational health performance – including dust emissions and Noise
Induced Hearing Loss.
We intend to increase surface processing capacity at KDC for waste rock and tailings. In
addition, we will maintain our focus on efficiency projects, including:
(cid:2) Improved quality mining volumes through our Full Shaft Potential programme
(cid:2) Increased mechanised flat-end development
(cid:2) Improved safety performance (see above)
In 2012, we plan to complete construction of:
(cid:2) The Vent Shaft
(cid:2) The plant expansion
(cid:2) The plant tailings backfill infrastructure
This will help us to achieve our medium- to longer-term production objectives at South Deep. In
the short-term the focus is on:
(cid:2) Improving fleet availability and logistics
(cid:2) Increasing de-stress mining to open up new ore bodies and work spaces
(cid:2) Increasing the number of de-stress projects from six to 12 across all four mining corridors
In addition, we are in the process of establishing a dedicated, on-site mechanised mining
training centre to support operations at South Deep.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
20
Overview and strategy
Figure 1.5: Objectives for 2012
2012 objective
2012 planning
4
Ensure every mine
achieves an NCE margin
of at least 20%
Business Process Re-engineering (BPR) will continue across all operations. The second phase
of the programme in South Africa has identified further cost reductions of R500 million
(US$63 million) over the next two years through:
5
Increase momentum
on growth projects
to achieve our Goal
of 5 million ounces
in production or
development by 2015
(cid:2) Optimisation of staff structures
(cid:2) Reductions in non-specialised contractors
(cid:2) Lower electricity consumption
(cid:2) Enhanced supply chain management
We also plan to maximise the benefits of BPR at our Australian, Peruvian and Ghanaian mines through:
(cid:2) Reductions in energy intensity
(cid:2) Embedding the benefits of owner mining
(cid:2) Improved utilisation and availability of our mining equipment
Plans include the following:
(cid:2) Chucapaca, Peru: Completion of a feasibility study and making a development decision
(cid:2) Damang Super Pit, Ghana: Completion of a pre-feasibility study and updating of the Mineral
Resource and Mineral Reserve position
(cid:2) Far Southeast, Philippines:
(cid:2) Completion of the Financial or Technical Assistance Agreement (FTAA) licencing process
(cid:2) Exercise of our 60% option
(cid:2) Completion of a maiden Mineral Resource position
(cid:2) Commencement of a pre-feasibility study
(cid:2) Arctic Platinum Project, Finland: Completion of the drilling programme at Suhanko North and
finalisation of the pre-feasibility study
(cid:2) Yanfolila, Mali: Completion of our drilling programme, updating of the Mineral Resource
position and compilation of a scoping study at Kangare
6
Ensure Gold Fields has
the financial capacity to
fund growth projects in
2012 and beyond
Plans include the following:
(cid:2) Continued focus on strong operational cash flow generation
(cid:2) The securing of additional long-term funding
(cid:2) Changing of the maturity profile of our long-term debt
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
21
Overview and strategy
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Figure 1.5: Objectives for 2012
2012 objective
2012 planning
7
8
9
Ensure sustainability
is fully integrated
into the business
and is appropriately
communicated
We plan to achieve this through:
(cid:2) Ongoing development, implementation and monitoring of Sustainability Development
strategies at Group-, region- and project-levels
(cid:2) Incorporation of Sustainable Development measures into the balanced score cards of key
decision-makers across the Group
(cid:2) Voluntary adoption of the World Gold Council Conflict-Free Gold Standards
(cid:2) Additional integrated internal and external reporting
(cid:2) A dedicated Sustainable Development communications programme
Ensure climate change
initiatives, carbon
mitigation and adaptation
strategies, and energy
efficiency initiatives are
fully incorporated into
the business
The best proxy for carbon emission reduction is a concomitant reduction in energy usage, which
will be the focus of our efforts in 2012 and beyond. Specific plans include:
(cid:2) Development of a fully integrated, Group-level Carbon and Energy strategy, including the
creation of a Carbon and Energy division
(cid:2) Development, implementation and monitoring of Carbon Management Plans by each region,
including the integration of carbon pricing into our financial and operational planning as well
as decision makers’ balanced score cards
Increase focus on the
attraction, retention and
development of people
and skills
(cid:2) Reduced electricity consumption, particularly at our South African operations, as
this accounts for 96% of energy use and is largely responsible for our Scope 2
carbon emissions
(cid:2) Rolling out of carbon emission reduction projects
Full implementation of our new People Strategy, including specific focus on:
(cid:2) Enhanced branding
(cid:2) Increased talent development
(cid:2) Establishment of an integrated Human Resources Data Management System
(cid:2) Adoption of more competitive remuneration strategies
(cid:2) Enhanced internal and external skills pipelines
(cid:2) Mobility strategy to improve career path development
(cid:2) Encouragement of more flexible working arrangements and improved work-life balance
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
22
Transparency and accountability
2. Transparency and
accountability
(cid:28)(cid:5)(cid:6)(cid:8)(cid:29)(cid:3)(cid:19)(cid:3)(cid:12)(cid:15)(cid:8)(cid:12)(cid:24)(cid:8)(cid:4)(cid:18)(cid:12)(cid:30)(cid:16)(cid:18)(cid:8)(cid:18)(cid:7)(cid:16)(cid:31)(cid:7)(cid:6)(cid:19)(cid:23)(cid:3)(cid:13)(cid:8)(cid:3)(cid:15)(cid:8)(cid:19)(cid:5)(cid:19)(cid:20)(cid:16)(cid:3)(cid:15)(cid:16)(cid:30)(cid:18)(cid:7)(cid:8)(cid:4)(cid:12)(cid:18)(cid:31)(cid:8)!(cid:3)(cid:15)(cid:3)(cid:15)(cid:4)(cid:8)(cid:3)(cid:19)(cid:8)(cid:6)(cid:7)"(cid:7)(cid:17)(cid:20)(cid:7)(cid:31)(cid:8)
in our management approach. This explicitly recognises the ‘integrated’
(cid:15)(cid:16)(cid:20)(cid:5)(cid:6)(cid:7)(cid:8)(cid:12)(cid:24)(cid:8)(cid:20)(cid:23)(cid:7)(cid:8)(cid:12)(cid:13)(cid:7)(cid:6)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)(cid:16)(cid:18)#(cid:8)(cid:19)(cid:5)(cid:19)(cid:20)(cid:16)(cid:3)(cid:15)(cid:16)(cid:30)(cid:3)(cid:18)(cid:3)(cid:20)’(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:14)(cid:15)(cid:16)(cid:15)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)(cid:31)’(cid:15)(cid:16)!(cid:3)(cid:17)(cid:19)(cid:8)(cid:12)(cid:24)(cid:8)(cid:12)(cid:5)(cid:6)(cid:8)
business. Our approach also recognises that the effective and ‘holistic’
management of these often inter-related dynamics is essential for our
(cid:18)(cid:12)(cid:15)(cid:4)*(cid:20)(cid:7)(cid:6)!(cid:8)(cid:13)(cid:6)(cid:12)(cid:14)(cid:20)(cid:16)(cid:30)(cid:3)(cid:18)(cid:3)(cid:20)’+(cid:8)
Sustainability is essential given the long-term, capital intensive nature of
our mining projects – and the contexts in which we need to operate. It
(cid:15)(cid:12)(cid:20)(cid:8)(cid:12)(cid:15)(cid:18)’(cid:8)(cid:6)(cid:7)/(cid:5)(cid:3)(cid:6)(cid:7)(cid:19)(cid:8)(cid:5)(cid:19)(cid:8)(cid:20)(cid:12)(cid:8)(cid:7)(cid:15)(cid:19)(cid:5)(cid:6)(cid:7)(cid:8)(cid:12)(cid:5)(cid:6)(cid:8)(cid:30)(cid:5)(cid:19)(cid:3)(cid:15)(cid:7)(cid:19)(cid:19)(cid:8)(cid:3)(cid:19)(cid:8)(cid:13)(cid:6)(cid:12)(cid:14)(cid:20)(cid:16)(cid:30)(cid:18)(cid:7)#(cid:8)(cid:30)(cid:5)(cid:20)(cid:8)(cid:16)(cid:18)(cid:19)(cid:12)(cid:8)(cid:20)(cid:23)(cid:16)(cid:20)(cid:8)<(cid:7)(cid:8)
(cid:31)(cid:7)(cid:18)(cid:3)(cid:27)(cid:7)(cid:6)(cid:8)(cid:17)(cid:18)(cid:7)(cid:16)(cid:6)(cid:8)(cid:7)(cid:17)(cid:12)(cid:15)(cid:12)!(cid:3)(cid:17)#(cid:8)(cid:19)(cid:12)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:7)(cid:15)(cid:27)(cid:3)(cid:6)(cid:12)(cid:15)!(cid:7)(cid:15)(cid:20)(cid:16)(cid:18)(cid:8)(cid:30)(cid:7)(cid:15)(cid:7)(cid:14)(cid:20)(cid:19)(cid:8)<(cid:23)(cid:7)(cid:6)(cid:7)(cid:27)(cid:7)(cid:6)(cid:8)
we operate.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
23
Contents
2. Transparency and accountability
Corporate governance .............................................. Page 24
Risk management ..................................................... Page 36
Investors and stakeholder engagement .................... Page 40
Highlights
Updated Code of Ethics
Joint 1st place
Ernst & Young Excellence in Corporate Reporting 2011
awards (for JSE listed companies)
Launch of Social and
Ethics Committee
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
24
Transparency and accountability
2.1 Corporate governance
Our management approach is
underpinned by our commitment
to sound and robust corporate
governance standards, which
is essential to operational and
strategic success.
2.1.1 Key internal
standards and principles
Everything that we do to achieve
our Vision of becoming the global
leader in sustainable gold mining
is informed by our Values. These
are applied by our directors, as
well as employees at every level
of the company.
The Board of Directors takes
ultimate responsibility for
the company’s adherence to
sound corporate governance
standards and ensures that all
business judgements are made
with reasonable care, skill and
diligence. The Board of Directors’
Charter articulates the objectives
and responsibilities of the Board
(p29). Likewise, each of the Board
committees operates in accordance
with written terms of reference,
which are regularly reviewed by
the Board. These are available on
our website or, on request, from our
secretarial office.
Gold Fields is placing particular
emphasis on the ongoing
development of its sustainable
development systems and structures.
This includes the establishment of
a unified Sustainable Development
Framework based on best
practice, as well as our operational
requirements. This framework will
assist us in our ongoing efforts to
secure a long-term competitive
advantage by mitigating our risks
before they materialise, and by
capitalising on opportunities before
they pass.
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The framework, which is governed
by an overall Sustainable
Development Policy, is made up
of the following pillars – each of
which is underpinned by a formal
corporate policy:
(cid:2)(cid:3) Carbon and
energy management
(cid:2)(cid:3) Communities and
indigenous people
(cid:2)(cid:3) Environment
(cid:2)(cid:3) Ethics and
corporate governance
(cid:2)(cid:3) Human rights
The Gold Fields Code of Ethics
is informed by our Values and
commits the company, its
directors and employees to
conducting business in an ethical
and fair manner, and promoting
a socially and environmentally
responsible culture.
In 2011, we rolled out an updated
Gold Fields Code of Ethics as
part of our efforts to maintain
consistency with relevant
regulations, including:
(cid:2)(cid:3) National legislation in all of our
countries of operation
(cid:2)(cid:3) Material stewardship and supply
(cid:2)(cid:3) The US Sarbanes-Oxley Act
chain management
(cid:2)(cid:3) Occupational health and safety
(cid:2)(cid:3) Risk management
(cid:2)(cid:3) The US Dodd Frank Act1
(cid:2)(cid:3) The US Foreign Corrupt
Practices Act
(cid:2)(cid:3) Stakeholder engagement
(cid:2)(cid:3) South Africa’s Consumer
Effective management in each
of these areas is integral to the
achievement of our strategic
objectives by helping us optimise
our operations, grow Gold Fields,
and secure our future.
Case study
Using a Group-level
methodology to produce
regional Sustainable
Development Action Plans
Find out more online
Protection Act
(cid:2)(cid:3) The OECD Convention on
Combating Bribery of Foreign
Public Officials in International
Business Transactions
(cid:2)(cid:3) The UN Convention
on Corruption
(cid:2)(cid:3) Relevant human
rights legislation
The Board’s Audit Committee is
tasked with ensuring the consistent
application of, and adherence to, the
new Code of Ethics, which has been
translated into seven languages.
More information on the Code of
Ethics can be found on p25.
www.goldfields.co.za
1 With implementing rules still being finalised
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Case study
A revised Code of Ethics for the Group
In 2011, the Gold Fields legal team revised the Group Code of
Ethics (2007). This was carried out to ensure Gold Fields alignment
with the recommendations of the King III Report on Corporate
Governance – as well as evolving international best practice.
This includes, for example:
(cid:2)(cid:3) US legislation, such as the Sarbanes-Oxley Act (2002), the
Dodd-Frank Act (2010) and the Foreign Corrupt Practices Act
(FCPA, 1977) – as well as UK legislation, such as the Bribery
Act (2010)
(cid:2)(cid:3) The OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions (1997)
(cid:2)(cid:3) The UN Convention against Corruption (2003)
(cid:2)(cid:3) South Africa’s Prevention and Combating of Corrupt Activities
Act (2004)
Furthermore, it was to ensure continued compliance with all relevant
national and international legal requirements applicable to Gold Fields.
Under the latest version of the Code, facilitation payments are
prohibited, regardless of whether it is legal or deemed to be
‘accepted practice’ in a particular country or not. Facilitation payments
involve the payment of small sums to officials to expedite routine
services to which Gold Fields would otherwise be legally entitled. This
approach goes beyond FCPA guidelines, which permit facilitation
payments of up to US$250.
The updated Code also prohibits contributions to political parties,
either in cash or in kind, unless specifically approved by the
Gold Fields Board of Directors. This is the first time that the
prohibition of facilitation payments and political contributions has
been written into Gold Fields policy, and represents a further step in
promoting a zero tolerance approach to corruption and bribery.
In addition, other important areas covered in the updated Code include:
(cid:2)(cid:3) Conflicts of interest
(cid:2)(cid:3) Confidential information
(cid:2)(cid:3) Gifts and business courtesies
(cid:2)(cid:3) Entertainment and hospitality
(cid:2)(cid:3) Share dealings
The roll-out of the updated Code to employees commenced in 2011
and will be completed this year. New employees will sign the Code and
receive related training during induction. Existing employees received
the updated Code during the roll-out programme and will receive
refresher training as required. Every employee has received a copy of
the Code, which has been translated into seven languages. It is also
available on the Group’s Intranet and website.
Transparency and accountability
25
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
26
Transparency and accountability
2.1.2 Key external
standards and principles
Our Sustainable Development
Framework is guided by the
International Council on Mining
and Metals (ICMM). This includes
adherence to its 10 Principles on
sustainable development, as well
as the commitment of member
companies to transparent public
reporting, comprehensive risk
management, sound corporate
governance and independent,
external assurance. Gold Fields
also supports the principles
and processes of the Extractive
Industries Transparency Initiative
(EITI) through its membership
of the ICMM. We are committed
to engaging constructively in
countries that are committed to
implementing the EITI. The ICMM
also has observer status with the
Voluntary Principles on Security and
Human Rights.
Gold Fields supports the efforts
of the World Gold Council, of
which we are a member. We are
also guided by the United Nations
Global Compact, in which we
are a participant. This includes
implementation of the Ten Principles
across our business activities, as
well as our annual submission of a
Communication on Progress
(in the form of this Integrated
Annual Review).
Our reporting is guided by the
Global Reporting Initiative (GRI)
G3.1 Sustainability Reporting
Guidelines as well as its
associated Mining and Metals
Sector Supplement and Reporting
Guidance on HIV/AIDS. The GRI
is an independent, internationally
recognised sustainability reporting
body. All of our operations – as
well as our exploration division
– are certified to the ISO 14001
environmental management system
standard. All of our mines are
certified to the OHSAS 18001 safety
management system standard.
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In addition, all of our eligible
operations are fully compliant with
the requirements of the International
Cyanide Management Code.
We were the first mining group
registered as a signatory to the
Code to obtain accreditation for
all eligible operations.
Our primary listing on the JSE1
Limited (JSE) means we are subject
to the JSE Listings Requirements.
The JSE has included certain
aspects of South Africa’s King III
Report on Corporate Governance
(King III) in its Listing Requirements.
The Board has adopted the
recommendations on good
corporate governance contained
in the King III Report, as well as
the King Code of Governance
Principles for South Africa. This
includes Principle 9.2, which states
that “Sustainability reporting and
disclosure should be integrated with
the company’s financial reporting”.
The 2010 Integrated Annual Report
was the first annual report by
Gold Fields to fully comply with
this principle and we have again
endeavoured to achieve this in the
current annual report. Gold Fields
is also a participant in the global
pilot programme of the International
Integrated Reporting Committee.
We have implemented the King III
principles and recommendations
across Gold Fields, with the
exceptions noted in Figure 2.1.
1 Johannesburg Stock Exchange
The trading of our shares on the
New York Stock Exchange (NYSE)
and registration with the United
States Securities and Exchange
Commission (SEC) means we are
subject to relevant NYSE disclosure
and corporate governance
requirements, as well as the terms
of the Sarbanes-Oxley Act 2002.
Our secondary listing on NASDAQ
Dubai Limited, Euronext in Brussels
and the SWX Swiss Exchange
means we are subject to each
exchange’s disclosure requirements.
On 1 May 2011, South Africa’s
Companies Act 71 of 2008 (as
amended) came into force –
replacing the Companies Act 61 of
1973. Although already compliant
with most of the terms of the Act
prior to it coming into force, during
2011 we took additional actions to
ensure full conformance, including
the establishment of the Social &
Ethics Committee (p35).
Furthermore, at our Annual General
Meeting in May 2012, we will ask
our shareholders to approve our
Memorandum of Incorporation
(MOI), which will replace the Articles
of Association as required by the
amended Companies Act. A draft of
the salient principles of the MOI can
be found in the Notice of the Annual
General Meeting, which is attached.
www.icmm.com
www.gold.org
www.unglobalcompact.org
www.cyanidecode.org
www.sec.gov
www.jse.co.za
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
27
Figure 2.1: Exceptions to the application of King III within Gold Fields
Item No.
King III Principle
1.
2.
“Employment contracts
should not compensate
executives for severance
because of change of
control; however this
does not preclude
payments for retaining
key executives during a
period of uncertainty.”
“…the Chairman and
other non-executive
directors should not
receive share options or
other incentive awards
geared to share price or
corporate performance…”
King III
reference
2.25.165
Gold Fields approach
Reason(s) for applying a
different approach
The employment contracts
of some senior executives,
including the CEO and the CFO,
have a provision for payments as
a result of change of control.
The contracts between Gold Fields and
these senior executive employees were
entered into before the guiding principle
became effective. The Board, guided by
the Remuneration and the Nominating
and Governance Committees, agreed to
maintain the provision in the contracts
on the basis that the rules cannot be
applied retrospectively.
2.25.154
The non-executive directors were
awarded restricted shares with
a three year vesting period. The
last allocation was approved by
shareholders at the AGM held on
4 November 2009 and will vest
on 4 November 2012.
Following an appeal by the company to
the JSE that the company had already
awarded restricted shares to non-
executive directors, the JSE ruled that
the requirement will only be effective
from 1 April 2011 and shall not be
applied retrospectively.
2.1.3 Awards and
external recognition
During 2011, Gold Fields won the
following awards and recognition,
amongst others:
(cid:2)(cid:3) An upgrading of Moody’s Baa3
rating outlook for Gold Fields from
stable to positive
(cid:2)(cid:3) First place in the open pit mining
category of the 14th National
Mining Safety Contest of Peru,
a competition organised by the
Mining Safety Institute of Peru
(cid:2)(cid:3) Registration of the Beatrix
Methane Project as a Clean
Development Mechanism (CDM)
project by the United Nations
Framework Convention on
Climate Change (UNFCCC)
(cid:2)(cid:3) Fourth place amongst global
mining companies in the 2011
Dow Jones Sustainability Index
(DJSI), making Gold Fields the
highest ranking South African-
listed mining company in the DJSI
(cid:2)(cid:3) Ranked first in the JSE Top
100 Carbon Disclosure
Leadership Index (CDLI) by
the global Carbon Disclosure
Project (CDP). In the CDP’s
Carbon Performance Ratings,
Gold Fields was one of only two
JSE companies to be placed
in the top band for their climate
mitigation and adaptation actions
(cid:2)(cid:3) Placed first among the top 300
2.1.4 Board of Directors
companies operating in the BRICS
(Brazil, Russia, India, China,
South Africa) countries in the
Environmental Tracking Carbon
Rankings by the Environmental
Investment Organisation.
Gold Fields was ranked third in the
Global Top 800 companies table
(cid:2)(cid:3) Rated by the JSE as one of its
best performers in the 'high
environmental impact' category
of its Socially Responsible
Investment index. This makes
the company one of only six
consistent best performers for
five years running
(cid:2)(cid:3) Receipt of the 2011 Global
Business Coalition Health Award
in the category of Workplace and
Community Engagement for our
wellness programme in Ghana
(cid:2)(cid:3) First place in the Mining and
Industrial category at the
Southern African Institute of
Steel Construction (SAISC) Steel
Awards 2011 for the new steel
headgear at South Deep
(cid:2)(cid:3) Global Reporting Initiative
A+ compliance for our 2011
Integrated Annual Review
(cid:2)(cid:3) Achievement of advanced-level
reporting under the United
Nations Global Compact
(cid:2)(cid:3) Joint first place in the Ernst &
Young Excellence in Corporate
Reporting 2011 awards for
companies listed on the JSE
The Board is the highest governing
authority of the company. In terms of
the Memorandum of Incorporation,
the number of directors shall not be
less than four and not more than 15.
The Board comprises 14 directors,
of whom only two are executive
directors and 12 independent
non-executive directors. Advised
by the Nominating and Governance
Committee, the Board ensures
that the election of independent
directors falls on reputable persons
of well-known competence and
experience, who are willing to
devote a sufficient part of their
time to the company. The role of
non-executive directors, who are
independent of management, is
to protect shareholders’ interests,
including those of minority
shareholders. They also ensure that
individual directors or groups of
directors are subject to appropriate
scrutiny in their decision-making.
Case study
Gold Fields recognised as one
of the top-5 mining companies
in the DJSI
Find out more online
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
28
Transparency and accountability
The Board of Directors’ Charter
articulates the objectives and
responsibilities of the Board
(see below). Likewise, each of
the Board sub-committees
operates in accordance with
written terms of reference, which
are regularly reviewed by the
Board. The Board takes ultimate
responsibility for the company’s
adherence to sound corporate
governance standards and sees to
it that all business judgements are
made with reasonable care, skill
and diligence.
The Board is kept informed of all
developments at the company,
primarily through the executive
directors and the company
secretary. The Board is also kept
informed through a number of other
mechanisms, including employee
climate surveys, newsletters and
internal staff communication,
amongst others.
The roles of the Chair of the Board
and the Chief Executive Officer
(CEO) are kept separate. Non-
executive director Dr Mamphela
Ramphele was the Chair of the
Board and executive director Nick
Holland was the CEO of Gold Fields
throughout 2011.
In 2011, there were three changes
to the composition of the Board. On
25 February 2011, Sello Moloko was
appointed as an independent non-
executive director. On 1 June 2011,
Delfin Lapus Lazaro was appointed
as an independent non-executive
director, replacing Chris I von
Christierson, who retired from the
Board on 17 May 2011, following 12
years’ service.
The Board is required to meet at
least four times a year. During 2011,
it convened six times.
Figure 2.2: Board meetings and attendance
Directors
16/02/11
18/05/11
02/08/11
04/08/11
09/11/11
29/11/11
MA Ramphele
NJ Holland
K Ansah
CA Carolus
R Dañino
AR Hill
DL Lazaro1
RP Menell
MS Moloko2
DN Murray
DMJ Ncube
Yes
Yes
Yes
Yes
Yes
Yes
Yes Apology
Yes
Yes
-
Yes
-
Yes
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
RL Pennant-Rea
Yes Apology
PA Schmidt
CI von Chistierson 3
GM Wilson
Yes
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
-
Yes
1 Mr Lazaro was appointed to the Board on 1 June 2011
2 Mr Moloko was appointed to the Board on 25 February 2011
3 Mr Von Christierson retired from the Board on 17 May 2011
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes Apology
Yes Apology
Yes Apology
Yes
Yes
Yes
Yes
Yes
Yes Apology
Yes
Yes
Yes
Yes
Yes Apology
Yes
-
Yes
Yes
-
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
-
Yes
Remuneration
Monitoring of performance
The remuneration of non-executive
directors is recommended to the
shareholders by the Board after
receiving external advice. The
directors’ fees must be approved by
shareholders at the annual general
meeting of the company for the
ensuing year.
Non-executive directors only
receive remuneration that is due
to them as members of the Board.
Directors serving as members on
Board sub-committees receive
additional remuneration.
Details of the Directors'
remuneration packages, as well as
those of the Prescribed Officers, are
disclosed in the Directors Report of
the Financial Review 2011.
In line with recommendations
by King III, the Board carries
out a rigorous evaluation of the
independence of directors.
The Chair is appointed on an
annual basis by the Board, with
the assistance of the Nominating
and Governance Committee, after
a rigorous review of the Chair’s
performance and independence.
During the year under review,
the Board and each Board Sub-
Committee underwent a detailed
performance assessment by
Deloitte. Deloitte found that
the structures and processes
governing the Board and its
committees were well established
and functioning well. Furthermore,
the Board had fulfilled its role and
responsibilities and had discharged
its accountability to the company,
shareholders and other stakeholders
in an exemplary manner. Ongoing
learning and education for directors
was identified as an area of
improvement. The results of this
assessment were discussed by the
Board and the sub-committees.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
29
a
c
i
r
f
A
h
t
u
o
S
,
p
e
e
D
h
t
u
o
S
Rotation and Retirement from
the Board
In accordance with our
Memorandum of Incorporation, one
third of the directors shall retire
from office at each annual general
meeting. The first to retire are those
directors appointed as additional
members of the Board during
the year, followed by the longest
serving members. Retiring directors
can be immediately re-elected
by the shareholders at the annual
general meeting.
The Board, assisted by the
Nominating and Governance
Committee, can recommend the
eligibility of retiring directors
(subject to availability and their
contribution to the business) for
reappointment. A director who
has served on the Board for
more than three years since
their last election or appointment
is required under the Memorandum
of Incorporation to retire at the
next annual general meeting.
Board of Directors’ Charter
The Board reviewed and approved
the Board of Directors’ Charter
to align it to the recommendations
of King III. Our Board of Directors’
Charter compels directors to
promote the Vision of the company,
while upholding sound principles
of corporate governance.
Directors’ responsibilities under
the Charter include:
(cid:2)(cid:3) Determining the company’s
Code of Ethics and conducting
its affairs in a professional
manner, upholding the core
values of integrity, transparency
and enterprise
(cid:2)(cid:3) Evaluating, determining and
ensuring the implementation of
corporate strategy and policy
(cid:2)(cid:3) Determining compensation,
development, skills development
and other relevant policies
for employees
(cid:2)(cid:3) Developing and setting best-
practice disclosure and reporting
practices that meet the needs of
all stakeholders
(cid:2)(cid:3) Authorising and controlling
capital expenditure and
reviewing investment capital
and funding proposals
(cid:2)(cid:3) Constantly updating the risk
management systems, including
setting management expenditure
authorisation levels and exposure
limit guidelines
(cid:2)(cid:3) Reviewing executive succession
planning and endorsing senior
executive appointments,
organisational changes and
general remuneration policies.
In this the Board will be guided
by the Remuneration Committee
as well as the Nomination and
Governance Committee
www.goldfields.co.za/pdfs/
charter.pdf
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
30
Transparency and accountability
Independent
non-executive directors
1. Dr Mamphela Ramphele (64)
Chair
MBCHB, University of Natal; PhD
in Social Anthropology, University
of Cape Town; B Com Admin,
University of South Africa; Diploma
in Tropical Health and Hygiene
and a Diploma in Public Health,
University of the Witwatersrand
Dr Ramphele was appointed non-
executive director and Deputy
Chair of the Board of Gold Fields
on 1 July 2010 and Chair of the
Board with effect from 2 November
2010. She is the founder of
Letsema Circle, a Cape Town-
based specialist transformation
advisory company and a director
of Remgro, Anglo American Plc
and Medi-Clinic. Dr Ramphele was
Vice-Chancellor of the University of
Cape Town, a post she took up in
1996, having joined the university
as a research fellow in 1986. She
served as Managing Director of
the World Bank from May 2000 to
July 2004 with responsibility for
human development activities and
the World Bank Institute. She was
Co-Chair of the Global Commission
for International Migration (GCIM)
between 2004 and 2005.
She is a director of a number of
other public and private companies,
including the World Wildlife Fund,
and served as South Africa’s
High Commissioner to the United
Kingdom from 1998 to 2001. Ms
Carolus was the CEO of South
African Tourism from 2001 to 2004
and Chair of the South African
National Parks board for six years.
4. Roberto Dañino (61)
Master of Law, Harvard Law
School; Bachelor of Law, Pontificia
Universidad Catolica del Peru
Mr Dañino has been a director of
Gold Fields since 10 March 2009.
A former Prime Minister of Peru
and his country’s ambassador to
the United States, he serves on
various corporate and non-profit
boards in Peru, Canada, the United
Kingdom and the United States,
including Gold Fields La Cima in
Peru. On 1 January 2011, he was
appointed executive director of
Fosfatos del Pacifico S.A. Mr Dañino
has practised for over 30 years
as a partner of leading law firms
in Lima and Washington DC, was
Senior Vice-President and General
Counsel of the World Bank as
well as Secretary General of the
International Centre for Settlement
of Investment Disputes (ICSID).
>+(cid:8)@(cid:12)(cid:14)(cid:8)X(cid:15)(cid:19)(cid:16)(cid:23)(cid:8)YZ[\
5. Alan R Hill (69)
BSc (Mechanical Engineering), UST
Ghana; MSc (Metallurgy), Georgia
Institute of Technology
BSc (Hons); MPhil (Rock
Mechanics), Leeds University
Mr Ansah was appointed a director
of Gold Fields in April 2004. He
is also a director of Ecobank
Limited (Ghana).
3. Cheryl A Carolus (53)
BA Law; Bachelor of Education,
University of the Western Cape
Ms Carolus was appointed a
director of Gold Fields on 10
March 2009. She is Executive
Chair of Peotona Group Holdings,
an empowerment consortium, and
also chairs the Board of South
African Airways.
Mr Hill joined the Board on 21
August 2009. On 2 October 2010,
he was appointed the CEO and
Chair of Teranga Gold Corporation.
After graduating, Mr Hill worked for
a number of mining firms before
joining Barrick Gold in 1984. He
spent 19 years with Barrick from
which he retired in 2003 as Executive
Vice-President: Development.
Z+(cid:8)](cid:7)(cid:18)(cid:14)(cid:15)(cid:8)^(cid:16)(cid:13)(cid:5)(cid:19)(cid:8)^(cid:16)_(cid:16)(cid:6)(cid:12)(cid:8)YZZ\
BS Metallurgical Engineering,
University of Philippines; MBA,
Harvard Business School
Mr Lazaro joined the Board on
1 June 2011. He also serves on
the Board of Ayala Corporation,
Insular Life Assurance Company
Ltd and Manila Water Company
Inc., amongst other companies. He
served as the President and CEO of
Globe Telecom from 1996 to 1998.
Prior to this, he was head of the
Philippines Department of Energy
and served as the chairman of
various entities from 1992 to 1994.
He started his working career at
Benguet Corporation in 1975 as
a treasurer and held various other
positions in the organisation until he
was appointed vice chairman. He
served in this role from 1989 to 1992.
7. Richard P Menell (56)
BA (Hons), MA (Natural Sciences
Geology), Trinity College
Cambridge; MSc (Mineral
Exploration and Management),
Stanford University, California
Mr Menell was appointed a director
of Gold Fields on 8 October 2008.
He has over 34 years’ experience in
the mining industry, including service
as President of the Chamber of
Mines of South Africa, President and
CEO of Teal Exploration & Mining
as well as Executive Chair of
Anglovaal Mining and Avgold. He is
a director of Weir Group Plc
and Senior Advisor to Credit Suisse.
He also serves as a director of a
number of unlisted companies and
non-profit organisations.
8. Matthews Sello Moloko (46)
BSc (Hons) and Post Graduate
Certificate in Education,
University of Leicester; Advanced
Management Programme, Wharton
Mr Moloko was appointed a
director of Gold Fields on 25
February 2011. He is the executive
Chair, founder and shareholder of
Thesele Group and non-executive
Chair of Alexander Forbes Group.
He has worked at a number of
financial services companies,
including Brait and Old Mutual,
where he was CEO of Old Mutual
Asset Managers until 2004.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Other directorships include Acucap
Limited and Sycom Property Fund
and he chairs the Nelson Mandela
Foundation Investment Committee.
12. Gayle M Wilson (67)
BCom; BCompt (Hons), University
of South Africa; CA (SA)
Mrs Wilson was appointed a
director on 1 August 2008. She was
previously an audit partner at Ernst
& Young for 16 years. She is a non-
executive director of Witwatersrand
Consolidated Gold Resources. She
was previously an audit partner at
Ernst & Young for 16 years, where
her main focus was on mining clients.
Executive directors
13. Nicholas J Holland (53)
(cid:22)(cid:23)(cid:3)(cid:7)(cid:24)(cid:8)(cid:25)(cid:26)(cid:7)(cid:17)(cid:5)(cid:20)(cid:3)(cid:27)(cid:7)(cid:8)(cid:28)(cid:24)(cid:14)(cid:17)(cid:7)(cid:6)(cid:8)Y(cid:22)(cid:25)(cid:28)\(cid:8)
BCom, BAcc, University of the
Witwatersrand; CA (SA)
Mr Holland was appointed an
executive director of Gold Fields
in 1997 and became CEO on 1
May 2008. Prior to that he was the
company’s CFO. Mr Holland has
more than 30 years’ experience in
financial management, of which 22
years were in the mining industry.
Prior to joining Gold Fields, he
was Financial Director and Senior
Manager of Corporate Finance
at Gencor. He is also an alternate
director of the Rand Refinery.
14. Paul A Schmidt (44)
(cid:22)(cid:23)(cid:3)(cid:7)(cid:24)(cid:8)(cid:2)(cid:3)(cid:15)(cid:16)(cid:15)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)(cid:28)(cid:24)(cid:14)(cid:17)(cid:7)(cid:6)(cid:8)Y(cid:22)(cid:2)(cid:28)\(cid:8)
BCom, University of the
Witwatersrand; BCompt (Hons),
Unisa; CA (SA)
Mr Schmidt was appointed CFO
on 1 January 2009 and joined the
Board on 6 November 2009. Prior to
this, he held the positions of acting
CFO from 1 May 2008 and Financial
Controller from 1 April 2003. He has
more than 16 years’ experience in
the mining industry.
9. David N Murray (67)
BA Hons Econ; MBA, University of
Cape Town
Mr Murray was appointed a director
of Gold Fields on 1 January
2008. He has more than 37 years’
experience in the mining industry
and has been CEO of Rio Tinto
Portugal, Rio Tinto Brazil, TVX Gold
Inc, Avgold and Avmin. He is also a
non-executive director of Ivernia Inc.
10. Donald MJ Ncube (64)
BA Economics and Political Science,
Fort Hare University; Postgraduate
Diploma in Labour Relations,
Strathclyde University, Scotland;
Graduate MSc Manpower Studies,
University of Manchester Institute of
Science and Technology; Diploma
in Financial Management; Honorary
Doctorate in Commerce, University
of the Transkei
Mr Ncube was appointed a director
of Gold Fields on 15 February 2006.
Previously, he was an alternate
director of Anglo American
Industrial Corporation and Anglo
American Corporation, a director
of AngloGold Ashanti as well
as non-executive Chair of South
African Airways. He is currently the
Executive Chair of Badimo Gas and
CEO of Zula Mining Supplies.
11. Rupert L Pennant-Rea (64)
BA, Trinity College, Dublin; MA,
University of Manchester
Mr Pennant-Rea has been a director
of Gold Fields since 1 July 2002.
He is Chair of Henderson Group
Plc and The Economist Newspaper
Limited and a director of Hochschild
Mining Plc, Go-Ahead Group, Times
Newspaper Holdings and various
other companies. Previously Mr
Pennant-Rea was the editor of The
Economist and the Deputy Governor
of the Bank of England.
Transparency and accountability
31
1
3
5
7
9
2
4
6
8
10
11
12
13
14
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
32
Transparency and accountability
2.1.5 Board committees
Figure 2.3: Membership and attendance of the Nominating and
Governance Committee
The Board has established a
number of standing committees with
delegated authority from the Board.
The committee members are all
independent non-executive directors
and the CEO is a permanent invitee
to each committee meeting. Each
Board committee is chaired by an
independent non-executive director.
Committees operate in accordance
with written terms of reference. In
addition, the committees are required
to evaluate their effectiveness and
performance on an annual basis and
to report the respective findings to
the Board for consideration.
Nominating and
Governance Committee
It is the responsibility of this
committee, which has five
independent directors, amongst
other things, to:
(cid:2)(cid:3) Develop the company’s approach
towards corporate governance,
including recommendations to
the Board
(cid:2)(cid:3) Identify successors to the posts
of Chair and CEO, and make
appropriate recommendations to
the Board
(cid:2)(cid:3) Consider the mandates of the
Board committees, the selection
and rotation of committee
members and Chairs, and the
performance of each committee
on an ongoing basis
(cid:2)(cid:3) Evaluate the effectiveness of
the Board, its committees and
management, and report the
findings of this evaluation to the
Board itself
Special meetings of the Committee
were held on 16 and 17 May 2011
for the purposes of interviewing
prospective candidates for
appointment to the Board.
Directors
15/02/11
16/05/11
17/05/11
07/11/11
MA Ramphele (Chair)
K Ansah
R Danino
RL Pennant-Rea
CI von Christierson1
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Apology
Yes
Yes
Yes
Yes
-
Yes
Yes
Apology
Yes
-
1 Mr Von Christierson retired from the Board on 17 May 2011
Audit Committee
The Audit Committee has updated,
formal terms of reference which
are set out in the committee’s
Board-approved Charter.
The Board is satisfied that the
committee has complied with
these terms and with its legal and
regulatory responsibilities as set
out in the Companies Act No 71
of 2008, as amended, the
King Code of Governance
Principles 2009 (King III) and
the JSE listing requirements.
The committee consists of five
independent directors and the
Board believes that the members
collectively possess the knowledge
and experience to oversee and
assess the performance of
Gold Fields management and
auditors, the quality of Gold Fields
financial controls, the preparation
and evaluation of Gold Fields
financial statements and Gold Fields
financial reporting.
The Board has established and
maintains internal controls and
procedures, which are reviewed on
a regular basis. These are designed
to manage, rather than eliminate,
the risk of business failures and
to provide reasonable assurance
against such failures.
It is the duty of this committee,
amongst other things, to monitor
and review:
(cid:2)(cid:3) The effectiveness of the internal
audit function
(cid:2)(cid:3) The appointment of
external auditors, audit
findings and reports
(cid:2)(cid:3) Reports of both internal and
external auditors
(cid:2)(cid:3) Evaluation of the performance of
the Chief Financial Officer
(cid:2)(cid:3) The adequacy and effectiveness
of the company’s enterprise-
wide risk management policies,
processes and strategies
(cid:2)(cid:3) The governance of information
technology (IT) and the
effectiveness of the company’s
information systems
(cid:2)(cid:3) Quarterly and annual financial and
operational reports, the annual
financial statements and all other
widely distributed documents
(cid:2)(cid:3) The Form 20-F filing with the
US Securities Exchange
Commission (SEC)
(cid:2)(cid:3) Accounting policies of the Group
and proposed revisions
(cid:2)(cid:3) Compliance with applicable
legislation, requirements of
appropriate regulatory
authorities and the company’s
Code of Ethics
(cid:2)(cid:3) The integrity of the Integrated
Annual Report (by ensuring
that its content is reliable and
recommending it to the Board
for approval)
(cid:2)(cid:3) Policies and procedures for
preventing and detecting fraud
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
33
Figure 2.4: Membership and attendance of the Audit Committee
Members
14/02/11
10/03/11
23/03/11
20/04/11
16/05/11
03/08/11
31/08/11
07/11/11
GM Wilson
RP Menell
MS Moloko2
DMJ Ncube
RL Pennant-Rea
Yes
Yes
-
Yes
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
-
Apology
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Apology
Apology
Yes
Yes
Yes
Yes
2 Mr Moloko was appointed to the Board on 25 February 2011 and to the Audit Committee on 18 May 2011
Internal and external auditors have
unrestricted access to the Audit
Committee, the Audit Committee Chair
and the Chair of the Board, ensuring
that auditors are able to maintain their
independence. Both the internal and
external auditors report at the Audit
Committee meetings. The committee
also meets with both internal and
external auditors separately, without
other invitees being present.
The committee is responsible for
recommending the appointment
of a firm of external auditors to the
Board, who in turn will recommend
the appointment to the shareholders.
The committee is also responsible
for determining that the designated
appointee has the necessary
experience, qualifications and skills,
and that the audit fee is adequate.
The committee reviewed and
assessed the independence of
the external auditor, including their
confirmation in writing that the criteria
for independence as set out in the
rules of the Independent Regulatory
Board for Auditors and international
bodies have been followed. The
committee is satisfied that KPMG is
independent of the group. An audit
fee for the period of R24 million
(US$3 million) was approved, as
well as R600,000 (US$75,000) for
tax advisory compliance services
and R5.1 million (US$706,000)
in assurance services on bonds,
sustainability reporting and
other agreed-upon services. The
committee determines the nature and
extent of non-audit services that the
firm can provide and pre-approves all
permitted non-audit assignments by
the company’s independent auditor.
The committee recommended the
re-appointment of KPMG as the
company’s external auditor.
The committee approved the audit
plan presented by the external
auditors and monitors progress
against the plan. The audit plan
forms the basis of providing the
committee with the necessary
assurances on risk management,
the internal control environments
and IT governance. The committee
recommends that KPMG is
reappointed for the 2012 financial
year with Mr Ian Kramer as the group
audit engagement partner.
The internal control systems of the
Group are monitored by internal
auditors, who report their findings
and recommendations to the
Audit Committee and to senior
management. The Audit Committee
determines the purpose, authority
and responsibility of the internal audit
function in an Internal Audit Charter.
The internal audit function is headed
by the senior manager, internal audit
– who can be appointed or dismissed
by the Audit Committee. The Audit
Committee is satisfied that the senior
manager has the requisite skills and
experience and that he is supported
by sufficient staff with appropriate
skills and training.
Gold Fields Internal Audit (GFIA)
is an independent assurance and
consulting division designed to add
value and improve the operations of
the Gold Fields Group.
GFIA operates in accordance with
the International Standards for the
Professional Practice of Internal
Auditing as prescribed by the
Institute of Internal Auditors (IIA).
GFIA reports deficiencies to the
committee every quarter together
with recommended remedial
actions, which are then followed
up. Internal audit provided the
committee with a written report,
which assessed the internal financial
controls, IT governance and the risk
management process as adequate.
During the year an Internal Audit
Maturity Assessment was carried
out by an independent supplier,
which found “a strong practice”.
The Audit Committee is also
responsible for oversight of the risk
management function. Enterprise
Risk Management (ERM) processes
are deeply embedded in the Group
and during the year under review
the committee ensured that the risk
table was regularly challenged,
assessed and updated and that the
necessary measures were put in
place to mitigate these risks.
The Audit Committee is responsible
for IT Governance on behalf of
the Board and review of the IT
manager’s report at each meeting.
The Financial Director’s expertise
was evaluated by the Audit
Committee. The Committee is
satisfied that the Chief Financial
Officer has the appropriate
expertise and experience to carry
out his duties as the financial
director of the company and
is supported by qualified and
competent senior staff.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
34
Transparency and accountability
Audit Committee statement
Figure 2.5: Membership and attendance of the Remuneration Committee
Based on information from and
discussions with management
and internal and external auditors,
the Audit Committee has no reason
to believe that there were any
material breakdowns in the design
and operating effectiveness of
internal financial controls during
the year and that the financial
records can be relied upon as
the basis for preparation of the
annual financial statements.
The Audit Committee considered
and discussed this Integrated
Annual Report with both
management and the external
auditors. During this process,
the committee:
(cid:2)(cid:3) Evaluated significant judgments
and reporting decisions
(cid:2)(cid:3) Determined that the going
concern basis of reporting
is appropriate
(cid:2)(cid:3) Evaluated the material factors
and risks that could impact on
the annual report
(cid:2)(cid:3) Evaluated the completeness of
the financial and sustainability
discussion and disclosures
(cid:2)(cid:3) Discussed the treatment
of significant and unusual
transactions with management
and the external auditors
The Audit Committee considers
that this Integrated Annual Report
complies in all material respects
with the statutory requirements of
the various regulations governing
disclosure and reporting of the
annual financial statements and
that the annual financial statements
comply in all material respects with
the Companies Act 71 of 2008 (as
amended) and IFRS. The Audit
Committee has recommended to
the Board that the annual financial
statements be adopted and
approved by the Board.
Directors
15/02/2011
17/05/2011
03/08/2011
08/11/2011
RL Pennant-Rea (Chair)1
MA Ramphele
DMJ Ncube
CI von Chistierson2
GM Wilson
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
-
Yes
1 Mr Pennant-Rea was appointed Chair of the Committee on 17 May 2011
2 Mr Von Christierson retired from the Board on 17 May 2011
Figure 2.6: Membership and attendance of the Safety, Health and Sustain-
able Development (SH&SD) Committee
Directors
15/02/11
17/05/11
03/08/11
07/11/11
DN Murray (Chair)
K Ansah
CA Carolus
R Dañino3
RP Menell
MA Ramphele
Yes
Yes
Yes
-
Yes
Yes
Yes
Yes
Apology
-
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Apology
Yes
Yes
3 Mr Dañino was appointed as a member of the SH&SD Committee on 18 May 2011
Remuneration Committee
It is the responsibility of this
committee, amongst other things, to:
(cid:2)(cid:3) Establish the company’s
remuneration philosophy
(cid:2)(cid:3) Establish the terms and
conditions of employment
for executive directors and
other senior executives (which
currently includes a short-term
performance-linked bonus
scheme and a long-term share
incentive scheme)
(cid:2)(cid:3) Review remuneration policies on
a regular basis
The notice periods of the CEO and
the CFO are two years and one
year respectively. The company
has a maximum exposure of two-
and-a-half years’ remuneration in
respect of the CEO and two years’
remuneration for other members of
the Executive Committee, including
the CFO. These limits apply when
their services are terminated as a
result of a takeover or a merger.
Details of Directors’ fees and equity
settled instruments, as well as a full
remuneration report, are contained
in the Directors’ Report in the
Financial Review 2011.
Safety, Health and Sustainable
Development Committee
It is the responsibility of this
committee, amongst other things, to
assist the Board in its oversight of
the company’s environmental, health
and safety programmes – as well as
its socio-economic performance.
In particular, this includes the
monitoring of the company’s
efforts to minimise health, safety
and mining related incidents
and accidents, and to ensure
its compliance with relevant
environmental regulations. All
members of the committee have
been selected on the basis of their
considerable experience in the field
of sustainable development.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
35
Executive Committee
The Executive Committee (ExCo)
is not a committee of the Board.
It is primarily responsible for
the implementation of company
strategy, as well as carrying out the
Board’s mandates and directives.
ExCo meets on a regular basis
to review company performance
against set objectives and develops
company strategy and policy
proposals for consideration by
the Board.
ExCo also assists the Board in
the execution of the company’s
disclosure obligations. A series
of guidelines on disclosure have
been disseminated throughout
the company. Furthermore, a
disclosure co-ordinator has been
appointed at each operation to
ensure appropriate implementation
throughout the company.
Each of Gold Fields operating
subsidiaries has established
Board and executive committee
structures to ensure sound
corporate governance practices
and standards. At least one of the
company’s executive directors
serves on the Boards of the
operating subsidiaries.
Members of the Executive
Committee, with the exception of the
Company Secretary, have also been
identified as the Prescribed Officers
of the company in terms of section
66(10) of the Companies Act 71 of
2008 (as amended).
Additional content online
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Figure 2.7: Membership and attendance of the Capital Projects Control and
Review Committee
Directors
14/02/11
16/05/11
03/08/11
08/11/11
RP Menell (Chair)
AR Hill
Dl Lazaro4
DN Murray
CI von Christierson5
GM Wilson
Yes
Yes
-
Yes
Yes
Yes
Yes
Yes
-
Yes
-
Yes
Yes
Yes
-
Yes
-
Yes
Yes
Yes
Yes
Yes
-
Yes
4 Mr Lazaro was appointed to the Board on 1 June 2011 and this committee on 4 August 2011
5 Mr Von Christierson retired from the Board on 17 May 2011
(cid:2)(cid:3) Gold Fields complies with the
Employment Equity Act (as
amended), the Broad Based Black
Economic Empowerment Act (as
amended) and the provisions of
the 2014 Mining Charter
(cid:2)(cid:3) Gold Fields directors and staff
comply with the company’s Code
of Ethics
(cid:2)(cid:3) Gold Fields practices labour and
employment policies that comply
with the terms of the International
Labour Organization (ILO)
protocol on decent work and
working conditions
(cid:2)(cid:3) Gold Fields ensures the
continued training and skills
development of its employees
(cid:2)(cid:3) Gold Fields performs its
responsibilities in respect of
social and ethics matters and that
these policies are reviewed on an
annual basis, or as required
The Social and Ethics Committee
is comprised of the chairs of the
Audit Committee, Remuneration
Committee, the Safety, Health
and Sustainable Development
Committee and the Nominating and
Governance Committee. Current
members of the committee, which
had its first meeting on 14 February
2012, are Ms Wilson, Mr Pennant-
Rea, Mr Murray and Dr Ramphele,
in their respective capacities, while
Mr Dañino is the Chair.
Capital Projects Control and
Review Committee
It is the responsibility of this
committee, amongst other things, to:
(cid:2)(cid:3) Satisfy the Board that the
company has used appropriate
methodologies in evaluating and
implementing capital projects
in excess of R1.5 billion or
US$200 million
(cid:2)(cid:3) Ensure that adequate controls
are in place to review such
projects from inception
to completion, and make
appropriate recommendations
to management and the Board
Social and Ethics Committee
It is the responsibility of this
committee, which was formed by
the Board on 29 November 2011, to
ensure, amongst other things, that:
(cid:2)(cid:3) Gold Fields discharges its
statutory duties in respect of
section 72 of Companies Act 71
of 2008 (as amended), dealing
with the structure and composition
of board sub-committees
(cid:2)(cid:3) Gold Fields adequately
implements the 10 principles
on sustainable development
of the International Council on
Mining and Metals and the 10
principles of the United Nations
Global Compact
(cid:2)(cid:3) Gold Fields upholds the goals
of the Organisation of Economic
Co-operation and Development
(OECD) recommendations
regarding corruption
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
36
Transparency and accountability
2.2 Risk management
Effective and integrated risk
management sits at the heart
of true business sustainability.
Gold Fields has a well-established
Enterprise Risk Management (ERM)
process, which not only covers our
‘traditional’ operational and business
risks, but also our environmental,
social, health and safety risks.
During the year, our international
operations were surveyed by the
IMIU (International Mining Industry
Underwriters) and our South African
mines by Zurich Risk Engineers,
part of Zurich Re. Both agencies
noted continued improvement in risk
management at these operations
and all of the mines are placed in
the top quartile of the approximate
400 mines assessed.
Gold Fields has operated for 11
years without making a property
claim into the insurance market.
Additional content online
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The overriding purpose of the
ERM process is to help Gold Fields
become more resilient in the global
business environment and achieve
its strategic objectives – to grow
Gold Fields, to optimise its
operations and to secure its
future. It also supports our efforts
to achieve the highest levels of
corporate governance, as well
as full compliance with the risk
management requirements of South
Africa’s King III Code.
The ERM process is comprised
of two integrated and well-aligned
components: operational risk
management and strategic risk
management (see Figure 2.8).
It is aligned with the ISO 31000
international standard on
risk management.
During 2011, the ERM process
at Gold Fields was reviewed by
PricewaterhouseCoopers, which
found that:
(cid:2)(cid:3) The ERM process is fully
compliant with the risk
management requirements
of King III
(cid:2)(cid:3) All the key principles of the
ISO 31000 risk management
guidelines have been adopted
(cid:2)(cid:3) Gold Fields has established
a mature risk management
process that is leading many
of the approaches in the non-
financial sector
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)>+‘(cid:10)(cid:8)(cid:25)(cid:15)(cid:20)(cid:7)(cid:6)(cid:13)(cid:6)(cid:3)(cid:19)(cid:7)(cid:8){(cid:3)(cid:19)|(cid:8)}(cid:16)(cid:15)(cid:16)(cid:4)(cid:7)!(cid:7)(cid:15)(cid:20)(cid:8)(cid:13)(cid:6)(cid:12)(cid:17)(cid:7)(cid:19)(cid:19)(cid:8)~(cid:8)(cid:31)(cid:7)(cid:14)(cid:15)(cid:3)(cid:20)(cid:3)(cid:12)(cid:15)
Enterprise Risk Management
Strategic risk management
The identification, analysis,
evaluation and treatment of
significant or material risks which
could have a profound effect
on the sustainability of
the business
Operational risk management
The identification, analysis,
evaluation and treatment of hazards
and risks in order to create a safer,
healthier, more productive,
environmentally friendlier
and sustainable
working environment
Figure 2.9: Risk management review process
Audit Committee Risk Review
Disclosure of risks
to all Stakeholders
Risks from the
external environment
Group Executive Committee Risk Review
Regional, operational, service divisions and new project strategic risk reviews on a quarterly basis
Top 10 risks and risk mitigating actions discussed at quarterly business reviews
Baseline, initial or ‘whole of mine’ risk assessment and risk profile
Hazard identification
and risk assessment
in terms of SIMRAC
AUS\NZ 4360
Issue based risk assessment – Change Management
Ongoing or continuous risk assessment
Project risk
management guidline
and HAZOPS
– Exploration site
risk assessments
FOUNDATION – If we cannot mine safely, we will not mine
PRINCIPLE – Stop, Think, Verify, Fix and Continue
k
s
i
r
i
c
g
e
t
a
r
t
S
t
n
e
m
e
g
a
n
a
m
t
n
e
m
e
g
a
n
a
m
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
37
Figure 2.10: Risk, strategy and performance (within the tolerance levels set by the Board)
Risk Area
Aspirations
Tolerance level
Targets
2010
2011
Optimise our assets
Safety
Health
Zero Harm
Zero Harm
Zero Harm
Zero Harm
FIFR – Zero
SIFR – 25% less1
LTIFR – 25% less1
MTIFR – 25% less1
2013 MHSC milestones
for Silicosis & NIHL
Environment
Zero Harm
Zero Level 4 and 5 incidents
Zero
5Moz by 2015
NCE 25%
95% compliance
3.5Moz
NCE 15% - 20%
0.11
2.22
4.392
7.162
0.12
2.64
4.69
5.68
On track On track
Zero
3.5
16%
Zero
3.5
25%
Gold Delivery
Securing our future
Human
Resources
Licence to
operate
Ethics and
Corporate
Governance
Pipeline of scarce and
critical skills
Global leader
in sustainable
gold mining
Full compliance – SOX and
substantial compliance to
King III
60% – successor cover ratio
for top 250 employees
Full compliance with all
legal and community
commitments
60%
50%
70%
Full compliance
100%
100%
No material / significant
failures
No material / significant
failures
Nil
Nil
Growing Gold Fields
Capital Projects
Mergers &
Acquisitions
Exploration
Project delivered on time /
budget
Proper assessment of risk
and returns commensurate
with the risk
Appropriate
balance between geological
potential & political risk
7% - 10% overrun
South Deep, Chucapaca,
FSE, APP, Yanfolila
On track On track
IRR3 5% – Near-mine
IRR 10% – Greenfields
Leaning towards greater
geological potential in high
risk areas
As per IRR
On track On track
As per GBAR4
On track On track
Targets achieved
Improved on previous year
Targets not achieved
1 South Africa only – other regions are subject to a 20% reduction
target for SIFR, LTIFR and MTIFR
3 Internal Rate of Return
4 Global Business Area Rating system
2 Restatement – LTIFR previously reported as 4.38 and MTIFR previously
reported as 7.09. Please see p4 for explanation
Risk review process
The multi-stage strategic risk
management process starts with
quarterly strategic risk management
assessments at each of our mines
and service divisions. In addition, all
sites regularly conduct operational
risk assessments compliant with
standards set by Simrac (Safety
in Mines Research Advisory
Committee) in South Africa and the
AU/NZ Standard 4360 in Australasia.
Key strategic risks are identified and
analysed, and mitigating actions are
put in place (or eviewed if already
in place). The regions’ top risks are
forwarded to the egional executive
committees, which review the risk
register and decide on appropriate
mitigating actions.
The Group’s top strategic risks
are then reviewed by the Gold Fields
Executive Committee (ExCo) on
a biannual basis. Mitigation
strategies are developed on the
basis of this review, which are
presented at the Audit Committee’s
dedicated risk meetings and
reviewed after six months.
The Board and company
management are responsible for
risk governance and management.
Nonetheless, the integral involvement
of all line managers in the process is
essential to ensure the effectiveness
of the system.
Risk management assurance
Our Risk Management Charter
provides for four levels of ERM
process assurance: (1) Financial
Internal Controllers review mitigating
strategies on a regular basis to
ensure they are being implemented.
These reviews must be captured
in the Cura risk management
software system; (2) Internal
Audit conducts an annual review
on the effectiveness of the risk
management process; (3) Internal
Audit provides assurance to the
Board that the risk management plan
is integrated into the daily business
activities of Gold Fields; (4) Internal
Audit conducts an annual review of
the mitigating strategies of the top
risks in the risk registers to ensure
they are being implemented.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
38
Transparency and accountability
2.2.1 Top 10 Group heat map
The heat map below sets out the top 10 Group risks, as identified through our Enterprise Risk Management (ERM)
process (p36-37). This represents the Group’s ‘top’ operational, sustainability and financial risks, as extracted from
regional and operational risk registers. ‘Severity’ is based on a pre-determined scale that uses defined measures
depending upon the risk area being assessed. These include health and safety, business interruption, corporate
image, environment and earnings/capital at risk. ‘Probability’ is based on both percentage probability (10% to
100%) and frequency (once every 50 years to once a week).
Maximum
y
t
i
r
e
v
e
S
6
7
4
2
5
9
8
10
1
3
Negative investor perception of host countries
Occupational illnesses
Non-delivery on project feasibility studies
Loss of social licence to operate
Volatility in gold and copper prices and exchange rates
Erosion of NCE margin
Regulatory, political and socio-economic demands
Non-delivery on planned gold output
Minimum
Probability
Safety-related stoppages
Skills shortage and retention
Maximum
Gold Fields risk review process
(cid:2)(cid:3) The Executive Committee of each operation and region conducts a risk
review of the top risks and mitigating strategies on a quarterly basis
(cid:2)(cid:3) The Mine Manager presents the top 10 risks and mitigation actions to
members of the ExCo during quarterly business reviews. The impacts of
relevant mitigating actions are noted
(cid:2)(cid:3) Next, the Group Risk Manager extracts all of the top risks from the regional
and operational registers in line with the tolerance levels, and compiles the
Group risk register
(cid:2)(cid:3) The risks are then assessed and moderated in a Group context by the
relevant risk owners and ExCo members
(cid:2)(cid:3) A top risk register review is conducted and Group-wide mitigating
strategies are set and monitored during the ExCo Risk Meeting
(cid:2)(cid:3) A review of the top risks is conducted by the Audit Committee twice
a year
Note: All mitigation actions are evaluated in order to assess their effectiveness
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Assessment
Prediction
Prevention
Mitigation
Management
Monitoring
Transparency and accountability
39
Risk mitigating strategies
Risk: Safety-related stoppages
1
(cid:2) Renewed Safe Production Management approach, with a focus on engineering-out risk, capacity
building and compliance
(cid:2) Enhanced visible leadership and behaviour-based safety initiatives
(cid:2) Implementation of a comprehensive strategy to achieve South Africa’s 2013 mining industry milestones
(cid:2) Ongoing constructive engagement strategy with the Department of Mineral Resources in South Africa
Risk: Non-delivery on planned gold output
2
(cid:2) Implementation of the Shaft Full Potential programme at our South African operations, as part of the
Business Process Re-engineering (BPR) project. This programme includes initiatives such as:
· Reserve flexibility through accelerated underground development
· Enhanced ore flow mapping and diagnostic analysis
· Enhanced management of mining mix procedures
Risk: Skills shortage and retention
Page(s)1
p56-60
p57-59
p56-60
p59
p48-49
3
(cid:2) Competitive remuneration and benefits strategy, based on salary surveys and benchmarking
p128, 130-132
(cid:2) Proactive support of tertiary education through bursary programmes and sponsorship of mining schools
(cid:2) Proactive leadership development and talent management programme
Risk: Erosion of NCE margin
4
(cid:2) Implementation of the BPR programme to achieve:
· Enhanced planning and sequencing to improve safety and efficiency
· Enhanced cost management and control systems
· Advancement of owner mining and maintenance at our Ghanaian and Australian operations
Risk: Regulatory, political and socio-economic demands
5
(cid:2) Implementation of empowerment transactions to meet transformation requirements in South Africa
(cid:2) Implementation of Employee Share Ownership Plan for selected employees in South Africa
(cid:2) Ongoing review and implementation of Social and Labour Plans (SLPs)
(cid:2) Continued engagement with host governments
Risk: Non-delivery on project feasibility studies
6
(cid:2) Board oversight of projects through the Capital Investment Framework
(cid:2) Enhanced strategic and capital planning processes
(cid:2) Enhanced business and exploration risk assessment processes
Risk: Volatility in gold and copper prices and exchange rates
(cid:2) Enhanced strategic and capital planning processes
7
(cid:2) Increased geographical and currency diversification
(cid:2) Ongoing cost control, including BPR implementation
Risk: Loss of social licence to operate
8
(cid:2) Full compliance with the commitments made to communities
(cid:2) Proactive stakeholder engagement and community investment strategy
(cid:2) Review of our Sustainable Development strategy in our regions
Risk: Negative investor perception of host countries
9
(cid:2) Improved production performance of the South African mines
(cid:2) Transparent engagement with investors on issues of concern
(cid:2) Increased geographic diversification
Risk: Occupational illnesses
10
(cid:2) Enforcement of mandatory codes of practice and enhanced noise- and dust-control measures
(cid:2) Regular medical surveillance of employees and contractors
p146
p130-132
p48-50
p155
p41
p144
p154
p104
p102-105
p103, 105
p102-105
p46, 100, 109
p48-49
p141-149
p40-44, 141-148
p24, online
p48-49, 78-87
p38, 40
p46, 100, 109
p137
p137
(cid:2) Implementation of a comprehensive strategy to achieve South Africa’s 2013 mining industry milestones
p136-140
1 See p18-19 and p19-21 respectively for associated business objectives for 2011 and 2012
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
40
Transparency and accountability
2.3 Investors and
stakeholder engagement
The sustainability of our business is
highly reliant on proactive and frank
stakeholder engagement.
Our engagement with stakeholders
falls into two types:
(cid:2)(cid:3) Direct engagement, including
organised dialogues, roundtable
discussions, one-on-one
meetings, internal surveys and
regular engagement with local
communities at each operation
(cid:2)(cid:3) Indirect engagement, including
the use of external benchmarks
and standards that are designed
to reflect and address societal
expectations (p26-27)
At a strategic level, our corporate
and regional management
teams likewise implement an
ongoing programme of direct
and indirect engagement.
At an operational level, all our
mines identify, prioritise and
engage stakeholder groups that
have the potential to affect their
operational, sustainability or
financial performance. They do so
in accordance with the AA 1000
Stakeholder Engagement Standard.
Relevant outcomes from our direct
stakeholder engagements are
logged and communicated through
our Enterprise Risk Management
(ERM) process – and so form
a vital part of the Group’s risk
management programme (p36-39).
Figure 2.11: Table of relevant and material issues raised by stakeholders and location in the Integrated Annual Review
Stakeholder issues
Stakeholders involved
Location(s)
Frequency
of engagement
Current and future investors
Health, safety and impact
on production
General
All regions
Achievement of 2014 equity
ownership targets
General
Uncertainty around mining
rights and security of tenure
Labour intensity and
productivity levels at our
underground operations
General
General
Union activity, including strike
action at our South African
operations in June 2011
General
High energy prices and
threats to electricity supply
General
South Africa
South Africa,
Ghana, Peru
South Africa
Quarterly, as well as regular presentations,
notices and
meetings throughout the year
Investor presentations and releases, as
well as meetings around Mining Charter
compliance
As requested
Quarterly, as well as regular presentations,
notices and
meetings throughout the year
Ghana and
South Africa
As requested and notices
where relevant
Australia, Ghana
and South Africa
Quarterly, as well as regular presentations,
notices and
meetings throughout the year
Increases in taxes and
mineral royalties
Regulatory and reporting
compliance (including
King III, SEC, NYSE, etc.)
Effective risk management
(short-, medium-
and long-term) and
business sustainability
2011*
Impact of climate change
regulation, including
carbon taxes
Delivery on our advanced
stage projects
Impact of potential silicosis
litigation on the South African
mining sector
General
General
All regions
All regions
General
All regions
As requested and notices
where relevant
As requested and notices
where relevant
Quarterly, as well as regular presentations,
notices and
meetings throughout the year
General
General
General
Australia and
South Africa
As requested and in
regular presentations
All regions
Quarterly, as well as regular presentations,
notices and meetings throughout the year
South Africa
As requested
* Entries marked as ‘2011’ indicate ‘new’ stakeholder issues that have been identified during the course of 2011
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
41
Figure 2.11: Table of relevant and material issues raised by stakeholders and location in the Integrated Annual Review
Stakeholder issues
Stakeholders involved
Location(s)
Frequency
of engagement
Unions and employees
Improved safety performance
and two-way engagement
between managers and
mining teams
Increased remuneration
across the workforce,
including strike action at our
South African operations in
June 2011
Improvements to high-
density accommodation and
management of challenges
around the payment of living
out allowances
Provision of internationally
competitive remuneration
and benefits packages
Workforce transformation,
including Ghanaian nationals,
Historically Disadvantaged
South Africans and women
Employee access to
Voluntary Counselling and
Testing (VCT) and Highly
Active Anti-Retroviral
Treatment (HAART)
2011*
Employee Share
Ownership Plan (ESOP)
Governments
Empowerment,
transformation and
adherence to the revised
Mining Charter
More effective safety
management to eliminate
fatalities and serious injuries
Energy efficiency
and supply
Enhanced taxation and
royalty payments amid high
commodity prices and weak
public finances
Effective water management
and regulation, including
water quality, availability
and compliance
Approval of mining and
other permits
National Union of
Mineworkers, Solidarity
and the United
Association of
South Africa
Ghana Mineworkers'
Union and National
Union of Mineworkers
South Africa
At mine level – daily, weekly and monthly. At
senior level at least twice a year
Ghana and South Africa Wage increases discussed every two years
in South Africa, and annually in Ghana
National Union
of Mineworkers
South Africa
Regular interaction at mine level and during
remuneration negotiations (see above)
Managers
and engineers
General
All regions
Regular engagement as
part of routine human
resources procedures
Ghana and
South Africa
Regular engagement during routine union
meetings
General
South Africa
Regular engagement during routine union
meetings
General
South Africa
Union representation
on ESOP Trust
South Africa
South Africa
Frequent, close cooperation, including
participation in the Mining Industry Growth,
Development and Employment Task Team
(MIGDETT)
and presentation to Parliament
Frequent, close cooperation throughout the
year, including guidance on meeting 2013
Health and Safety Milestones
Ghana and South Africa Regular engagement throughout the year,
Department of Mineral
Resources (DMR),
Parliamentary Sub-
Committee on
Mineral Resources
Mine Inspectorate
of the DMR
Relevant energy
departments, the
Electric Company of
Ghana, the Volta River
Authority and Eskom
Relevant finance
departments
All regions
including through the Energy Intensive
Users Group, the South African Chamber of
Mines and directly
At least once/twice a year through local
Chambers of Mines, and directly and more
frequently
where required
Regular engagement through routine
water quality monitoring and high level
engagement through local Chambers of
Mines
Engagement as required
Relevant environmental
departments and
water utilities
All regions
Relevant
government
departments
All regions, including
Resource Development
and Feasibility projects
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
42
Transparency and accountability
Figure 2.11: Table of relevant and material issues raised by stakeholders and location in the Integrated Annual Review
Stakeholder issues
Stakeholders involved
Location(s)
Frequency
of engagement
Governments (continued)
Disclosure and management
of carbon emissions,
including carbon taxation
Enhanced transparency
around payments in mineral
value chains, as well as the
sourcing of conflict minerals
Reducing the risk of future
Acid Mine Drainage from
closed mines in the West Wits
Rand area
Native title
and traditional
heritage issues
Australian Department
of Climate Change
and the South African
Department of Energy
Government of the
United States
Australia and
South Africa
Formal submission and engagement,
directly and through relevant business
organisations
All regions
At least once/twice a year via the World
Gold Council
Department of
Water Affairs
South Africa
Frequent engagement throughout the year,
in some cases monthly – both directly and
via the South African Chamber of Mines
Department of
Indigenous Affairs,
Government of Western
Australia
Australia
As required, including registration of
identified heritage sites
Environmental impact of
mining activities
Environmental
Protection Agency
Ghana
At least once a year
2011*
Trespass of artisanal and
small-scale miners at our
Damang mine
Regional and national
government, including
public security services
Ghana
Engagement
as required
Local communities at
Damang and Tarkwa
in Ghana, the El
Tingo and Hualgayoc
communities in
Peru, the West Rand
communities in South
Africa, communities
around Yanfolila (Mali),
Chucapaca (Peru)
and Far Southeast
(Philippines)
Tarkwa communities in
Ghana, the El Tingo and
Hualgayoc communities
in Peru, communities
in Mankayan in the
Philippines and the
West Rand communities
in South Africa
General
Local communities
Generation of direct
employment opportunities
for local people
Maintenance of local water
quality through pollution
control, infrastructure
development and
community monitoring
Broader access to socio-
economic development
programmes, including
education and healthcare
services, as well as
agricultural support
programmes
Ghana, Peru,
South Africa and
exploration locations
Frequent engagement throughout the year,
in some cases weekly
Ghana, Philippines,
Peru and South Africa
Regular engagement throughout the year
Ghana, Peru,
South Africa and
exploration locations
Regular engagement throughout the year, in
some cases monthly
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
43
Figure 2.11: Table of relevant and material issues raised by stakeholders and location in the Integrated Annual Review
Stakeholder issues
Stakeholders involved
Location(s)
Local communities (continued)
Identification and protection
of indigenous heritage
Indigenous communities
near the Agnew mine
Australia
Frequency
of engagement
As required
Management of the
impact of mining
activities on local
farming, including
compensation
and resettlement
2011*
Local communities
at Damang and
Tarkwa in Ghana, and
communities around
South Deep mine in
South Africa
Ghana and South Africa Frequent engagement throughout the year,
in some cases weekly
Artisanal and small-scale
mining activity on lease areas
Communities at
Damang and the
Yanfolila project, Mali
West Africa
Regular engagement
and as required
Granting of Free Prior and
Informed Consent (FPIC)
for mining activities from
indigenous communities
Kankana-ey
communities
in Mankayan
NGOs and Associations
Water quality at Gold Fields
operations, including specific
concerns around Acid
Mine Drainage and
uranium pollution
Wonderfonteinspruit
Action Group,
Federation for a
Sustainable Environment
Philippines
Regular engagement
South Africa
At least twice a year
Preservation of biodiversity
inside and outside our
concession areas
Ghana Wildlife Society,
Leadership for
Conservation Africa
Ghana
Regular participation on LCA Ghana
steering committee
Carbon disclosure
and management
Carbon Disclosure
Project
Australia, South Africa
Once a year
Prevention of 'conflict gold'
from entering the global gold
value chain
2011*
Water quality/availability,
land stability and local
economic development
World Gold Council
All regions
As required
Various civil society
groups in Mankayan
Philippines
Comprehensive and
on-going engagement
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
44
Transparency and accountability
3. Optimising
our operations
‘Optimising our operations’ means bringing our attributable Mineral
Resources of 217.0 million gold equivalent ounces and attributable
Mineral Reserves of 80.6 million gold equivalent ounces to account in
a way that is cost effective, safe and environmentally responsible.
Gold Fields has eight world-class mines. It is fundamental to the
attainment of Group strategy for each mine to produce to its potential
and maintain stability, predictability and consistency. In particular, our
focus is on:
(cid:21)(cid:8) Pursuing ‘Zero Harm’ through the Group's Safe Production philosophy,
with a particular focus on a safe and healthy working environment and
the development of a safe working mentality amongst employees
(cid:21)(cid:8) Maximising the operational potential of our mines, through investment
(cid:3)(cid:15)(cid:8)!(cid:7)(cid:17)(cid:23)(cid:16)(cid:15)(cid:3)(cid:19)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)#(cid:8)(cid:3)(cid:15)(cid:24)(cid:6)(cid:16)(cid:19)(cid:20)(cid:6)(cid:5)(cid:17)(cid:20)(cid:5)(cid:6)(cid:7)(cid:8)(cid:31)(cid:7)(cid:27)(cid:7)(cid:18)(cid:12)(cid:13)!(cid:7)(cid:15)(cid:20)#(cid:8)!(cid:3)(cid:15)(cid:3)(cid:15)(cid:4)(cid:8)"(cid:7)(cid:26)(cid:3)(cid:30)(cid:3)(cid:18)(cid:3)(cid:20)’(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:12)(cid:6)(cid:7)(cid:8)
reserve development
(cid:21)(cid:8) Minimising our environmental impact, by effectively managing
our pollution risks, energy consumption, carbon emissions and
closure-planning
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Transparency and accountability
45
Contents
3. Optimising our operations
Ensuring our mines deliver ........................................ Page 46
Our approach to operational excellence .................. Page 48
The Gold Fields safety promise................................. Page 56
Respecting and protecting the environment ............. Page 61
Regional overview: Australasia ................................. Page 72
Regional overview: South Africa................................ Page 78
Regional overview: South America............................ Page 88
Regional overview: West Africa ................................. Page 92
Highlights
25%
Group Notional Cash Expenditure (NCE) margin – in line
with long-term target
US$159m
Savings through Business Process Re-engineering
during 2011
17%
Energy savings in South Africa by end-2011
(against 2007 baseline)
a
n
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h
G
,
g
n
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t
a
e
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o
g
n
k
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u
r
T
i
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
46
Optimising our operations
3.1 Ensuring our
mines deliver
During 2011, we maintained our
equivalent attributable production
at 3.5 million ounces of gold (2010:
3.5 million ounces), despite slightly
lower production from KDC and
Beatrix, by:
(cid:2)(cid:3) Increasing our percentage
interest in our Ghanaian and
Peruvian operations (p118), which
raised our attributable production
for 2011 by 133,000 ounces
(cid:2)(cid:3) Increasing production in the
Australasia region to 659,000
ounces (2010: 620,000 ounces)
(cid:2)(cid:3) Maintaining production at South
Deep in South Africa at 273,000
ounces (2010: 274,000 ounces)
Increased production outside of
the South Africa region has further
advanced Gold Fields status as
a truly global company. In 2011,
the output ratio with respect to our
non-South African and South African
operations was 51:49 (2010: 47:53),
moving us closer to our targeted
60:40 production ratio.
Looking to the future, our Goal of
having 5 million quality ounces in
development or production by 2015
relies on:
(cid:2)(cid:3) Broadly stable production
at our mature KDC and
Beatrix underground mines
in South Africa
(cid:2)(cid:3) Completion of our South Deep
project, which aims to achieve
an annual production run rate of
approximately 700,000 ounces by
end-2015
(cid:2)(cid:3) Development of near-mine
organic growth opportunities in
our Australasia, South America
and West Africa regions
(cid:2)(cid:3) A strong growth pipeline headed
by four advanced stage projects
that are expected to reach
development decisions within the
next 12 to 36 months (p112-118)
Production growth and
diversification are not ends in
themselves, however. We must also
continue to deliver value. In 2011,
this was reflected in a range of
measures, including:
(cid:2)(cid:3) Notional Cash Expenditure (NCE)
margin, which rose strongly to
25% (2010: 16%)
(cid:2)(cid:3) Ounces produced per share,
which dropped marginally
to 0.0048 ounces (2010:
0.0049 ounces)
Our performance took place in
a context of substantial and
ongoing investment in the
construction and development of
our South Deep mine.
Finally, our production growth
– and value creation – must be
sustainable. Whatever we do
now must not compromise our
long-term performance, but must
instead support the delivery of our
Group strategy.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
47
Optimising our operations
u
r
e
P
,
a
n
o
r
o
C
o
r
r
e
C
3.1.1 Group operational performance
Figure 3.1: Attributable gold
production (’000oz)
Figure 3.2: Total cash cost
(US$/oz)
Figure 3.3: NCE margin (%)
5,000
4,000
3,000
2,000
1,000
0
4
3
9
,
3
2
8
5
,
3
7
9
4
,
3
5
8
4
,
3
9
2
3
,
3
2007 2008 2009 2010 2011
1,000
800
600
400
200
0
5
9
7
3
0
7
6
2
5
0
4
5
3
2
4
2007 2008 2009 2010 2011
30
20
10
0
5
2
0
2
6
1
1
1
8
2007 2008 2009 2010 2011
Figure 3.4: Group operational performance
Key operating statistics
2011
2010
2009
2008
2007
Gold produced – attributable (kg)
Gold produced – attributable (‘000oz)
Total cash cost (R/kg)
Total cash cost (US$/oz)
Notional Cash Expenditure (R/kg)
Notional Cash Expenditure (US$/oz)
Gold price (R/kg)
Gold price (US$/oz)
Operating profit (Rm)
Operating costs (Rm)
Operating margin (%)
NCE margin (%)
1 Restatement – previously reported as 17%
108,408
3,485
184,515
795
272,224
1,173
364,216
1,569
21,112
21,312
50
25
108,802
3,497
165,526
703
239,796
1,019
287,150
1,220
14,469
20,082
42
161
111,421
3,582
146,456
540
103,541
3,329
138,665
526
122,367
3,934
95,846
423
210,215
210,827
139,796
776
800
618
261,517
228,160
157,275
965
13,589
18,368
43
20
865
9,427
16,026
37
8
695
7,568
12,947
37
11
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
48
Optimising our operations
3.2 Our approach to
operational excellence
3.2.1 X(cid:17)(cid:23)(cid:3)(cid:7)(cid:27)(cid:3)(cid:15)(cid:4)(cid:8)(cid:7)(cid:24)(cid:14)(cid:8)(cid:17)(cid:3)(cid:7)(cid:15)(cid:17)(cid:3)(cid:7)(cid:19)(cid:8)
through business re-engineering
Gold Fields has implemented
comprehensive Business Process
Re-engineering (BPR) programmes
in our Australasia, South Africa
and West Africa regions. BPR
involves the optimisation of our
mines’ organisational and cost
structures, infrastructure footprint
and production processes – from the
stope to the mill, with the ultimate aim
of achieving an NCE margin of 20%
at each mine in the short-term and
25% in the medium to long-term. This
has entailed a focus on operating
costs, the rationalisation
of mine and regional overhead
cost structures and a review of the
mine-to-mill process.
Australasia
In 2011, we continued to implement
a number of actions to help drive
down costs and improve production
efficiency. Efforts included:
(cid:2)(cid:3) Transition to owner-operation
at both of our Australian mines
(underground only at St Ives)
(cid:2)(cid:3) The rehabilitation and upgrading
of our heap leach processing
infrastructure to de-risk our future
production profile
(cid:2)(cid:3) The introduction of improved
short-term interval controls on
haulage to increase levels of ore
trucked from underground and
surface open pits
a
n
a
h
G
,
g
n
a
m
a
D
Figure 3.5: Total cash cost
(US$/oz) – Australasia region
Figure 3.6: Total cash cost
(US$/oz) – South Africa region
1,000
5
1
8
8
6
9
8
3
8
1,000
800
600
8
4
5
3
5
7
9
2
7
9
6
6
400
200
0
2007 2008 2009 2010 2011
(cid:2)(cid:3) Enhanced management of mill
feed and heap leach mixes
(cid:2)(cid:3) Mine optimisation analysis to
inform enhanced mine and
equipment scheduling
South Africa
The nature of our mature, deep
underground mining operations
in South Africa means BPR has a
particularly important role to play in
protecting and improving our NCE
margin in the region. Key initiatives
include the following
Shaft Full Potential programme
This is aimed at improving quality
mining volumes by increasing face
advance by 5% to 10% each year
– and to deliver the full potential of
every available workface.
800
600
400
200
0
9
6
5
9
1
5
1
2
4
2007 2008 2009 2010 2011
It is built around three key strategies:
(cid:2)(cid:3) Processes and systems to
manage safe production
(including behavioural-based
interventions (p57-59))
(cid:2)(cid:3) Enhanced labour management
to optimise the availability
of in-stope crews (including
appropriate mixes of skills)
(cid:2)(cid:3) Training and procedures to
improve the effectiveness of
rock breaking (including
improved advance per blast,
better fragmentation and
reduced dilution)
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Developing Full Potential programme
This technology-based initiative,
which aims to mechanise all flat-end
development at KDC and Beatrix,
has largely been implemented
and will be embedded this year to
achieve increased development.
By doing so, we expect to improve
safety, reduce development costs
and deliver greater flexibility. During
2011, mechanised development
accounted for 89% of flat-end
development meters at KDC and
Beatrix. Mechanised development
has significantly improved our safety
performance, but has not yet yielded
the expected benefits in terms of
increased development.
These savings have been
achieved without any compulsory
redundancies and without
compromising our operational
sustainability.
West Africa
BPR continues to play an important
role at both Damang and Tarkwa,
due to a number of cost challenges.
These include a hardening fiscal
environment (p155-156), rising waste
stripping costs and increased
hard ore production.
Figure 3.7: Total cash cost
(US$/oz) – West Africa region
NCE Full Potential programme
The second phase of this initiative
(previously known as Project 3M)
was implemented in 2011. This
builds on what has already been
achieved during the first phase in
2010 – including the combining of
the Kloof and Driefontein operations
into KDC. Following the reduction
in operating cost of R840 million
delivered in 2011, the second phase
aims to reduce costs at our mature
KDC and Beatrix mines by a further
R500 million (US$63 million) over the
next two years – and improve our
ability to absorb rising input costs.
1,000
800
600
400
200
0
4
9
5
0
9
5
6
2
5
2
2
5
4
0
4
2007 2008 2009 2010 2011
49
Optimising our operations
In 2011, we undertook a range of
initiatives to address these issues.
These include:
(cid:2)(cid:3) Further advancement towards
full owner-operation with the
implementation of owner
maintenance of heavy mining
equipment to complement the
owner mining status
(cid:2)(cid:3) The commissioning of three new
tertiary crushers to optimise our
throughput at the Heap Leach
facility
(cid:2)(cid:3) Improved utilisation and
availability of our mining
equipment, including new
shift patterns
(cid:2)(cid:3) Optimisation of our mining
fleet and reductions in
fuel consumption
(cid:2)(cid:3) The application of improved
drilling and blasting techniques
(cid:2)(cid:3) The renegotiation of major
supply contracts
Together, these initiatives achieved
savings and baseline improvements
of more than US$40 million over the
course of 2011. This did much to
counter rising input costs.
During 2011, we took a range
of measures under this
programme, including:
(cid:2)(cid:3) Ongoing consolidation – and
leveraging – of the KDC
organisational merger
(cid:2)(cid:3) Footprint reduction and
optimisation, including
both surface and
underground infrastructure
(cid:2)(cid:3) Initiatives to enhance crew
productivity and accelerating
off- and on-reef development
(cid:2)(cid:3) Continued reductions in
employee numbers through
natural attrition and voluntary
separation (p128)
(cid:2)(cid:3) Enhanced supply
chain management
(cid:2)(cid:3) Energy efficiency initiatives
(p50-51)
a
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l
a
r
t
s
u
A
,
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e
n
g
A
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
50
Optimising our operations
Improving energy
3.2.2
(cid:7)(cid:24)(cid:14)(cid:17)(cid:3)(cid:7)(cid:15)(cid:17)’(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:7)(cid:15)(cid:7)(cid:6)(cid:4)’(cid:8)(cid:19)(cid:7)(cid:17)(cid:5)(cid:6)(cid:3)(cid:20)’(cid:8)
Rising energy costs and increased
international emphasis on carbon
management prompted us to task
each of our regions to reduce their
electricity consumption over the
course of 2011. This was with the
aim of reducing energy costs and
improving energy security – without
compromising production. This has
the added benefit of reducing our
carbon emissions; an increasingly
important issue in the light of
growing efforts to tax emissions or
introduce cap and trade schemes
(p68). It is in this context that we are
developing a fully integrated Carbon
and Energy Management Strategy
for the Group (p66-67).
Given the increased depth of mining
and lower grades, especially in
South Africa, our efforts have been
focused on limiting the rise in energy
intensity at our operations. In South
Africa electricity consumption fell
by 3% in 2011, while the average
energy consumption at our
Australian mines was down by 5%.
Australasia region
In the Australasia region, relevant
initiatives included:
(cid:2)(cid:3) The upgrading of Agnew’s entire
ventilation system, using more
energy efficient technologies
(cid:2)(cid:3) Installing high efficiency and
renewable energy lighting
(cid:2)(cid:3) Ongoing piloting of efficiency-
improving fuel additives at St
Ives, as well as rationalisation of
the mine’s truck fleet
(cid:2)(cid:3) Investigating pre-heating water
for the elution circuit to reduce
Liquefied Petroleum Gas (LPG)
consumption and increase
recovery at St Ives
Figure 3.8: Group direct and indirect energy consumption (terajoules)
Energy consumption
2011
2010
2009
2008
Direct
Indirect
Total
6,081
19,691
25,772
5,529
20,089
25,618
5,239
19,676
24,915
5,224
18,669
23,893
South Africa region
Electricity accounts for 95% of
our energy consumption in the
South Africa region. Plans by
public energy utility Eskom to
significantly raise electricity prices
over the next three years – as well
as concerns around security of
supply – makes reducing electricity
consumption a priority. Indeed,
the nature of our mature, deep-
underground mines means this is
an essential component in the
South Africa region’s long-term
operational sustainability.
It is in this context that our BPR
programme in South Africa
is targeting reduced energy
consumption of around 5% in 2012.
This will build on a 17% reduction
in electricity consumption already
achieved between 2007 and 2011.
Although this will not fully negate the
impact of Eskom’s price increases,
it will reduce the risk of production
losses as a consequence of higher
pay-limits.
Relevant initiatives included:
(cid:2)(cid:3) Introducing enhanced systems
for compressor management to
improve efficiency and reduce
operational time in line with
requirements for compressed air
(cid:2)(cid:3) Optimisation of our pumping
using automated monitoring
systems to control efficiency,
maintenance and replacement
(cid:2)(cid:3) Optimisation of our surface
refrigeration plant through the
use of an energy management
control system
Australia’s Energy Efficiency
Opportunities Act 2007
requires that both mines report to the
Department of Resources, Energy
and Tourism. Their submissions
list a number of energy efficiency
opportunities, including:
(cid:2)(cid:3) Achieving a possible 30% saving
on air-conditioning running costs
through the replacement of all
hydrofluorocarbon refrigerants
(cid:2)(cid:3) Initiation of the in-pit tailing
storage facility at St Ives,
considerably reducing
electricity costs
(cid:2)(cid:3) Rolling-out energy mass balance
tools to accurately measure
energy usage and waste in
mining and processing facilities
Both of our mines in Australia face
strategic challenges around energy
costs and supply. With our current
electricity supply contract with BHP
Billiton due to expire in 2014, the
nature of the Western Australian
gas market means alternative
arrangements are likely to entail
significantly higher prices. During
2011 we completed a feasibility
study examining the different energy
supply options available to us –
including contract renewal, potential
self-generation and the development
of a large scale wind-energy project
on Lake Lefroy at St Ives (p68).
Negotiations with BHP Billiton are
ongoing and will help determine the
final outcome.
Future increases in energy prices
could have a significant impact
on the economics of our mines.
In particular, higher electricity
prices may increase our focus
on production from open pit and
shallow underground sources, which
are less dependent on electricity for
ventilation, pumping and drilling.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
51
Optimising our operations
Our energy strategy continues
to be informed by the ongoing
identification of large ore bodies
at Damang, which is expected to
significantly expand its life of mine
from 2018 until 2024 (p114-115).
We are examining, for example, the
potential for generation from waste
gas, supplied by independent power
producers. In addition, we are also
in the process of developing future
renewable energy sources, with a
focus on biomass and solar energy.
During 2011, our West African
operations, which consume around
100 million liters of diesel each
year, also faced a 25% increase
in fuel costs. As a result, energy
efficiency efforts were primarily
focused on their respective truck
fleets – including enhanced
maintenance, utilisation of high
quality fuel and the installation of
more efficient fuel filters.
www.ecgonline.info
www.vra.com
Investing in
3.2.3
(cid:7)(cid:24)(cid:14)(cid:17)(cid:3)(cid:7)(cid:15)(cid:20)(cid:8)(cid:13)(cid:6)(cid:12)(cid:17)(cid:7)(cid:19)(cid:19)(cid:3)(cid:15)(cid:4)
We are making constant efforts
to improve the efficiency of our
conventional processing circuits
– in terms of cost, reliability and
recovery. During 2011, this included:
(cid:2)(cid:3) The commissioning of three new
tertiary crushers at our North
Heap Leach Facility at Tarkwa to
improve recovery rates in the face
of harder ore feed blend
(cid:2)(cid:3) The ‘bedding-down’ of our new
High Pressure Grinding Rollers
(HPGRs) at Tarkwa
In addition, we are planning to install
a secondary crusher at Tarkwa’s
CIL plant in early 2012 to mitigate
the impact of an increase in ore
hardness with pit depth.
In addition, we are investigating
opportunities for the development of
‘compressed air-less’ mines, using
hydraulics and electricity to power
drilling and other activities (thus
avoiding the significant latent power
wastage of pneumatic systems).
Plans are also being finalised for
the implementation of an ice-based
underground cooling system at KDC
to reduce pumping demands. The
higher cooling potential of the ice
means much less water needs to be
pumped back to surface. In addition,
solid ice is less prone to warming
than water as it gains kinetic energy
during its descent (i.e. the Joule
Thompson effect). Application of this
technology is expected to achieve
average savings of up to 10MW per
year. Plans are also in place for its
application at South Deep by 2015.
We are continuing to work with
Eskom in the pursuit of further
energy efficiency and energy
security measures. These are being
financed with the help of around
R200 million (US$28 million) from
Eskom’s Demand Side Management
(DSM) programme. This includes,
for example, high-efficiency auxiliary
fans at KDC to replace our existing
45kW auxiliary fans. Following a
pilot, we have placed an order for
1,000 units, which have been shown
to use 30% less electricity than the
existing fans. These will be fitted
at KDC, South Deep and Beatrix.
Collectively they are expected to
save 13MW per year.
Our engagement with Eskom on
wider issues, such as the security
of supply and tariffs for the mining
industry, is conducted through the
Energy Intensive Users Group and
the South African Chamber
of Mines.
The safety implications of a potential
cut in power at our operations
means Eskom will only apply a
modest curtailment of supply to our
operations during load-shedding,
instead of a total suspension.
This means the worst electricity
security risk we face is a 20%
reduction in supply for the duration
of an Eskom supply shortage,
rather than a full shutdown.
www.eiug.org.za
www.eskomidm.co.za
West Africa region
Our West African operations
also took steps to address their
electricity costs, which rose by 54%
during 2011. This was partly due
to rising demand within the wider
Ghanaian economy, a reduction in
the availability of hydro-generated
electricity to deregulated mining
companies and increased reliance
on costlier thermal-generated power.
During 2011, we negotiated – both
bilaterally and through the Chamber
of Mines – with the Electricity
Company of Ghana (ECG) and
the Volta River Authority (VRA)
over future supply options and
tariff structures.
Damang experienced a number
of power supply interruptions in
2011, due to weak local power
infrastructure and severe weather
events. As a result, the mine has
on occasion been required to
rely on its on-site diesel back-up
generators, resulting in an average
loss of production of 1,000 ounces
a quarter. The ECG has provided
assurances as to the reliability of
our future supply and we are
enhancing our power generation
capacity to mitigate the impacts of
any future outages.
Case study
Pioneering energy-efficient fan
technology in South Africa
Find out more online
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
52
Optimising our operations
a
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Externally-developed
processing technology
We are also applying externally-
developed processing technology
to both enhance our long-term
production at KDC, and to improve
potential recovery rates at our
Arctic Platinum Project (APP) in
Finland (p112-113).
At KDC, we commissioned
the innovative Gold Recovery
Opportunities from Waste Treatment
Holistically (GROWTH) Project. This
uses the transportable ‘Python’
gravity concentration plant to
process low-grade surface rock
dumps. Together with automated
Optical Ore Sorting of the reef
fraction, this significantly enhances
the gold grade – at relatively low
cost. As part of our Long-Term
Processing Strategy for South Africa
(LTPSSA), we are installing an
additional Python plant, which will
free-up one of our existing surface
plants (DP3) to process lower-grade
historic tailings instead of waste rock.
The ultimate aim of the LTPSSA
is to expand our Python capacity
to the point where the remaining
two plants that process waste rock
dumps (DP2 and KP1) instead
reprocess tailings, which will be
re-deposited at our Centralised
Tailings Storage Facility (p64-65).
This is expected to de-risk our
future production profile and reduce
the rate of production decline,
minimise costs and assist with the
minimisation of our final closure
liabilities. Beyond this, we are
looking at the potential installation
of Python plants underground to
further reduce processing costs.
At APP, we have been piloting the
application of Platsol® processing
technology to improve metal recovery
during hydrometallurgical processing
of concentrates produced from
conventional floatation.
The results of the bulk-level
pilot have confirmed significant
improvements to overall recovery of
20% – which has had a significant
impact in terms of the potential
feasibility of this otherwise relatively
marginal project.
What is Platsol®?
Platsol is a patented
technology developed to
process platinum group
metal sulphide floatation
concentrates. It leaches base
and precious metals in a
single process using oxygen
in sulphate media under total
oxidation conditions. It keeps
platinum group metals in
solution, whilst rejecting
base metals.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Case study
The GROWTH project: Unlocking value
from waste rock
High gold prices have presented Gold Fields with new opportunities to
unlock value from the gold reserves in low-grade surface rock dumps
(SRDs) at its KDC mine in South Africa. During 2011, Gold Fields
launched the Gold Recovery Opportunities from Waste Treatment
Holistically (GROWTH) project to provide a cost effective and energy
efficient method for processing these reserves. The GROWTH
project uses a fully mobile, modular unit known as the ‘Python’ gravity
concentration plant. One of these plants has been installed at KDC
East and during 2011 processed about 140,000 tonnes of waste rock
per month, producing a monthly average of 56kg of gold. A proposed
plant upgrade will see the plant processing around 153,000 tonnes of
waste rock and producing around 92kg of gold a month.
Two additional Python plants are scheduled for installation at KDC
in 2012 to support Gold Fields Long-Term Processing Strategy
for South Africa (LTPSSA). This will free up one of KDC’s existing
surface plants to retreat historic tailings, which are more suited to
conventional processing methods. The ultimate aim of the LTPSSA
is to expand Python capacity to the point where the remaining two
plants that currently process waste rock dumps reprocess existing
tailings instead. Once full Python capacity has been installed, these
reprocessed tailings will be re-deposited at Gold Fields proposed
Centralised Tailings Storage Facility (CTSF) near South Deep’s existing
Doornpoort TSF (p64-65). In addition to bringing forward extra ounces
at reduced cost, the LTPSSA will also minimise final closure liabilities
by transferring tailings from dolomitic land (i.e. the location of some
of Gold Fields current and historical TSFs) onto competent geological
sub-strata (i.e. the location of the CTSF).
Gold Fields has approximately 15 million tonnes of SRDs at KDC,
which will take about three years to process, though a programme
is underway to verify volumes of other waste rock dumps that could
add to the total available for processing. Beyond this, Gold Fields is
investigating the potential installation of Python plants underground.
This would remove the substantial costs associated with transporting
waste rock to surface. It would also allow for processed waste rock
and tailings to be used underground as backfill, reducing wastage
and minimising Gold Fields surface footprint.
In January 2012, Gold Fields and Gold One International announced
that they have entered into a Memorandum of Understanding to
investigate the viability of concurrently reprocessing their combined
surface tailings deposits, located on South Africa’s West Rand (p65).
53
Optimising our operations
Proprietary processing
technology
Gold Fields has two proprietary
processing technologies that have
the potential to significantly improve
processing efficiency and recovery
rates – both for the company and for
the wider sector:
(cid:2)(cid:3) ASTERTM is a biologically-based
process, which removes cyanide
and thiocyanate from residue
streams after the leaching
process. This offers important
benefits in terms of environmental
stewardship, water management,
efficiency and safety (63-66).
We are examining its potential
application in both Ghana
and Peru
(cid:2)(cid:3) BIOX® is a process used to pre-
treat refractory sulphide gold
ores to increase gold recovery
rates. There are a total of 10
gold processing plants using
the technology under licence in
South Africa, Ghana, Peru, China,
Kazakhstan, Uzbekistan and
Australia. Although not currently
in use at our own operations due
to the nature of our ore bodies,
we are investigating its potential
application at Cerro Corona and
Chucapaca in Peru
www.gekkos.com
Case study
Enhanced cyanide
management through ASTERTM
process technology
Find out more online
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
54
Optimising our operations
Case study
BIOX® process technology: Creating
commercial opportunities from refractory ore
High gold prices and globally depleting levels of oxide ore mean that
harder-to-process refractory ore bodies are playing an increasingly
important role in global gold production. This dynamic is creating
new opportunities for the commercial application of BIOX®. This
proprietary Gold Fields technology is licenced to third-parties for the
pre-treatment of refractory sulphide gold ores, prior to conventional
cyanide leaching.
Refractory ores are naturally resistant to standard recovery
methods, as the gold is ‘locked’ within sulphide minerals that inhibit
leaching. BIOX® uses naturally occurring bacteria to destroy these
sulphide minerals and expose the gold for subsequent cyanidation.
Recovery rates for refractory ore typically run at less than 70%.
After treatment with BIOX®, however, recovery rates can be as high
as 97% – depending on ore characteristics. In addition, the limited
environmental impact of BIOX® makes it fully compliant with ever
stricter environmental standards around the world.
There are currently 10 BIOX® processing plants in operation in seven
countries worldwide, with additional opportunities being explored in
the Philippines, Colombia and China – amongst others. Gold Fields
portfolio does not currently contain any refractory ore bodies, but
opportunities are being explored for the application of BIOX® to
recover residual gold in low grade pyrite at its Cerro Corona mine
in Peru.
Development of Generation 4 of BIOX® is ongoing and focuses
on improving the energy efficiency of the process, enhancing the
durability of the tank agitation and bacterial consortium, and achieving
a 15% reduction in capital and operating costs. The full roll-out of
Generation 4 is scheduled for 2014, whilst many of the planned
improvements will be incorporated into Generation 3 of BIOX® within
the next two years.
www.goldfields.co.za
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
,
p
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This aims to disseminate
technological innovation across the
Group and to improve the take-up and
transfer of off-the-shelf technologies.
It also aims to develop new
technologies, where relevant, and to
build collaborative partnerships with
third parties to accelerate technology
development and implementation.
GTS is also represented on the
Capital Projects Steering Committee
to support the successful execution of
our major growth projects (p112-118).
Innovative mine development at
South Deep
The scale, depth and positioning
of the South Deep ore body raises
a number of unique technological
challenges. Successful development
of this mine will underpin the long-
term commercial sustainability of
our South Africa region – and will
take production beyond 2050. As a
result, we have made considerable
investments to meet these
challenges. These include:
(cid:2)(cid:3) The application of fully
mechanised, deep underground
mining, which has significantly
improved productivity and
reduced employee exposure to
fall-of-ground and heat
(cid:2)(cid:3) Accelerated implementation
of the horizontal de-stress cut
methodology is speeding up the
rate at which we can open up
the ore body. This mitigates risks
associated with the geotechnical
stress regime and will improve
future production volumes
(cid:2)(cid:3) Establishment of a specialised,
on-site training facility, using
advanced training packages
and electronic simulators to
produce a cadre of world-class
underground mechanised
miners. This is expected to be
commissioned in early 2012
(cid:2)(cid:3) The maximisation of existing
hoisting capacity through the
refurbishment and conversion of
the linked South Shaft complex
3.2.4 Pursuing innovative
and high quality mining
Driving Group-wide best practice
In 2011, we completed a significant
reorganisation that resulted in the
creation of the Group Technical
Services (GTS) function. GTS enjoys
a well-resourced team covering
the core technical disciplines of
Mineral Resource Management,
Engineering, Mining, Geotechnical,
Metallurgy, Energy and Carbon
Management, and Technology and
Innovation. It is specifically intended
to work with our operations and
regional technical functions to:
(cid:2)(cid:3) Ensure appropriate strategic
focus for the technical disciplines
(cid:2)(cid:3) Provide thought-leadership and
technical support to the regions
(cid:2)(cid:3) Manage Group risks through
technical reviews
(cid:2)(cid:3) Promote best technical practice
(cid:2)(cid:3) Enhance technical
talent management
(cid:2)(cid:3) Prioritise technology
implementation and innovation
GTS is expected to play a key role
in driving us towards our Goal of
5 million ounces in production
or development by 2015 and in
supporting the execution of our
international growth projects
(p112-118).
During 2011, GTS carried out
technical reviews of our 2012
operational and life of mine plans
to ensure that our long-term plans
and the resulting strategic initiatives
have both rigour and integrity. GTS
is also examining opportunities
for the adoption of Group-wide
mine management, planning and
reporting software. This will help
ensure that each of our regions
operates as part of a cohesive
global group by driving flexibility
between operations, enhanced
movement of personnel and more
homogeneous decision-making.
As part of this reorganisation, we also
established a Group Technology and
Innovation Steering Committee, with
representation from all of the regions
and capital growth projects.
55
Optimising our operations
Once complete, South Deep
will represent the first of a new
generation of sustainable, deep
underground mines in South Africa
and will constitute the foundation
for the region’s long-term role in our
production portfolio.
Case study
South Deep installs award
winning steel headgear
Find out more online
Remote mechanised mining
in Australia
Mechanised underground mining is
already well established at Agnew
and St Ives. We are now moving
towards the next phase of innovation,
which is mine automation.
Agnew is already piloting the use
of an automated loader (controlled
by a surface operator), as well as
an automated drill-rig. At St Ives,
we are laying the ground for the
implementation of this technology,
including examination of the
potential for remote-bogging, which
would allow for the quick clearance
of post-blasting areas and make
productive use of shift handovers.
The rolling out of automation
technology – which has the potential
to allow employees to carry out their
work in remote locations – would
mark a major step-change and is
likely to require significant time and
investment. Nonetheless, it has the
potential to significantly reduce
the safety hazard exposure of our
employees, minimise handover times
and enhance productivity. It also has
the potential – for example through
remote operation from Perth – to
transform labour dynamics, which
are currently dominated by the
short-term physical movement of
workers via the highly competitive
‘fly-in, fly-out’ Western Australian
labour market (p130-131).
We have already installed the
necessary fibre optic technology
and bandwidth at Agnew as a first
step in this direction – and plan to
implement a regional automation
programme in 2012.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
56
Optimising our operations
3.3 The Gold Fields
safety promise
Our promise that “if we cannot mine
safely, we will not mine” reflects our
prioritisation of employee safety and
wellbeing. This is primarily driven
by our moral imperative to protect
those who work for us – as well as
the need to protect our reputation
and avoid operational disruption.
Our approach is based on the
pursuit of ‘Zero Harm’ and is driven
by our determination to prove that
deep underground gold mining
can – when properly managed – be
carried out safely.
We will choose to leave gold in
the ground rather than putting our
employees at risk. Over the last
three years we have written-off
about 2 million ounces of high-
grade reserves due to safety
concerns. We are confident that this
is both the right thing to do – and
will pay longer-term reputational and
operational returns.
The challenge is both significant
and ongoing. During 2011, there
were a total of 20 workplace
fatalities at Gold Fields – 19 of
which took place in South Africa.
Regretfully, this marked a regression
on 2010, during which we had
18 fatalities. This has given fresh
impetus to our efforts to eradicate
fatality risks in our operations – and
highlights the need for constant and
proactive vigilance. Our approach
has shown some encouraging
results, as only two of these 20
fatalities occurred in the final five
months of 2011. Despite the short-
term regression during 2011, our
longer-term trend continues to be
downwards – with an average 9%
decline a year in fatalities since
2008. We are committed to further
improving this trend.
Figure 3.9: Group safety performance
Group
Fatalities
Lost Time Injury Frequency Rate
Fatal Injury Frequency Rate
Medically-Treated Injury Frequency Rate
3.3.1 Safety
performance in 2011
We set ourselves a target of
reducing all our safety indicators
(i.e. FIFR2, MTIFR3 and LTIFR4) by
25% in South Africa during 2011–
and by 20% in our Australasian,
South American and West African
regions. Though our long-term
safety performance is showing
improvement, our performance in
2011 has been mixed:
(cid:2)(cid:3) In South Africa, LTIFR rose by
10%, MTIFR fell by 17% and FIFR
increased by 14%
(cid:2)(cid:3) In Australasia, LTIFR fell by 31%,
MTIFR fell by 53% and FIFR
remained at zero
(cid:2)(cid:3) In South America, LTIFR
increased from 0.00 to 0.18,
MTIFR fell by 41% and FIFR
remained at zero
(cid:2)(cid:3) In West Africa, LTIFR fell by 57%,
MTIFR fell by 41% and FIFR
remained at 0.04
3.3.2 Safety management
Although safety remains a priority
in all of our regions, the higher risks
posed by our more labour intensive,
deep underground operations
means we place particular focus
on safety management in South
Africa. The South Africa region
accounted for 95% of fatalities in
2011 (2010: 94%). Of these, fall of
ground incidents – whether resulting
from gravity or seismic activity –
accounted for 63% (2010: 53%).
Our operations in South Africa
are supported by a range of
safety management measures
that fall under our Safe Production
Management Programme (SPMP).
2011
20101
20091
2008
20
4.69
0.12
5.68
18
4.39
0.11
7.16
26
3.91
0.16
8.91
31
5.34
0.16
13.50
Figure 3.10: Group LTIFR, FIFR
and MTIFR performance
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
LTIFR
FIFR
MTIFR
13.50
8.91
7.16
5.34
4.39
3.91
5.68
4.69
0.16
0.16
0.11
0.12
2008
2009
2010
2011
Figure 3.11: LTIFR by region5
2008
2009
2010
2011
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0
8
4
.
6
0
8
.
65
2
.
3 5
7
.
4
7
0
.
4
2
8
.
2
5
8
.
1
6
7
.
1
1
2
.
0
2
3
.
0
0
0
.
0
8
1
.
0
7
2
.
0
4
1
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0
9
4
.
0
1
2
.
0
Australasia S. Africa S. America W. Africa
1 Restatement – figures for 2009 and 2010
previously reported as 3.81 and 4.38
respectively. FIFR for 2009 previously
reported as 0.14. MTIFR for 2009 and
2010 previously reported as 8.91 and 7.09
respectively. Please see p4 for explanation
2 Fatal Injury Frequency Rate
3 Medically-Treated Injury Frequency Rate
4 Lost Time Injury Frequency Rate
5 Restatement – 2009 and 2010 figures for
Australasia previously reported as 1.18 and
4.08 respectively; 2009 figure for South Africa
previously reported as 4.54; 2009 figure
for South America previously reported as
0.00; 2010 figure for West Africa
previously reported as 0.44. Please see
p4 for explanation
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
57
Optimising our operations
What are the impacts of a
mine-wide safety stoppage?
Mine-wide safety stoppages
are imposed in the event of
a fatality under Section 54 of
South Africa’s Mine Health
and Safety Amendment Act
2008. This allows time for the
investigation of the relevant
incident. In addition, it acts
as an administrative incentive
to avoid fatalities due to the
loss of production incurred
during such a stoppage. It
is estimated, for example,
that each stoppage halts
production for two days and
it can take up to a week to
restore full production.
What is the OHSAS
18001 standard?
OHSAS 18001 is an
internationally-recognised
standard that guarantees an
organisation has implemented
an occupational health and
safety management system.
This must incorporate a
number of elements including,
amongst other things:
(cid:2)(cid:3) Risk assessment
(cid:2)(cid:3) Definition of health and
safety policy
(cid:2)(cid:3) Implementation of a safety
management system
(including indicators)
(cid:2)(cid:3) Technical and
regulatory assessments
(cid:2)(cid:3) Training
(cid:2)(cid:3) Establishment of a health
and safety committee
(cid:2)(cid:3) Internal auditing
(cid:2)(cid:3) Certification is subject to
third-party auditing
The SPMP aims to:
(cid:2)(cid:3) Achieve a safe mining culture that
is in total compliance with our
safety standards and procedures
– including our Group-wide Safe
Production Rules
(cid:2)(cid:3) Create a safe mining environment
by engineering-out safety risks
(cid:2)(cid:3) Improve the safety performance
of employees through our
wellbeing programmes
As part of the SPMP, our high-
level Safety and Health Production
Management Task Team
monitors safety management and
performance. The Task Team includes
two members of our executive
committee and is chaired by the
Executive Vice President of the South
Africa region. The Group CEO also
attends the quarterly SPMP meetings.
A particular focus of our efforts is
the mitigation of fall-of-ground and
seismic-related incidents through
initiatives such as centralised-
blasting, pre-conditioning, selective
cessation of night-shifts and
continuous improvement and
innovation in seismic monitoring.
Despite these efforts, as well as
closer cooperation with the Mining
Inspectorate of the DMR, in 2011
we experienced a total of 75 safety
stoppages in South Africa, some of
them self-imposed. It is estimated
that this resulted in the loss of
around 52,500 ounces of production
– highlighting the close relationship
between strong safety management
and continuity of production.
By comparison, the relative safety
risks posed by our Australasian,
South American and West African
operations are lower. This is due to:
(cid:2)(cid:3) Higher levels of mechanisation
and shallower depths at our
underground operations in
Australia, which reduces
employee exposure to fall
of ground
(cid:2)(cid:3) The reduced risks associated
with open pit mining in Ghana
and Peru, with vehicle accidents
and hand injuries accounting for
most safety incidents
Despite this, our contractor fatality
at Tarkwa demonstrates that
continued vigilance in these
regions remains essential.
All of our operations are certified
to the OHSAS 18001 international
safety management standard.
www.dmr.gov.za
www.bsigroup.com
3.3.3 Achieving a
safe mining culture
We are actively countering
perceptions around the ‘latent’
dangers of underground gold
mining through the promotion of
a ‘Safe Production Mentality’. This
is based on instilling the belief
amongst employees that mining can
– if approached in the right way –
be carried out without the need for
exposure to risks.
This is supported by our ongoing
enforcement of our Safe Production
Rules, as well as constant promotion
of our ‘Stop, Think, Fix, Verify and
Continue’ practice.
South Africa
In South Africa, the SPMP is
continuing to help transform
the safety mentality of our
employees through high quality,
two-way engagement. It is vital
that we collectively achieve this
transformation, as a significant
proportion of serious safety
incidents and fatalities continue to
result from risky behaviour, non-
compliance with standards or
inadequate supervision/ leadership
– rather than exogenous factors
such as fall of ground. In 2011,
for example, 37% of our fatalities
resulted from non-fall of ground
incidents (2010: 47%).
We are continuing to implement
a range of activities aimed at
cascading our Safe Production
philosophy throughout the
entire workforce.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
58
Optimising our operations
Relevant new initiatives introduced
in 2011 include:
(cid:2)(cid:3) Rolling out the practice of
removing crews, which are
experiencing safety problems,
from the workface for a day to
deliver high quality safety training
to all operations
(cid:2)(cid:3) The continued holding of
operation-level Indabas for two-
way safety discussions between
overseers, supervisors and crews
– as well as the development of
defined action plans
(cid:2)(cid:3) Implementation of a mine-wide
safety recognition programme to
actively reward safe behaviour
(cid:2)(cid:3) Implementation of a Supervisory
Skills and Leadership
Development programme to
address a number of skills gaps
identified through an internal
audit – including those relating to
safe production performance
(cid:2)(cid:3) Compliance interventions,
including implementation of a
Priority Safety Disciplinary Case
Procedure, increased inspection
and audit activity, as well as a
significant ramp-up in alcohol
and drug testing
We also continued a number of
similar, pre-existing behavioural-
based initiatives, such as:
(cid:2)(cid:3) Enhanced Safety Alarm
questionnaires to help crews
analyse actual safety incidents
(cid:2)(cid:3) A Behavioural Safety Programme
to encourage safety solidarity
between supervisors and crews
(cid:2)(cid:3) Monthly ‘Shaft Communications’
for operations and underground
managers to engage the
entire workforce
A consistent increase in ‘Stop
and Fix’ stoppages by employees
in South Africa (which average
1,000 per month) suggests these
measures are starting to take effect.
This illustrates the success of our
‘Stop, Think, Fix, Verify and Continue’
campaign, which is the practical
application of our most important
Value: 'If we cannot mine safely, we
will not mine'.
At Damang, we also continued to
embed our ‘safety referee’ system,
while consolidating our cross-
departmental Fatal Risks Drive. This
included the proactive management
of the 10 highest identified risks,
such as those relating to vehicle
accidents, fire and conveyor belts,
amongst others.
At Tarkwa, we maintained efforts
to encourage employees to
identify and address potential
hazards under our existing Near
Miss Hazard Reporting System.
In addition, weekly visits by the
management team focusing on
physical conditions and workforce
engagement have helped drive
down injury frequency rates on
the mine – with formal corrective
action reviews established where
relevant. The mine also implemented
a ‘Protect Your Hands’ campaign,
which has significantly reduced
related injuries, as well as a
dedicated Supervisors’ Safety
Training Course, which has been
attended by 403 employees.
In addition – and in light of the
single contractor fatality that took
place at the mine in 2011 – Tarkwa
placed particular focus on traffic
safety. This included:
(cid:2)(cid:3) Intensification of an ongoing
traffic safety campaign,
focused on regular road blocks,
speed-checks, breathalyser-
testing and driver training – as
well as the engagement of public
transport providers
(cid:2)(cid:3) Implementation of on-board
fatigue monitoring systems on
our trucks to reduce tiredness-
related accidents and improve
operator awareness
Australasia and West Africa
During 2011, we continued to
promote behavioural change in
our other regions. In Australia, for
example, this included the extension
of our updated, psychology-based
Zero Incident Process (ZIP) at St Ives
– as well as the ongoing application
of our three-year Going for Gold
programme to improve performance,
enhance safety management
systems and improve safety
management maturity. All working
areas are expected to achieve an
externally-audited top rating (i.e.
‘Gold’) by the end of 2014.
St Ives also progressed training
on the Incident Causal Analysis
Method, which is designed to de-
personalise root cause investigation
– and so help ensure the accuracy
of analysis. Work was also initiated
on a project to document physical
capabilities for individual roles.
This is to ensure that pre-
employment medical assessments
adequately investigate individuals’
capacity to do, without risk of injury,
the job for which they apply.
In Ghana, we took specific
measures to address the significant
transition of contractor personnel
into our workforce as a result of
our move towards owner-mining.
This included the participation of
97% of all of our employees in
an industrial theatre campaign to
help instil our Values – including
our focus on safety. This was
supplemented by the Yenshe Ase
Foforo (‘We Start Afresh’) initiative,
which was aimed at revisiting basic
workplace safety practices.
Damang implemented the ‘Walk
the Talk’ initiative, which promotes
direct interaction between the
mine general managers and the
workforce on a weekly basis.
Discussions focus on safety, costs
and production – including updates
on safety statistics and performance.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
59
Optimising our operations
These measures are in addition to
our existing efforts to ‘engineer-out’
health and safety risks, including:
(cid:2)(cid:3) The implementation of fully
mechanised production at South
Deep to improve production
performance and reduce employee
exposure to the safety risks posed
by this deep level mine
(cid:2)(cid:3) Implementation of ‘Project 31’ to
reduce workplace temperatures
to 31.0°C or less (32.5°C in
trackless operations)
(cid:2)(cid:3) Implementation of ‘Project 10’ to
reduce exhaust column leakage
to below 10% for conventional
development ends and below
20% for trackless operations
We have already achieved a
significant degree of compliance
against these measures. In addition,
our Seismic Task Team continues
to play a leading role in minimising
underground risks within our existing
operations, by pre-warning mining
teams of potential seismic-related
fall of ground and enhancing our
blasting scheduling and techniques
to minimise safety risks. The positive
impact of the Seismic Task Team
remains evident.
Although there was a short-term
increase in fatal seismic fall of
ground incidents from 0 in 2010
to 5 in 2011 – the overall trend
has nonetheless seen significant
improvement, falling by 16% since
the Seismic Task Team was formed
in 2008. This is reflected in our long-
term fatality trends and is making an
important contribution to our journey
towards Zero Harm.
Safety engagement
All of our employees receive
both general and role-specific
health and safety training during
induction. This is supported through
annual refresher training, risk-
specific training (where required)
and regular safety awareness
campaigns. Relevant safety
targets included in managers’
Individual Balanced Scorecards
determine approximately a third
of their variable bonuses and
incentives. This helps ensure that
our safety policies and guidelines
are ‘mainstreamed’ into everyday
thinking and practice.
A total of 97% of employees in
South Africa and 95% of employees
in Ghana are represented through
their unions at various levels on
joint health and safety committees
– and on a range of statutory and
voluntary engagement forums
between supervisors, line
managers and organised labour.
Our ability to promote safe
production is supported by
the active involvement of
our employee representative
organisations and unions, host
governments and regulators.
This includes the Department of
Mineral Resources (DMR) in South
Africa, which continues to provide
us with valuable guidance on
how to improve our safety
performance and meet their Mine
Health and Safety Council health
and safety milestones.
In February 2012 we held the
Gold Fields Tripartite Health and
Safety Summit, which involved our
CEO, the Department of Mineral
Resources and the President of the
National Union of Mineworkers.
www.dmr.gov.za
www.num.org.za
3.3.4 Creating a safe
mining environment
The ‘engineering out’ of safety
risks at our deep underground
mines in South Africa is a key
senior management priority – as
reflected by our comprehensive
system of reporting to the Safe
Production Management Task Team,
the Safety, Health and Sustainable
Development Committee and the
Board of Directors.
New actions taken in 2011 in South
Africa include:
(cid:2)(cid:3) Region wide implementation of
the Mining Industry Occupational
Safety and Health (MOSH) leading
practice for entry examination
(cid:2)(cid:3) Full roll out of safety nets during
the drilling shift to protect stope
face employees from fall of
ground hazards
(cid:2)(cid:3) Elimination of night shifts,
where the mining layout and
configuration could result in
elevated risk
(cid:2)(cid:3) The rolling out of roof bolting to
all stope panels, to supplement
the pre-existing safety netting.
Bolting has been completed at all
up dip panels and wide raises,
whilst bolting of all breast panels
is due for completion in early
2012. This is specifically aimed at
trying to prevent a resurgence in
fall of ground fatalities
(cid:2)(cid:3) Mechanisation of all of our flat-end
South African development tunnels
to improve productivity and reduce
employee risk exposure
(cid:2)(cid:3) Evaluation of auto-coupling and
guard communication systems
to reduce tramming-related
risks, as well as the initiation
of work to introduce proximity
warning systems
Figure 3.12: Fatalities from Fall of Ground (FOG) in the South Africa region
Calandar Year
2011
2010
2009
2008
2007
2006
FOG (Gravity) fatals
FOG (Seismic) fatals
Non-FOG fatals
Total fatals
7
5
7
19
9
0
8
17
3
10
13
26
3
11
17
31
4
6
26
36
17
5
12
34
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
60
Optimising our operations
All of our project feasibility
assessments include occupational
health risk management. Relevant
risks are addressed through
targeted design interventions to
ensure all infrastructure, equipment
and processes are safe before they
become operational.
At our new-generation South
Deep mine, for example, we are
‘building-in’ safety measures from
the start – particularly in relation
to the technically sophisticated
de-stress cut methodology. This
includes, for example, the installation
of yielding bolts in the de-stress
excavations, the preconditioning of
the de-stress faces and the use of
semi-automated drilling machines
for the installation of support in the
de-stress panels.
3.3.5 Recording and
analysing safety performance
We seek to continuously improve
the recording and analysis of our
safety performance through the
following means:
Holistic measurement of all
safety incidents
During 2011, we continued to
record Total Incident Frequency
Rates (TIFR) at St Ives, which
include a broad range of safety,
environmental and operational
measures. This a) delivers a
holistic, risk-based view of safety
performance; and b) reduces over-
reliance on Lost Time Injury (LTI)
reporting, which can discourage
employees and managers from
pursuing the early and effective
treatment of some injuries.
In addition, our Australasia
region removed Medical Treatment
Injury Frequency Rate (MTIFR) as
a performance metric in employees’
Individual Balanced Scorecards.
This is with the aim of encouraging
employees to seek early
medical attention.
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Integrated risk management
Incident Causal Analysis
St Ives has extended its use of
CURA Risk Management software
to integrate their operational risks.
This required the installation of a
new database, the modification of
their risk matrix, training for system
users and the incorporation of
risk management into individuals’
balanced score cards, in addition
to safety.
Both of our mines in Australia
continued to apply the Incident
Causal Analysis method. This
‘blame-free’ system helps identify
the root causes of safety incidents
to avoid repetition and promote
accident prevention.
Peer analysis
Our Cerro Corona mine participates
in monthly meetings with the
National Society of Mining,
Petroleum and Energy in Peru,
where we work with peers to analyse
serious safety incidents in the sector
and identify lessons learned.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
61
Optimising our operations
Figure 3.14: Group environmental performance
Group
2011
2010
2009
2008
Environmental incidents (Level 2 and 3)1
56
143
235
330
Water withdrawal (Ml)
Water quality (mS/m)2
Water discharge (Ml)2
78,236
76,326
72,403
75,950
77
71
42,482
48,080
n/a
n/a
366
n/a
n/a
304
Closure costs (provisions) (US$m)
440
443
CO2-e emissions (scope 1 and 2)
('000 tonnes)3
CO2-e emissions (scope 3)
('000 tonnes)3
5,298
5,350
5,507
5,212
792
782
458
n/a
Carbon intensity (tonnes CO2-e/oz)4
NO, SO and other emissions (tonnes)
Ozone depleting emissions5
1.43
5,358
n/a
1.39
5,871
n/a
1.41
5,379
n/a
1.49
5,528
n/a
Cyanide consumption (tonnes)
23,750
21,487
22,165
18,922
Mining waste ('000 tonnes)
189,409
193,577
167,569
103,856
Materials ('000 tonnes)
336
325
269
264
Implementing
3.4.2
environmental stewardship
throughout the mine lifecycle
We integrate proactive and
responsible environmental
management into every stage
of the mining lifecycle. By doing
so, we minimise our long-term
environmental liabilities and maintain
strong relations with our host
governments, local communities and
business partners.
From exploration to operation
All of our exploration projects
incorporate environmental risk
assessment and closure processes.
If exploration develops into
project implementation, we then
conduct a more extensive baseline
environmental study (to identify the
social and environmental status of
an area, as well as related risks).
Our projects are also subject to
environmental/social screening and
impact assessments, environmental
management programmes and
preliminary closure plans, depending
on how advanced they are.
What is the ISO 14001
standard?
ISO 14001 is an internationally
recognised standard that
sets out how to implement
an effective Environmental
Management System (EMS).
Its elements include:
(cid:2)(cid:3) General requirements
(cid:2)(cid:3) Environmental policy
(cid:2)(cid:3) Planning implementation
and operation
(cid:2)(cid:3) Checking and
corrective action
(cid:2)(cid:3) Management review
It is aimed at helping
organisations identify activities
that impact on the environment,
produce objectives for
improvement and establish
a management system to
achieve these objectives –
with ongoing monitoring for
continual improvement.
3.4 Respecting and
protecting the environment
Our Vision, Values and risk
management strategy – as well as
increasingly stringent environmental
regulation – means we remain
highly committed to the
continuous improvement of our
environmental performance.
A significant proportion of our efforts
are focused on the prevention of
post-closure Acid Mine Drainage
(AMD), the prevention of leaching
from our tailings and the minimisation
of our carbon emissions.
3.4.1 Managing the
environmental impact
of our operations
Our approach to managing the
environmental impacts of our
operations and exploration activities
is defined by our sustainable
development framework, as well
as the ISO 14001 international
environmental management
standard. In 2011, we spent a total
of US$54 million on environmental
management. All of our operations
are ISO 14001 certified.
Figure 3.13: Environmental
incidents (Levels 2 and 3)1
0
3
3
5
3
2
350
300
250
200
150
100
50
0
3
4
1
6
5
2008
2009
2010
2011
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1 There were no Level 4 or Level 5 environmental incidents in 2011
2 Data not available for 2008 and 2009
3 2010 figures restated in light of the Greenhouse Gas Protocol. Figures exclude fugitive mine
methane emissions and include Tech. Transm./Distrib. losses (excl. theft) with respect to electricity
4 Carbon intensity for 2008 to 2010 restated due to the revised basis of reporting with respect to
ounces produced
5 Although no data exists for ozone-depleting emissions by weight, this has not been identified as
a relevant/material issue under our ISO 14001-compliant Environmental Management Systems
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
62
Optimising our operations
Figure 3.15: Details of Level 3 environmental incidents (including spills)
Operation
Date
Description
Impact
Remedial action
KDC
9 February 2011
Possible subsidence and
ground movement
South Deep
6 June 2011
Damage to the gearbox
and bearing of the wheel
that drives the clarifier
bridge. This stopped
automatically stopped its
operation and no return
activated sludge was
recalculated
Cracks affecting two
houses and the pooling of
water in Letsasing Village.
Drilling and grouting
subsequently completed
Release of 6.6 million liters
of untreated sewage water
into the Leeuwspruit
KDC
17 June 2011
Suspected ingress of
external water into the 10
Shaft water system
Discolouration of fissure
water and the discharge of
water from 10 Shaft into the
bio-monitoring dam
South Deep
2 December 2011
Power failure at the sewage
works followed by a
reporting delay
Release of 4.7 million liters
of untreated sewage water
into the environment
KDC
6 December 2011
Progressive failure of all
tailings extraction pumps
(e.g. associated with
thickener transfer, CIP feed,
CIP residue, disposal,
George Dam, Brick Dam
and No. 9/10 spillage)
Overflow of tailings from
sumps and bunded areas
to the Brick Dam, which
also overflowed outside
the plant into the river and
nearby shops - resulting in
a spillage of 40 tonnes
Drilling and grouting
completed to ensure
ground stability
Daily monitoring,
the undertaking of a
toxicological study and
implementation of third
party audits. The issue was
reported to the National
Nuclear Regulator, the
Department of Mineral
Resources and the
Department of Water Affairs
Chorine dosage was
increased and chlorine
tablets were added to the
water to render it safe. The
issue was reported to the
Department of Water Affairs
Power was restored to the
sewage works and chlorine
tablets were used to help
disinfect the effluent
The plant was stopped to
prevent further spillage.
Samples were taken
and subject to analysis,
whilst a temporary dam
was constructed outside
the plant to contain the
spill and prevent further
impacts on the local river
and shops. The issues was
reported to the Department
of Water Affairs
Each of our operations is subject
to a tailored, ISO 14001-certified
Environmental Management
System (EMS).
These help us identify and manage
the impacts of our activities
and infrastructure, continuously
improve and monitor our
environmental performance and
generate data for our centralised
environmental database.
Closure and rehabilitation
Closure plans are in place at all of
our mines, with the majority already
being implemented – for example
through concurrent rehabilitation.
Our closure plans use ‘worst case
scenario’ budgeting based on
premature closure and excluding
potential scrap values. This ensures
that our financial provision for
the responsible closure of our
operations remains robust.
We have made provision in
our financial statements for
environmental rehabilitation costs
of R3.19 billion (US$442 million).
A dedicated trust fund to support
these provisions is currently valued
at R1.31 billion (US$181 million),
with the unfunded portion of these
costs to be financed over the life of
the operations.
Where we make significant changes
to our operations, we work with local
stakeholders to review and update
our closure plans. Our planning is
also subject to annual revision by
our regional and group management
teams, revision by third party
experts, as well as annual internal
and external audits
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
3.4.3 Using and discharging
water responsibly
Water management represents a
key risk in all of the regions in which
we operate. It also forms a key
component of each of our operations’
EMS – through which water use
and quality is assessed, managed,
monitored and reported on.
Water use and quality
In 2011, we withdrew 78,236 Ml
(2010: 76,326 Ml) and discharged
42,482 Ml (2010: 48,080 Ml).
The average quality of water
discharged was 77 milli-siemens/
meter (mS/m) (2010: 71 mS/m).
Although this is within international
standards, we are working to bring
this within the 60 mS/m medium-
term limit set by our water licences
in South Africa.
Figure 3.16: Group water
withdrawal (million liters)
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
0
5
9
,
5
7
3
0
4
,
2
7
6
2
3
,
6
7
6
3
2
,
8
7
2008
2009
2010
2011
None of our operations are currently
located in water-stressed areas,
but we are actively monitoring all
water discharges and the quality
of these discharges.
AMD risks
AMD risks are subject to rigorous
evaluation from the exploration stage
onwards, with AMD management
plans covering both operation and
closure. We will only proceed with a
project if we are confident we can
responsibly manage its AMD risks.
63
Optimising our operations
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Despite its potential, AMD has
not been detected at any of
Gold Fields operations. Gold Fields
has commissioned several technical
studies to identify the steps required
to prevent AMD at its facilities but
none of these studies have allowed
Gold Fields to generate a reliable
estimate of the potential impact of
AMD. Gold Fields has adopted a
proactive approach by directing all
studies and rehabilitation projects
going forward to focus on AMD risk
management. All actions in this
regard are premised on a regional
and integrated approach, with a
long term objective of mine closure
without residual liabilities.
It is within this context that we are
taking a leadership role in efforts
to address the long-term impact of
AMD, through a number of initiatives
including the Liquid Gold project
and the Centralised Tailings Storage
Facility (p64-65).
AMD is considered a potential
risk in Cerro Corona in Peru.
We are, however, taking a range
of actions to manage this risk,
through the implementation of a
full lifecycle risk mitigation strategy,
continuous and comprehensive
leach testing and the integration
of relevant design measures into
its Tailings Storage Facility. In
addition, AMD management has
been fully integrated into the mine’s
environmental management systems.
AMD in the Witwatersrand
Water Basin
The historical legacy of gold mining
in the Witswatersrand Water Basin
in South Africa means AMD is a
significant issue that continues to
attract elevated levels of public and
media attention.
Gold Fields has identified a risk of
potential long term AMD issues at
our mines in the West Wits area,
which are currently experienced
by peer mining groups. AMD
relates to the acidification and
contamination of naturally occurring
water resources by pyrite bearing
ore contained in both underground
mines and rock dumps and tailings
dams on the surface.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
64
Optimising our operations
Other relevant actions taken in
2011 include:
(cid:2)(cid:3) A review of different emergency
scenarios in the event of local
flooding, including the interaction
of our shaft systems with those
of other operators (both current
and historical) and the potential
AMD impacts
(cid:2)(cid:3) Active participation in the Mining
Interest Group (of which we are
a founder), which represents the
industry in the public steering
committees set up to deal with
legacy issues in the area. It also
conducts public engagement
and water monitoring in the
Wonderfonteinspruit region
(cid:2)(cid:3) Expansion of a continuous water
monitoring and analysis system
across the West Wits catchment
area – as well as the identification
and analysis of groundwater
plumes within the region
(cid:2)(cid:3) Ongoing support of local water
forums, through which we engage
local farmers, water consumers
and other interested parties
(cid:2)(cid:3) Enhanced engagement with
environmental monitoring groups,
such as the Federation for a
Sustainable Environment
(cid:2)(cid:3) Active cooperation with external
consultants in the development
of a public-sponsored
action plan
In September 2011, we hosted
a delegation from the National
Council of Provinces (NCOP) to
demonstrate our water management
and environmental systems at KDC.
The NCOP was visiting communities
and mines in the region to familiarise
itself with the environmental issues
surrounding local gold mines
and their potential impact on
communities – with a particular
focus on AMD.
Liquid Gold
Our most important initiative for
addressing our potential long-term
water liabilities in South Africa
is the Liquid Gold project – which
is expected to be a key element
in our integrated water
management strategy.
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This regionally-focused project
envisages the production of potable
water from the fissure water (as
well as process water) produced
by our KDC and South Deep
mines. By doing so, it offers the
opportunity of mitigating a potential
contingent liability, by establishing
an economically sustainable model
that addresses the key issues in an
affordable manner.
During 2011, we completed a full
pre-feasibility study for the project
and our environmental impact
assessment was approved by
the Department of Environmental
Affairs. We are now in the process
of a full feasibility study which, on
completion, could lead to a water
treatment agreement, as well
as developing an environmental
management plan (p65).
www.environment.gov.za
Centralised Tailings
Storage Facility
We are examining the potential for
the reprocessing and centralisation
of some of our 13 current and
historical Tailings Storage Facilities
(TSF) in the West Wits area into a
new Centralised Tailings Storage
Facility (CTSF) adjacent to South
Deep’s existing Doornpoort TSF.
This project – known as the Tailings
Treatment Project (TTP) – would
seek to extract gold from the
existing tailings, whilst also reducing
our long-term tailings management
costs and minimising our future
environmental liabilities.
The economics of the TTP –
including the potential cost
savings offered by the utilisation of
innovative Python processing plants
in this process (p53) – are still under
examination, with a final decision to
be made in 2012.
Whether the TTP proceeds or not,
tailings from the South Deep mine
will be stored in the large-volume
CTSF. The CTSF would offer a
number of important advantages
in terms of mitigating our long-term
environmental liabilities.
In part, this is because (like South
Deep’s Doornpoort TSF) it would
sit on geological strata that
pose only minimal risks of
groundwater contamination.
This is in contrast to the prevailing
dolomitic geology of the West Wits
area, on which 13 of our current
and historical TSFs sit, which hosts
naturally occurring dolomitic aquifers.
The CTSF would be modelled on
similar lines to the Doornpoort
TSF, which incorporates a number
of innovative features to minimise
potential contamination incidents.
These include, for example:
(cid:2)(cid:3) Pre-isolation of the most acidic
water before it enters the dam
(cid:2)(cid:3) On-site water treatment to reduce
the risk of acid drainage and spills
(cid:2)(cid:3) Full plastic-lining of the return
water dam, as well as a robust
leak detection system
(cid:2)(cid:3) Extensive earth bund walls and
emergency catchment paddocks
to contain spillages
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Case study
Liquid Gold: Mitigating future liabilities and
enhancing water security
Liquid Gold is Gold Fields long-term strategy for developing and
implementing a sustainable business solution for water management
in the South Africa region. It aims to establish a sustainable revenue
stream to fund the on-going management of key water issues at
the KDC and South Deep mines in the Far West Rand area of South
Africa – whilst at the same time delivering potable water to local
communities that face potential water shortages in the future. These
issues include the long-term de-watering of Gold Fields mines in the
Wonderfonteinspruit river catchment area – as well as the mitigation of
any potential future Acid Mine Drainage (AMD) risks.
It is envisaged that potable water will be produced from fissure water
(as well as process water) discharged by KDC and South Deep.
This will be processed using leading-edge, customised treatment
technology and robust monitoring systems that will ensure high levels
of water quality. The technology used includes:
(cid:2)(cid:3) A Crystalactor® to reduce calcium levels and produce mine-
usable lime as a side-product. This is a pellet reactor that softens
water and enables the crystallisation of a variety of (heavy metal)
carbonates, phosphates, halides, sulphates and sulphides
(cid:2)(cid:3) A cationic ion exchange to reduce residual calcium and magnesium
(cid:2)(cid:3) A de-gassing tower to remove carbon dioxide
Gold Fields is collaborating with an independent water services
provider to ensure these technical processes fully satisfy relevant
quality standards for potable water. Gold Fields also plans to establish
a water treatment agreement. It is envisaged that the water will then
be delivered by local municipalities, or other agreed service providers,
using established infrastructure. This will help ensure that dewatering
continues at economically and environmentally sustainable levels –
even after the closure of Gold Fields mines on the West Rand.
It is envisaged that the sustainability of the Liquid Gold project
will be further augmented through the production of marketable
chemicals – such as calcium magnesium nitrate (used to make
fertiliser) – as a by-product of the water treatment processes.
Gold Fields is investigating the establishment of third-party
off-take agreements for these by-products.
“By implementing our Liquid Gold project,
<(cid:7)(cid:8)(cid:16)(cid:6)(cid:7)(cid:8)(cid:13)(cid:6)(cid:12)*(cid:16)(cid:17)(cid:20)(cid:3)(cid:27)(cid:7)(cid:18)’(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:19)(cid:17)(cid:3)(cid:7)(cid:15)(cid:20)(cid:3)(cid:14)(cid:17)(cid:16)(cid:18)(cid:18)’(cid:8)
positioning ourselves to avoid potential
AMD-related issues.”
Peter Turner, Executive Vice-President: South Africa Region
65
Optimising our operations
Subsequent to the year-end,
Gold Fields entered a Memorandum
of Understanding (“MoU”) with
Gold One International to investigate
the viability of concurrently
reprocessing the two companies’
combined surface tailings deposits,
located on the West Rand region
of South Africa. Under the MoU,
Gold Fields and Gold One will
jointly investigate the feasibility of
establishing a joint venture into
which both will contribute surface
assets for retreatment. These assets
are expected to comprise in excess
of 700 million tonnes. A detailed
scoping study is expected to be
completed by mid-2012, following
which a decision will be taken on
whether to advance the study to a
feasibility level. The intention of the
joint venture, should it proceed, is
to reclaim and retreat historic and
current tailings material to recover
residual gold, uranium and sulphur.
During 2012, we hope to advance
our tailings treatment strategy
to achieve a clearer outcome –
having examined all the options
set out above.
Additional water risks
Australasia region
In Australia, our primary water risks
relate to availability. In 2011, we
continued to diversify our supply
of process quality water away from
the bore-fields we have relied on in
the past. Agnew sources its water
both from a nearby decommissioned
open pit and from underground.
The mine also carries out extensive
water recycling, including that of
tailings water, pumped underground
water and domestic waste water.
In 2011, St Ives sourced
approximately 25% of its water
for processing from a freshwater
dam. It also commissioned a
detailed, third-party study of the
future viability of its current bore-
field – with particular focus on
future consumption patterns and
alternative sourcing. The operation
recycles up to 30% of its water,
depending on tailings deposition
locations and climatic conditions.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
66
Optimising our operations
We have identified the early
development of an underground salt
plume at a ‘legacy’ TSF at Agnew.
We have implemented a study and a
survey to inform additional actions to
be taken.
South Africa region
In South Africa, which faces
potential future water shortages,
our operations source their water
from local utilities and from
naturally occurring water found
underground. The water from
underground constitutes a much
larger volume - in total more than
100 million liters per day. The larger
portion of this volume is pumped to
surface, without the mining process
impacting on it, and released into
the natural environment.
Our mines have a comprehensive
monitoring programme that is
used to continually check both the
volume and quality of the water
that is discharged into the natural
environment. This requires regular
sampling of all discharges through
which salt and heavy metal levels
are checked to ensure legally
permissible volume and quality levels
are not exceeded. We also have
hundreds of sampling boreholes that
are carefully positioned to monitor
underground water and the potential
pollution thereof.
Through this process, we can
identify anomalies and rectify any
problems that may arise from time to
time. All such incidents are reported
to the authorities and resolved in
a transparent and collaborative
manner. We are currently in the
process of introducing continuous
monitors on all of our surface
discharges, which should assist
us even further in identifying and
mitigating risks associated with our
water discharges.
South America region
In Peru, water use at our Cerro
Corona mine is minimised through
the use of a closed circuit water
system. This means we do not use
water from local rivers – instead
relying on rain and groundwater
– and only consume 17% of the
water we are permitted to use
under our licence.
Water quality represents a highly
sensitive issue within communities
in the Hualgayoc region, due to
the negative environmental legacy
of previous mining operators and
heavy local reliance on agriculture.
As a result, we are involved in a joint
water monitoring programme led
by the National Water Authority. This
multi-stakeholder initiative, which
carries out regular testing of the
Tingo and Hualgayoc rivers, involves
local water consumers, the regional
director for agriculture and the local
water authority.
Despite the joint water monitoring
programme – as well as the fact
that all of our discharges are within
regulated limits – downstream
communities continue to raise
concerns around water quality.
As a result, in 2011 we continued
efforts to build community
confidence, including:
(cid:2)(cid:3) The seeking of government
verification of downstream
water quality
(cid:2)(cid:3) Minimisation of the non-toxic
sediments in our discharges
(cid:2)(cid:3) Support for two public water
treatment plants
(cid:2)(cid:3) Precautionary water quality
monitoring at two local springs
West Africa region
In Ghana, we face potential water
risks in terms of both availability
and quality. In 2011 we made good
progress in reducing our water use
through the application of closed-
circuit water processes during the
heap leaching process, as well
as water recycling. For example,
at Tarkwa we recycle approximately
35% of water used in the
CIL process.
In terms of quality, we are
implementing a number of initiatives
to further minimise the risk of water
contamination. During 2011, we
completed the construction of the
TSF3 tailings storage facility at
Tarkwa, which incorporates a range
of control measures such as an
impermeable clay base and pen
stock, extensive water monitoring
boreholes, as well as enhanced
embankments. We also installed a
water clarification plant to remove
suspended solids in the water to
support our heap leaching process
at Tarkwa. This – along with longer
retention times – has helped
ameliorate community concerns
about our past discharge of limited
amounts of non-toxic silt into the
local water system.
3.4.4 Reducing our
carbon and managing
climate change impacts
Growing international concern
about climate change, as well as
the increasing likelihood of carbon
regulation in a range of jurisdictions,
means we place strong emphasis
on carbon and climate change
management. In addition, rising
energy costs mean that any success
in reducing our energy consumption
delivers important commercial
benefits, while at the same time
cutting our emission levels.
Carbon-based electricity
generation accounts for the bulk
of our Scope 2 emissions.
As a result, we are developing
a fully integrated, Group-level
Energy and Carbon Strategy and
management plan. This is with the
objective of ensuring regulatory
compliance, defining our energy
usage, identifying key mitigation
measures for reducing carbon
emissions and energy consumption,
embedding relevant management
strategies and confirming reporting
requirements and protocols. Training
and awareness, as well as regular
performance reviews, will be integral
components of this new strategy.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
In 2011, we embedded our new
Carbon Management Policy,
which commits us to reducing our
carbon footprint, improving our
energy efficiency and managing
the risks posed by climate change.
Under this policy, our regions are
responsible for developing a Carbon
Management Strategy tailored to
local context and based on the
following three pillars:
(cid:2)(cid:3) Management and reporting,
including carbon accounting,
reporting and communication
(p50-51)
(cid:2)(cid:3) Adaptation, including the
development of a strategy
to manage climate change
risks (p69)
(cid:2)(cid:3) Mitigation, including the
mitigation of carbon pricing risks,
which will impact on our cost
structures and NCE, as well as
focus on the opportunities offered
by the generation and sale of
carbon credits (p68)
Figure 3.17: Group CO2-e
emissions (tonnes)1
7m
6m
5m
4m
3m
2m
1m
0
3
2
7
,
6
0
5
,
5
6
7
5
,
1
1
2
,
5
3
4
2
,
0
5
3
,
5
1
6
9
,
7
9
2
,
5
2008
2009
2010
2011
Figure 3.18: Group CO2-e
emissions by type (%)1
Scope 2
Scope 1
Scope 3
12%
14%
74%
Figure 3.19: Carbon intensity
(tonnes CO2-e/oz)2
Emission intensity
Weighted emission intensity
(corrected for ore grade)
Weighted emission intensity (corrected
for ore grade and mining depth)
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0
1
4
.
1
2
4
.
1
0
4
.
1
9
3
.
1
9
2
.
1
3
1
.
1
3
4
.
1
5
2
.
1
6
9
.
0
2009
2010
2011
Figure 3.20: Group NOx and SOx
emissions (tonnes)
NOx (tonnes)
SOx (tonnes)
During 2011, we started integrating
carbon pricing into our financial
planning. Although we are not
currently subject to cap and trade
carbon pricing schemes, we
have taken this step to ensure we
are well placed to thrive in a
carbon-rationed future. Carbon
pricing will also be included in our
2013 budgeting process – with
specific carbon reduction targets
to be determined by the Group
Executive Committee.
6,000
5,000
4,000
3,000
2,000
1,000
0
6
0
3
5
,
7
5
1
5
,
5
3
6
5
,
5
0
1
5
,
2
2
2
2
2
2
6
3
2
3
5
2
2008
2009
2010
2011
67
Optimising our operations
Carbon emissions
Our reliance on coal-generated
power for our deep-level mines in
South Africa accounts for the majority
of our carbon emissions (89% of
Scope 1 and 2 emissions). Much of
the remainder is accounted for by
our truck fleets in our other regions.
During 2011, our total emissions
(Scope 1, 2 and 3 including mine
methane) amounted to 6.6 million
tonnes CO2-e (2010: 7.1 million
tonnes). As part of our reporting
under the Carbon Disclosure
Project, we have broken our
emissions down as follows:
(cid:2)(cid:3) Scope 1 including mine methane
emissions3: 1.01 million tonnes
CO2-e (2010: 1.40 million tonnes)
(cid:2)(cid:3) Scope 1 excluding mine methane
emissions: 0.46 million tonnes
CO2-e (2010: 0.44 million tonnes)
(cid:2)(cid:3) Scope 24: 4.84 million tonnes
CO2-e (2010: 4.91 million tonnes)5
(cid:2)(cid:3) Scope 36: 0.79 million tonnes
CO2-e (2010: 0.78 million tonnes)5
In 2011, Gold Fields was ranked first
in the Top 100 Carbon Disclosure
Leadership Index (CDLI) for the
Johannesburg Stock Exchange
(JSE). The CDLI rates JSE-listed
companies on the disclosure of
their carbon emissions and is
carried out annually by the global
Carbon Disclosure Project. Our
disclosure rating of 98% is within
1% of the best score in the world,
placing us among the best of the
3,700 companies surveyed by the
CDP. Furthermore, Gold Fields
was ranked joint first for Carbon
Leadership Performance, which
measures how companies set
carbon reduction targets and how
they perform against them.
1 Scope 1 and 2 emissions only. Excludes
fugitive mine methane emissions
2 Carbon intensity for 2008/2010 restated due
to revised reporting re ounces produced
3 i.e. All direct greenhouse gas emissions
4 i.e. Indirect emissions from consumption of
purchased electricity, heat or steam
5 Figures for 2010 have been restated in light
of the Greenhouse Gas Protocol. Please refer
to footnote 3 on p61 for an explanation
6 i.e. Other indirect emissions, such as
transport-related activities in vehicles
not owned or controlled by Gold Fields,
outsourced activities, waste disposal, etc.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
68
Optimising our operations
Carbon regulation and
alternative energy
Emerging carbon regulation in
Australia and South Africa makes
it particularly important that we
continue to reduce our energy
consumption, reduce our carbon
emissions and generate Certified
Emissions Reductions (CERs).
Australia’s Clean Energy Act is due
to introduce a carbon tax that prices
carbon at A$23 per tonne. A national
cap and trade scheme will be
gradually introduced to replace the
tax. Although we do not directly fall
under this scheme, the legislation
will also adjust fuel tax credits and
excise duties to apply an equivalent
carbon price to our diesel. We
expect this to introduce additional
costs of between A$6 and A$8
million (US$6 and US$8 million)
a year at current levels of fuel
consumption. Should we become
subject to the cap and trade scheme
in future, Gold Fields could possibly
‘import’ CERs where necessary –
including self-generated CERs from
our South Africa and West Africa
regions. In 2011, we actively worked
to understand the full impact of the
Clean Energy Act and to identify any
related opportunities.
In October 2011, the Government of
South Africa approved the National
Climate Change Response Policy,
which envisages the imposition
of carbon emissions caps on the
country’s largest emitters within the
next two years – including those
in the mining sector. This is with
the aim of contributing to a cut in
carbon emissions growth by 34% in
the next decade and 42% by 2025.
In the 2012 Budget, the government
announced plans to introduce
carbon taxes in 2013 at R120/
tonne, although nearly two-thirds of
emissions will be tax-exempt until
2020. Again, we are investigating
opportunities to mitigate the
impact of such regulation through
the generation of CERs within
South Africa, as well as from our
Australasia and West Africa regions.
Our efforts to mitigate our carbon
emissions have been given support
by the continuation of the Kyoto
Protocol as agreed by the United
Nations Framework Convention on
Climate Change (Cop 17) in Durban
in December 2011. This will enable
us to continue our efforts to generate
carbon credits to fund some of our
energy efficiency projects. We are
already in a relatively good position
to participate in future carbon
markets, with a number of alternative
energy projects either active or in the
pipeline. These include the following:
Beatrix Methane Project
In 2011, our cutting-edge
Beatrix Methane Project was
registered under the Clean
Development Mechanism (CDM).
It was estimated that the flaring of
underground methane gas and the
surface bore-holes generated a
total of 30,000 Certified Emission
Reductions (CERs).
The value of these CERs on
the international carbon trading
market in 2011 totalled R1.2 million
(US$166,000). We also advanced
plans to construct a co-generation
plant that will use this gas as a
feedstock to generate approximately
4MW a year of electricity. It is
expected that this could prevent the
emission of approximately 12,000
tonnes of methane a year, equivalent
to 252,000 tonnes of CO2-e. In
financial terms, this would be
equivalent to around R10.4 million
(US$1.4 million) in CERs a year –
and R2.5 million (US$346,000) in
annual energy savings.
Over the current first phase of
the project (which will last to
around 2020) we expect to generate
around R85 million (US$11 million)
in CERs and about R70 million
(US$9 million) in energy savings at
current CER prices and Rand-Euro
exchange rates.
During 2011, we initiated work
to establish a second methane
extraction system, including a flare
installation at Beatrix West, with
construction to start in mid-2012.
This would approximately double
the amount of methane extracted
from underground and the
electricity generated.
Solar generation at Beatrix
In addition, we are investigating the
potential for large scale, third-party
solar power generation on our land
at Beatrix, which would be subject
to the South African feed-in tariff, a
tariff that subsidises generation of
electricity using alternative energies,
such as solar and wind.
Bio-energy generation at Tarkwa
Plans are in place to establish a
new 10 - 15 MW biomass energy
plant on the boundary of our Tarkwa
mine – with all power generated at
the plant to be utilised by the mine.
It is expected that the plant, which
will initially use feedstock from
maturing rubber plantations, will be
commissioned in 2013.
We are analysing opportunities
for the future sourcing of biomass
from local communities. The project
benefits from funding assistance
through the international Clean
Development Mechanism (CDM),
and has the potential to produce up
to 45,000 CERs a year, either to sell
or to off-set carbon emissions from
our other operations.
Wind generation at Lake Lefroy
At St Ives, we are continuing to
collect wind data on nearby Lake
Lefroy to assess the potential for
large-scale wind-generation. This
produced a wind resource model
during 2011, which indicated a
reliable wind resource and strong
potential for wind farming. This will
assist with the development of a
wind farm feasibility study in 2012.
The study will include analysis of the
potential for the generation of CERs,
which would considerably enhance
project economics.
www.cop17-cmp7durban.com
www.cdm.unfccc.int
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
69
Optimising our operations
Climate change impacts
Figure 3.22: Group input materials (tonnes)
Although it is difficult to establish
direct causation, there are signs
that climate change may already be
affecting our operations in Ghana.
We have observed deviations from
established weather patterns – with
implications in terms of the intensity
of rainfall during certain periods.
This has had a limited impact on
the ‘washing out’ of our waste rock
dumps and rehabilitated sites. We
are currently analysing potential
actions to ensure such risks are
mitigated in future. Likewise, in
mid-2011 Tarkwa’s Teberebie pit
was subject to flooding, which
temporarily impacted production.
Pump capacity at the pit has
subsequently been upgraded (p95).
In addition, we are carrying
out certain projects under the
‘adaptation’ pillar of our Carbon
Management Strategy, including:
(cid:2)(cid:3) Designing chilling plants for
higher daytime temperatures
(cid:2)(cid:3) Increasing the freeboard in
slimes dam design to mitigate
flash flood risks
3.4.5 Managing
materials responsibly
We are committed to the safe and
responsible management of our
input and output materials.
Figure 3.21: Group mining waste
(million tonnes)
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0
Tailings
Waste rock
.
7
4
4
1
.
8
3
3
1
.
2
1
3
1
.
4
0
8
.
3
6
3
4
.
3
2
.
7
8
4
5
.
5
5
2008
2009
2010
2011
2008
2009
2010
2011
120,000
100,000
80,000
60,000
40,000
20,000
0
Timber
Blasting
agents
HCI
Lime
Cement
Caustic
soda
Our most significant input materials
include timber, blasting agents,
Hydrogen Chloride, lime, cement
and caustic soda. However, cyanide
represents the most potentially
hazardous input material, meaning
we place particular emphasis on
its management. All our eligible
operations have full accreditation
under the International Cyanide
Management Code (ICMC). This
accreditation extends to our
transport providers.
Our most significant output
materials include tailings, waste
rock, chemical waste and
hydrocarbon waste.
Each of our mines has a life of
mine tailings management plan,
supported by relevant tailings
management procedures and
guidance. Our tailings storage
facilities (TSFs) – as well as their
associated pipelines and pumping
facilities – are subject to daily
inspections, as well as formal
annual reporting. In addition, they
are inspected for technical integrity
by independent engineers at least
once every three years – or more
frequently where required by local
circumstances or relevant permit or
licence conditions.
Our TSFs are subject to a range
of measures to minimise the risks
they pose to the environment
– including robust physical
modelling and engineering. They
are also subject to ISO 14001
certified, externally audited tailings
management systems.
Additional content online
<<<+(cid:4)(cid:12)(cid:18)(cid:31)(cid:14)(cid:7)(cid:18)(cid:31)(cid:19)+(cid:17)(cid:12)+_(cid:16)
What is the International
Cyanide Management
Code (ICMC)?
The ICMC is a voluntary
gold industry programme to
promote the responsible use
of cyanide, protect human
health and reduce potential
environmental impacts.
Signatories to the Code are
subject to third-party auditing
to ensure their compliance.
Compliance with the Code is
recognised as best practice
for cyanide management
by the World Gold Council,
the Council for Responsible
Jewellery Practices, the
International Finance
Corporation and the G8
group of countries.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
70
Optimising our operations
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
71
Optimising our operations
In Ghana, for example, we
implement a total ban on hunting
on our land holdings and have
strict controls to protect local
water bodies. Because of this,
our operations act as de facto
sanctuaries for local wildlife and
enjoy high levels of biodiversity
compared to their surrounds.
Gold Fields is a corporate member
of the Ghana Wildlife Society, and
their guidelines continue to inform
our management of biodiversity
at site-level. We are also a
founding member of Leadership
for Conservation in Africa (LCA),
an organisation through which
business, governments and
environmental organisations work
together to promote conservation-
led socio-economic development.
Likewise, the shores of Lake Lefroy
near St Ives in Australia represent
an area of sensitive biodiversity.
Internal and external permitting and
monitoring systems are in place
to assess the cumulative impacts
of the operation’s lake-based
mining and to minimise related
ecological impacts. The expansion
of St Ives’ lake-based operations
has been assessed by the Office
of the Environmental Protection
Authority and ministerial approval
was granted – with conditions – in
November 2011.
Additional content online
<<<+(cid:4)(cid:12)(cid:18)(cid:31)(cid:14)(cid:8)(cid:7)(cid:18)(cid:31)(cid:19)+(cid:17)(cid:12)+_(cid:16)
www.ghanawildlifesociety.org
Specific risk management
measures include:
(cid:2)(cid:3) Pollution containment facilities to
capture any runoff
(cid:2)(cid:3) Recycling systems to enable
tailings water to be reused in
metallurgical processes (including
closed circuit systems)
(cid:2)(cid:3) Dust and erosion control
measures, including vegetation
and/or dust palliatives on
slope faces
Although most of our tailings are
stored in TSFs, a proportion
is recycled as paste fill (in
combination with cement) in
line with best practice rock
engineering requirements.
In South Africa, we recycle a
substantial amount of waste
rock through reprocessing and
use in construction projects
carried out by our contractors.
The remainder is kept in managed
dumps, which are subject to
comprehensive rehabilitation.
3.4.6 Respecting and
promoting biodiversity
Our management of fauna and flora
is based on an understanding of
the complex relationships between
biodiversity, climate change and
water – as well as the need to
manage ecosystems in their entirety.
Where feasible, we aim to have a net
positive impact on biodiversity.
All of our mines evaluate direct and
indirect biodiversity risks under their
EMSs and as part of mine lifecycle
management. Where relevant, we
work with local communities and
environmental NGOs to develop
biodiversity management plans –
and to carry out joint monitoring of
our biodiversity risks and impacts.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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72
Optimising our operations
3.5 Regional overview:
Australasia
3.5.1
Introduction
Gold Fields operational activities
in the region are centred on our St
Ives and Agnew mines in Western
Australia. Gold Fields also has an
extensive greenfields exploration
portfolio in the region, including
the East Lachlan joint venture
projects in New South Wales and
the Delamarian project in South
Australia (p109-110). The most
promising growth project in the
region is the highly prospective
gold-copper Far Southeast project in
the Philippines (p116-118).
In March 2012, we made a third
down-payment of US$110 million
under our US$340 million option
agreement to acquire a 60% interest
in the Far Southeast project. The first
payment of US$54 million was made
in September 2010 and the second
of US$66 million in September
2011. If we exercise our option, the
final payment of US$220 million is
expected to be paid in 2012. Our
extensive surface and underground
drilling programme at Far Southeast
continues to show promising results
– supporting both the known core of
mineralisation, as well as lateral and
vertical extensions.
Performance in 2011
Overview
In 2011, we continued to stabilise
our mining operations in Australia to
provide a solid platform for near-
mine production expansion – and
to create a more robust regional
NCE margin. Actions undertaken to
support these goals included:
(cid:2)(cid:3) Implementation of Business
Process Re-engineering (BPR)
(cid:2)(cid:3) Ongoing near-mine reserve
replacement
(cid:2)(cid:3) Achievement of full production
at our Athena underground
operation at St Ives and the
Songvang open pit at Agnew
(cid:2)(cid:3) Construction of the Hamlet
underground deposit at St Ives
We have implemented a tailored
recruitment and retention programme
to address the competitive, ‘fly in,
fly out’ labour market in Western
Australia. Although our staff turnover
rate is steady at 28% (2010: 30%),
we expect the positive impacts of
this programme to become apparent
in the next few years.
Both St Ives and Agnew retained
their OHSAS 18001 and ISO
14001 certification, and remained
compliant with the International
Cyanide Management Code.
Production and NCE margin
Attributable production in Australia
increased by 6% in 2011 to 659,000
ounces (2010: 620,000 ounces).
This reflected stable mill throughput
at St Ives, as well as higher output
from the underground Kim ore body
and maiden production from the
newly commissioned Songvang
open pit at Agnew.
Over the same period, the regional
NCE margin improved to 23%
(2010: 20%). In part, this was due
to improved output and higher gold
prices, offset by increasing costs
and capital expenditure.
Outlook for 2012
The regional target of 1 million
ounces in production or development
by 2015 remains our core objective.
In 2012, we plan to achieve gold
output of between 630,000 and
660,000 ounces at a total cash
cost of A$890/oz and an NCE of
A$1,415/oz (including the one-off
cost to convert to owner mining at
St Ives’ open pit operations). We are
confident that considerable amounts
of our development ounces will
come from our Far Southeast project
in the Philippines.
Opportunities
(cid:2)(cid:3) Continuous improvement of
health and safety performance
(cid:2)(cid:3) Highly prospective sites with
scope for further development
(cid:2)(cid:3) Leveraging of internal technical
competencies to further improve
productivity and costs
Figure 3.23: Attributable gold pro-
duction (000’oz)
800
700
600
500
400
300
200
100
0
2
5
6
6
1
6
2
0
6
0
2
6
9
5
6
2007 2008 2009 2010 2011
Figure 3.24: NCE margin (%)
3
2
1
2
0
2
30
25
20
15
10
9
2
1
5
0
2007 2008 2009 2010 2011
Figure 3.25: LTIFR1
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0
7
0
4
.
2
8
2
.
6
7
1
.
5
8
1
.
2008
2009
2010
2011
1 Restatement – figures for 2009 and 2010
previously reported as 1.18 and 4.08
respectively. See p4 for explanation
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
73
Optimising our operations
3.5.2 Top 10 Australasia region heat map
The heat map below sets out the top 10 Australasia region risks, as identified through our Enterprise Risk
Management (ERM) process (p36-37).
Maximum
Travel risks associated
with senior managers
flying to the mine sites
9
Illegal use of explosives by
third-parties
10
5
4
y
t
i
r
e
v
e
S
Employee turnover
Failure to achieve operational plan
Impact of the high cost base and adverse gold
price/exchange rate fluctuations on profitability
2
1
3
Continuity of energy supply after expiry of
current sourcing arrangement
Inability to execute mine construction
and/or expansion projects
Critical infrastructure failure
8
7
6
Rising input costs
Failure to maintain improvements in
Lost Time Injury Frequency Rate
Probability
Maximum
Minimum
Risk mitigating strategies
1
2
3
(cid:2) Aggressive and ongoing implementation of Business Process Re-engineering (BPR) to achieve targeted NCE margins
(cid:2) Implementation of our production reporting tool to analyse production performance
(cid:2) Enhanced focus on inputs and outputs with a focus on improved mine planning and reporting
(cid:2) Negotiation of new power purchasing agreement
(cid:2) Investigation of alternative supply sources, including self-generation
4
(cid:2) Provision of a competitive employee value proposition
(cid:2) Acceleration of our graduate development programmes
(cid:2) Enhanced focus on leadership development as well as individual employee development
5
(cid:2) Prioritisation of maintenance activities
(cid:2) Technical review and assurance by Group Technical Services
(cid:2) Engagement of specialist consultants
6
(cid:2) Prioritisation of health and safety resourcing
(cid:2) Enhanced enforcement of health and safety standards
7
8
(cid:2) Ongoing implementation of BPR to control cost escalation
(cid:2) Appointment of designated, qualified Project Managers for relevant projects
(cid:2) Implementation of improved project reporting systems
9
(cid:2) General review of company travel procedures
(cid:2) Prohibition on a ‘critical mass’ of managers travelling together
10
(cid:2) Focus on strict explosive magazine procedures, including auditing
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
74
Optimising our operations
3.5.3 Operation
overview: St Ives
The lease area of our St Ives mine is
located near the town of Kambalda
in Western Australia – 80km south
of Kalgoorlie. It produces from four
underground mines, three open pits
and 10 surface stockpile sources,
with processing taking place
through a carbon in leach plant
and a heap leach plant.
Performance in 2011
Overview
Notable achievements in
2011 include:
(cid:2)(cid:3) Commercial levels of production
at our new Athena underground
operation
(cid:2)(cid:3) Commissioning of the Mars/
Figure 3.26: Key operating statistics St Ives
Key operating statistics
2011
2010
2009
2008
2007
Gold produced – attributable (‘000oz)
Total cash cost (A$/oz)
465
873
468
776
415
816
415
739
Notional Cash Expenditure (NCE) (A$/oz)
1,248
1,064
1,056
1,014
Gold price (A$/oz)
Operating profit (A$m)
Operating costs (A$m)
Operating margin (%)
NCE margin (%)
1,532
1,336
1,241
1,033
312
403
44
19
273
376
44
20
180
345
35
15
116
301
27
12
451
582
806
832
105
257
28
3
Figure 3.27: Key sustainability statistics St Ives
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (A$m)
Employee wages and benefits (A$m)
Total employees
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
18
47
466
0
2.86
2.79
21
43
319
0
5.031
2.60
183.8
1,805
29
36
315
0
0.82
3.00
16
32
271
0
1.60
3.10
198.1
1,919
212.1
1,980
Minotaur and Paddy’s open pits
Cyanide consumption ('000 tonnes)
(cid:2)(cid:3) Reaching full production at the
Formidable open pit
CO2-e emissions ('000 tonnes) (Scope 1&2)
Energy consumption (TJ)
174.7
1,718
(cid:2)(cid:3) Successful transition to
owner-mining at our
underground operations
We continued to focus on managing
the strip ratio, disciplined scheduling
and enhanced mining plans. During
2011, our mining flexibility and
our production sustainability were
enhanced by the fact that we:
(cid:2)(cid:3) Progressed our two new open
pits into production
(cid:2)(cid:3) Commissioned our Athena
project and reached commercial
levels of production
(cid:2)(cid:3) Advanced the construction of the
Hamlet decline and completed
relevant surface infrastructure
(cid:2)(cid:3) Extended the life of our Cave
Rocks underground operation
by 1-2 years as a result of
extensive drilling
(cid:2)(cid:3) Carried out extensive
maintenance on our 15-year old
Heap Leach Facility
(cid:2)(cid:3) Completed a paste-fill plant
for Athena and Hamlet, due for
commissioning in March 2012.
This will deliver greater mining
flexibility and help improve safety
Water withdrawal (million liters)
10,686
16,309
23,291
22,159
Figure 3.28: Mineral Resources and Mineral Reserves St Ives
Mineral Resources and Mineral Reserves St Ives
2011
% of Group total
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
5.31
2.81
2%
4%
1 Restatement – figure previously reported as 5.05. See p4 for explanation
St Ives also implemented a range of
BPR initiatives. These included:
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:4)(cid:9)(cid:10)(cid:11)(cid:12)(cid:4)(cid:3)(cid:11)(cid:7)(cid:8)(cid:13)(cid:3)(cid:14)(cid:8)
carbon emissions
(cid:2)(cid:3) Improvements to short-term
interval controls, which have
increased throughput at the
heap leach plant
(cid:2)(cid:3) Identification and implementation
of a range of initiatives –
including analysis of the heap
leach and milling mixes, as well
as mine scheduling – following
an externally conducted
optimisation study
(cid:2)(cid:3) Implementation of owner-mining
for all underground ore
extraction, whilst maintaining
contractor development. This
included the integration of
contractor employees, truck
fleet and equipment
During 2011, we progressed efforts
to improve energy efficiency and
reduce our carbon emissions. Aside
from the direct cost savings this is
likely to offer, such efforts are likely to
offset changes to be made to fuel tax
rebate credits under Australia’s Clean
Energy Act (p68, 155). In addition,
we are using fuel additives to improve
the burn efficiency of our truck
engines and are exploring automated
weighing systems to improve truck
loading efficiencies.
In terms of processing, we
implemented the heating of pre-
treatment water using solar vacuum
tube and heat pump technologies
to improve productivity and lower
energy consumption.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
We also advanced the installation
of Variable Speed Drives to mill
water pumps to reduce wear
and electricity consumption.
Furthermore, we continued our
two-year assessment of the St Ives
wind resource and large-scale wind
generation on Lake Lefroy. This
produced a positive pre-feasibility
study based on accumulated site
data, in addition to potential turbine
locations and costs (p68).
Production, development and
NCE margin
Production performance remained
relatively steady through 2011, with
output reaching 465,000 ounces
(2010: 468,000 ounces). Our focus
has been on maintaining similar
levels of production at the mine,
whilst reducing its costs.
At the underground operations, ore
mined increased from 1.61 million
tonnes at 5 g/t in 2010 to 1.77 million
tonnes at 4.7 g/t in 2011 – with
increased tonnage from Athena
replacing the Belleisle mine, which
closed in May 2011. At the open pit
operations, ore mined decreased
from 5.42 million tonnes at 1.7 g/t in
2010 to 4.31 million tonnes at 1.8 g/t
per tonne in 2011 – with a decrease
in the open pit mining fleet and
greater use of stockpiled ore.
Gold production from Lefroy
decreased from 439,000 ounces
to 433,200 ounces as a result of
reduced underground grade and
greater use of stockpiled ore. At the
heap leach facility, gold production
increased from 28,900 ounces to
31,400 ounces due to throughput
improvements and a slightly higher
average grade of ore stacked.
Operating costs rose at the start
of the year due to higher waste
normalisation costs after drawing-
down on inventory to supplement
lower production. The NCE margin
declined marginally from 20% to
19% in 2011 as a result of higher
capital expenditure, offset in part by
improved gold prices.
75
Optimising our operations
Outlook for 2012
This plan assumes:
We plan for St Ives to produce
between 440,000 and 460,000
ounces of gold at a total cash cost
of A$935/oz (US$935/oz) and an
NCE of A$1,540/oz (US$1,540/oz),
which includes the one-off cost to
convert from contractor to owner
mining at the open pit operations.
(cid:2)(cid:3) The achievement of a full
production run rate at Athena
(cid:2)(cid:3) Completion of a new paste-fill
plant to support the Hamlet and
Athena operations
(cid:2)(cid:3) Bringing Hamlet into production
by mid-2012
(cid:2)(cid:3) Identifying ongoing opportunities
to grow and consolidate our open
pits in light of stable gold prices
(cid:2)(cid:3) Continued implementation
of BPR
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
76
Optimising our operations
3.5.4 Operation
overview: Agnew
Agnew is located 23km west of
Leinster, which is itself 375km north
of Kalgoorlie. The mine produces
from the Kim, Main and Rajah ore
bodies, which form part of the
Waroonga underground mining
complex as well as the Songvang
open pit. Ore is processed through
a carbon in pulp plant.
Performance in 2011
Overview
Notable achievements in
2011 include:
(cid:2)(cid:3) Consolidation of owner-mining,
with commensurate productivity
and cost benefits
(cid:2)(cid:3) Commencement of surface
mining at the Songvang open pit
(cid:2)(cid:3) Significant development work on
the Main Vent Shaft
(cid:2)(cid:3) Extensive drilling on the Main
Lode ore body to support long-
term mine sustainability
Our focus has been on operational
stabilisation, following the
implementation of owner-mining.
The first half of the year was
relatively challenging as a result of:
(cid:2)(cid:3) Short-term challenges around
the consistency of our paste fill
cement, which limited our ability
to bring stopes into sequence
at Kim Lode – the highest
grade section of the Waroonga
complex. We have since achieved
improvements in this respect
(cid:2)(cid:3) A lack of open pit ore
Nonetheless, production recovered
as a result of:
(cid:2)(cid:3) Improved underground grade,
resulting from effective planning
(cid:2)(cid:3) The commissioning of the
Songvang pit, which helped us
utilise available mill capacity and
improve operational flexibility
Figure 3.29: Key operating statistics Agnew
Key operating statistics
2011
2010
2009
2008
2007
Gold produced – attributable (‘000oz)
Total cash cost (A$/oz)
194
675
152
684
Notional Cash Expenditure (NCE) (A$/oz)
1,062
1,098
188
536
799
201
524
701
Gold price (A$/oz)
Operating profit (A$m)
Operating costs (A$m)
Operating margin (%)
NCE margin (%)
1,564
1,326
1,241
1,034
175
134
58
32
96
105
48
17
133
99
57
36
98
101
47
32
200
472
646
841
74
98
44
23
Figure 3.30: Key sustainability statistics Agnew
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (A$m)
Employee wages and benefits (A$m)
Total employees
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
Cyanide consumption ('000 tonnes)
CO2-e emissions ('000 tonnes) (Scope 1&2)
Energy consumption (TJ)
8
27
235
0
2.72
0.71
49.6
439
0
21
212
0
1.11
0.44
40.6
339
0
20
158
0
2.13
0.53
42.9
356
0
21
136
0
2.23
0.80
45.7
368
Water withdrawal (million liters)
1,287
1,213
1,564
1,096
Figure 3.31: Mineral Resources and Mineral Reserves Agnew
Mineral Resources and Mineral Reserves Agnew
2011
% of Group total
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
3.84
1.30
2%
2%
Our transition to owner-mining has
started to show benefits in terms
of efficiency, with production costs
falling by 1.3% on a per ounce basis.
This puts us in a strong position for
the future as we look to develop the
Kim ore body at depth.
In addition, during 2011 we focused
on improving mine flexibility and
sustainability through an extensive
planning and development
programme. This included the
construction of the New Vent Shaft,
which is essential for the future
development of the Kim ore body.
The Kim ore body is currently being
operated at 900 meters but extends
as deep as 1,500 meters.
We have already initiated early work
to examine potential automation of
our mining processes, including the
trial operation of a remotely operated
drill-rig and the ongoing development
of our fibre optics infrastructure.
Such technology will become
increasingly important as we mine
at deeper levels.
The New Vent Shaft will also be
necessary if we develop the
prospective Main Lode beneath
the current Main ore body, which
we are in the process of drilling.
If successfully developed, the
potentially high-grade Main Gap
ore body will play a key role in
supporting future production levels.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
77
Optimising our operations
During 2011, Agnew implemented
a range of BPR initiatives.
These included:
(cid:2)(cid:3) Ongoing optimisation of our
owner mining arrangements,
including a focus on short-term
interval controls to improve
the amount of ore trucked from
underground – as well
as equipment scheduling
and resourcing
(cid:2)(cid:3) Introduction of owner maintenance
to improve equipment availability
and reduce costs. This means only
development activity is currently
undertaken by contractors at
the mine
(cid:2)(cid:3) An increase in the capacity of the
gravity plant to improve recoveries
and process efficiency
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:4)(cid:9)(cid:10)(cid:8)(cid:11)(cid:12)(cid:4)(cid:3)(cid:11)(cid:7)(cid:8)(cid:13)(cid:3)(cid:14)(cid:8)
carbon emissions
During 2011, Agnew upgraded the
Waroonga underground ventilation
system, resulting in further electricity
savings. This included the fitting of
Variable Speed Drives (VSDs) to
underground fans to tailor ventilation
and temperatures. In addition, we
commenced the installation of VSDs
to the surface high voltage fans.
Production, development and
NCE margin
During 2011, total production
increased to 194,000 ounces
(2010: 152,000 ounces). Overall,
our production performance was
supported by the continuation of our
approach to mining taken in 2010,
which was characterised by a focus
on disciplined mine scheduling and
enhanced mining plans.
At the underground operations,
ore mined increased from 594,000
tonnes at 8 g/t in 2010 to 621,000
tonnes at 9.7 g/t in 2011. Open pit
operations recommenced in 2011,
with a cutback on the Songvang pit
delivering 586,000 tonnes at 1.6 g/t.
Total tonnes processed increased
from 815,000 tonnes at a yield of
5.8 g/t to 935,000 tonnes at a yield
of 6.5 g/t.
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This reflected improved underground
mining performance and the greater
availability of surface stockpiles after
the Songvang cutback.
Lower levels of production at
the start of the year pushed up
our operating costs, as did the
commissioning of the Songvang
pit. Nonetheless, the impact on the
mine’s NCE margin was ameliorated
by new production at Songvang,
as well as higher gold prices. As
a result, the mine’s NCE margin
improved markedly from 17% to 32%.
Outlook for 2012
We plan for Agnew to produce
between 190,000 and 200,000
ounces of gold at an NCE of
A$1,120/oz (US$1,120/oz) and
a total cash cost of A$785/oz
(US$785/oz). This plan assumes:
(cid:2)(cid:3) Increased flexibility through
the use of both high-grade
underground production and
lower-grade open pit production
(cid:2)(cid:3) The initiation of mining at the
Cinderella pit
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
78
Optimising our operations
3.6 Regional overview:
South Africa
3.6.1
Introduction
The South Africa region not only
represents our historical centre
but it also continues to play a key
role in the Group as a whole. This
is reflected by the fact that in 2011
the region accounted for 49% of
our attributable gold output (2010:
53%), 68% of our Mineral Resources
(2010: 75%) and 72% of our Mineral
Reserves (2010: 79%).
Our operations are concentrated
within the historical gold producing
region of the Witwatersrand Basin.
This includes both our mature,
deep underground Beatrix and
KDC mines, which are mined using
conventional methods. The latter is
the largest mine in South Africa in
terms of gold production.
The region is also home to our
fully-mechanised South Deep
project – the most significant gold
development project in South
Africa. South Deep, which is still
undergoing development and
ramping up production, is set to
offer a mechanised, efficient and
low cost operation focused on a
world-class ore-body. This will help
underwrite the region’s long-term
status as a critical contributor to
Group performance.
Performance in 2011
Overview
In 2011, we continued to pursue our
longstanding strategy of improving
the operational sustainability of our
mature South African mines – both
in terms of enhancing efficiency and
addressing a declining production
trend. This is with the aim of
leveraging the region’s substantial
Mineral Resource and Reserves
(p120-121) well into the future.
In particular, we aim to achieve
between 1.8 and 2 million ounces in
production or development by 2015
– as part of our broader Group Goal
of 5 million ounces.
This aim will depend on:
Figure 3.32: Attributable gold
production (000’oz)
(cid:2)(cid:3) The stabilisation of production
and the improvement of NCE
margins at our mature KDC
and Beatrix mines
(cid:2)(cid:3) Successful development and
production ramp-up at our South
Deep mine
(cid:2)(cid:3) Ramping up surface production
(cid:2)(cid:3) Recapitalisation of KDC
East 4 Shaft to enhance
higher grade production
During 2011, we undertook a range
of improvements to reduce our costs
and maximise production at KDC
and Beatrix, including:
3,000
2,500
2,000
1,500
1,000
500
0
8
8
6
,
2
6
6
0
,
2
5
9
0
,
2
6
6
8
,
1
0
2
7
,
1
2007
2008
2009
2010
2011
(cid:2)(cid:3) A reduction in electricity
consumption at KDC and
Beatrix of 3%
(cid:2)(cid:3) Continued cost reductions as
a result of our strategic BPR
programme (p48-49), including
the achievement of an NCE
margin of 23% at KDC (2010:
9%) and 25% at Beatrix (2010:
11%). This was partly due to cost
reductions flowing from actions
taken in 2010, as well as more
recent initiatives such as ongoing
workforce reduction efforts.
Overall employee numbers
continued to decline as a result
of natural attrition, voluntary
severance and the replacement
of non-specialised contracting
services by internal staff
(cid:2)(cid:3) The embedding of our Shaft Full
Potential (SFP) programme to
improve the delivery of ore to the
processing plants at KDC (p48).
The SFP programme is now fully
integrated into our management
of production, and has realised
significant improvements in face
advance, rock fragmentation and
mining quality during the latter
part of 2011
(cid:2)(cid:3) Extensive and ongoing
efforts to promote Safe
Production throughout our mines,
to avoid safety incidents and
production stoppages
(see below and p56-60)
Figure 3.33: NCE margin (%)
– excluding South Deep
30
25
20
15
10
5
0
2
2
1
2
9
1
3
2
9
2007 2008 2009 2010 2011
Figure 3.34: LTIFR1
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0
8
4
6
.
0
8
5
.
6
2
5
.
3
7
4
.
2008
2009
2010
2011
1 Restatement – figure for 2009 previously
reported as 4.54. See p4 for explanation
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
In addition, we have extended
mechanisation to the majority of flat
development ends at the long life
shafts, reducing employee exposure
to safety risks. As a result of these
efforts, we are continuing to address
a development backlog dating from
2009, when crews were diverted
to install secondary support
throughout our mines.
All of our mines in South Africa
are OHSAS 18001 and ISO 14001
certified, and are compliant with the
International Cyanide Management
Code. The Mineral Resources and
Mineral Reserves are compliant with
the SAMREC 2007 Code.
Safety
Despite a long-term trend of
improving safety performance,
2011 saw a short-term regression
in terms of fatalities. We had a total
of 19 fatal injuries in South Africa
– accounting for 95% of the Group
total. This marked a 12% increase
on 2010 (17 fatal injuries) but
remains significantly lower than the
average in the preceding five years.
As a result of this latest regression,
we placed renewed focus on a
range of programmes, including:
The engineering-out of as many
risks as possible through:
(cid:2)(cid:3) The adoption of enhanced
support systems in seismically
active mining areas intersected
by geological structures
(cid:2)(cid:3) The introduction of stope netting
to protect face employees from
falls of ground
(cid:2)(cid:3) The adoption of enhanced roof
bolting patterns in development
ends to address the risk of fall
of ground
(cid:2)(cid:3) Comprehensive bolting of the
face area of all stope panels,
which will be completed by
the end of the first quarter
of 2012
(cid:2)(cid:3) The rolling out of safety systems
on all underground rail-bound
equipment – including guard
communication and proximity
warning systems – over the next
two years
79
Optimising our operations
Figure 3.35: South Africa fatalities
50
45
40
35
30
25
20
15
10
5
0
36
31
26
17
19
2007
2008
2009
2010
2011
The impact of such measures over
the course of 2011 can be seen in
the fact that whilst 17 fatalities took
place in the first seven months of
the year, only two took place during
the remainder of the year.
Safety will remain the top
priority for Gold Fields, principally
due to the moral obligation to
pursue Zero Harm, but also due
to the operational impacts of
incidents, which have the potential
to undermine our efforts to achieve
sustainable production.
A range of new leadership and
behavioural change programmes
to ensure the prioritisation of
safety and compliance to
standards through:
(cid:2)(cid:3) The introduction of more intense
workplace safety audits and the
monitoring of hazard remediation
(cid:2)(cid:3) Increased application of the
“Stop. Think. Fix, Verify and
Continue” practice
(cid:2)(cid:3) Establishment of the Priority
Misconduct Unit to prioritise
and fast track disciplinary
action with respect to safety
related offences
(cid:2)(cid:3) Adoption of the Mining Industry
Occupational Safety and Health
(MOSH) leading practice for
entry examination
(cid:2)(cid:3) Stronger enforcement of the ‘No
Go Zone’ standard, particularly
during face cleaning operations
(cid:2)(cid:3) Deployment of behavioural
based safety teams and
coaches at all shafts
(cid:2)(cid:3) Review of the bonus system to
ensure greater employee focus
on health and safety
(cid:2)(cid:3) Tripartite, multi-level safety
engagement with the
Department of Mineral
Resources and relevant
labour organisations (p59)
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
80
Optimising our operations
a
c
i
r
f
A
h
t
u
o
S
,
C
D
K
Production and NCE margin
Outlook for 2012
Opportunities
(cid:2)(cid:3) Future leveraging of our strong
Mineral Reserve position and
well-established infrastructure
(cid:2)(cid:3) Ongoing opportunities for cost
reductions and efficiency gains
through BPR
(cid:2)(cid:3) An increase in the generation
of carbon credits by the Beatrix
Methane Project, the extension
of methane extraction to Beatrix
West and the future production of
low cost energy
(cid:2)(cid:3) A long-term strategy for
developing and implementing a
sustainable business solution for
water management and key water
issues at KDC and South Deep
through the Liquid Gold
project (p65)
1 At an exchange rate of R/US$8.00
In 2011, gold production in the
South Africa region declined to
1.72 million ounces (2010:
1.87 million ounces). This reflected:
(cid:2)(cid:3) Lower production at KDC
at 1.10 million ounces
(2010: 1.22 million ounces)
(cid:2)(cid:3) Lower production at Beatrix
at 347,000 ounces
(2010: 377,000 ounces)
(cid:2)(cid:3) Similar output at South Deep at
273,000 ounces (2010: 274,000
ounces) with increased mining
volumes offset by lower grades
Overall production in South Africa
was affected by the loss of 43,000
ounces after five days of industrial
action in July 2011 (not including
production wind-down and ramp-
up). It was also impacted – in the
case of Beatrix and KDC – by the
loss of 52,500 ounces of production
as a result of safety stoppages.
Nonetheless, the South Africa region
saw a significant improvement in its
NCE margin (excluding South Deep
and its related development costs),
which increased to 23% (2010: 9%),
demonstrating the impact of the
higher gold price received, as well
as our ongoing cost-saving efforts.
Our target remains to continue
making progress towards production
of between 1.8 and 2 million ounces
from the South Africa region by 2015,
whilst stabilising safe production at
an NCE margin of 20% (excluding
South Deep) in the short-term and
25% in the medium- to long-term.
In 2012, we plan to achieve gold
output of between 1.715 million and
1.820 million ounces at a total cash
cost of US$997/oz and an NCE of
US$1,473/oz.1
More specifically, we plan to:
(cid:2)(cid:3) Resume our long-term downward
trend in fatalities through the
safety actions outlined above
(cid:2)(cid:3) Continue development and
production ramp-up at South
Deep, which will partially offset
potentially reduced production
from KDC and Beatrix – whilst
also replacing higher-cost output
from these two mines with lower
cost production
(cid:2)(cid:3) Ensure stable and safe
production at KDC and Beatrix
and, at worst, reduce the rate of
production decline
(cid:2)(cid:3) Further reduce our energy
intensity to off-set planned
increases in Eskom’s electricity
prices (p50-51)
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
81
Optimising our operations
3.6.2 Top 10 South Africa region heat map
The heat map below sets out the top 10 South Africa region risks, as identified through our Enterprise Risk
Management (ERM) process (p36-37).
Maximum
Operational failure to deliver on planned gold output
Non-delivery on the Mine Health and Safety Council’s 2013 occupational health milestones
Mine accidents and related safety stoppages
Ageing infrastructure and catastrophic shaft accidents
Volatility in gold price and currency exchange rates
9
10
8
4
6
1
5
y
t
i
r
e
v
e
S
Failure to deliver on Mining Charter and Social
and Labour Plan (SLP) requirements
Syndicated gold/copper theft and illegal mining
3
2
7
Erosion of NCE margin
Negative investor perceptions around resource nationalism in South Africa
Skills shortages and lack of experience amongst key personnel
Minimum
Risk mitigating strategies
Probability
Maximum
1
(cid:2) Enhanced focus on the ‘engineering-out’ of safety risks
(cid:2) Oversight through the Safety and Health Production Management Task Team (SHPMTT)
(cid:2) Improved safety compliance through the Safe Production Management Programme (p56-57)
(cid:2) Cultural transformation through effective leadership and safety behaviour
2
3
(cid:2) Full realisation of the benefits of our Shaft Full Potential Programme (p48), including relevant initiatives relating to crew
performance, quality and stope panel availability
(cid:2) Implementation of new training initiatives through the Gold Fields Academy
(cid:2) Enhancement of our Employee Value Proposition and Talent Management Framework
4
(cid:2) Adoption of relevant Mining Industry Occupational Safety & Health practices to reduce noise and dust exposure
(cid:2) Implementation of occupational health interventions
(cid:2) Proactive tailoring of our occupational health strategy to ensure alignment with the revised milestones
5
(cid:2) Ongoing identification of cost saving opportunities
(cid:2) Removal of R500 million (US$63 million) from our costs over the next two years via Business Process Re-engineering (BPR)
(cid:2) Implementation of energy conservation measures
(cid:2) Improved face advance/mining quality via the Shaft Full Potential programme and review of organisational structure
6
7
(cid:2) Implementation of protection measures at source
(cid:2) Intelligence gathering, investigation and increased use of detection technology
(cid:2) Engagement with government, directly and through the Chamber of Mines
(cid:2) Enhanced local and national communication around our contribution to sustainable development
8
(cid:2) Enhanced internal reporting on SLP performance to senior management
(cid:2) Ongoing, high level review of each mine’s SLP and Mining Charter obligations and performance
9
(cid:2) Structural integrity audits on engineering infrastructure and project management of repair/refurbishment programmes
(cid:2) Inspection, repair and maintenance in line with our comprehensive Planned Maintenance Strategy
10
(cid:2) Optimisation of operating cost structures through BPR
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
82
Optimising our operations
3.6.3 Operation overview: KDC
KDC was established in 2010 as a
result of a business merger of our
Kloof and Driefontein mines. It is a
large, well-established intermediate
to ultra-deep-level gold mining
complex, with its lowest working
level around 3,350 meters below
surface. It consists of a total of 11
producing shaft systems and five
processing plants and is located
around 60km west of Johannesburg.
Despite KDC’s long history of
production, it retains considerable
Mineral Resources and Mineral
Reserves of 67.5 million ounces and
16.6 million ounces respectively.
Performance in 2011
Overview
Notable achievements in
2011 include:
(cid:2)(cid:3) The embedding of the merger
between Kloof and Driefontein
through the clustering of shafts
into five operating units and the
combination of all reef and waste
plants under one structure
(cid:2)(cid:3) A reduction in power
consumption of approximately
8MW a year through a range of
energy saving initiatives (p50-51)
(cid:2)(cid:3) Continued reduction in the labour
force through natural attrition and
voluntary severance
(cid:2)(cid:3) A record achievement of over
two million fatality free shifts in
the fourth quarter
During 2011, KDC continued to
implement its Shaft Full Potential
programme. This is optimising
operational dynamics such as:
(cid:2)(cid:3) Crew performance (e.g. reduced
safety incidents and quality
blasting of available face length)
(cid:2)(cid:3) Mining quality (e.g. optimal
fragmentation and application of
our management principles to
high-grade panels)
(cid:2)(cid:3) Panel availability (including
improved access to the
stope face)
Figure 3.36: Key operating statistics KDC
Key operating statistics
2011
2010
2009
2008
2007
Gold produced –
attributable (kg)
Gold produced –
attributable (‘000oz)
34,218
37,790
45,362
46,430
59,948
1,100
1,215
1,458
1,493
1,927
Total cash cost (R/kg)
219,642 193,948
145,177
125,503
86,955
Total cash cost (US$/oz)
946
824
536
476
384
Notional Cash Expenditure
(NCE) (R/kg)
Notional Cash Expenditure
(NCE) (US$/oz)
285,017 262,141
198,646
173,500
121,684
1,228
1,114
733
658
538
Gold price (R/kg)
368,309 287,499
261,611
228,856
156,916
Gold price (US$/oz)
Operating profit (Rm)
Operating costs (Rm)
Operating margin (%)
NCE margin (%)
1,587
5,150
7,452
41
23
1,222
3,398
7,467
31
9
965
4,969
6,898
42
24
868
4,505
6,121
42
24
693
3,937
5,470
42
22
Figure 3.37: Key sustainability statistics KDC
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (Rm)
Total taxation and royalties paid (US$m)
895
124
348
48
834
99
674
82
Employee wages and benefits (Rm)
4,119
4,303
3,896
3,313
Total employees
26,335
31,033
32,196
28,693
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
Cyanide consumption ('000 tonnes)
0.17
7.95
2.34
0.13
6.31
2.37
0.24
5.26
1.96
0.18
6.72
1.64
CO2-e emissions ('000 tonnes) (Scope 1&2) 3,295.9
12,126
Energy consumption (TJ)
3,348.2
3,492.3
3,311.7
12,293
12,334
12,066
Water withdrawal (million liters)
38,971
36,859
22,797
27,182
Figure 3.38: Mineral Resources and Mineral Reserves KDC
Mineral Resources and Mineral Reserves KDC
2011
% of Group total
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
67.50
16.58
30%
21%
The programme is also addressing
issues such as production planning,
leadership development and
infrastructure rehabilitation. In
addition, a number of practical
operational initiatives were
advanced that will help improve the
longer-term sustainability of
the mine.
These included:
(cid:2)(cid:3) Continued use of around
40 mechanised rigs on flat-
end development at the long-
life shafts
(cid:2)(cid:3) Introduction of a modular, mobile
Python processing system for
accelerated treatment of surface
rock waste material (p53)
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
(cid:2)(cid:3) The K4 Shaft rehabilitation
project, which is focused on
upgrading infrastructure and
shaft capacity to accelerate
higher-grade production
(cid:2)(cid:3) The Mpilo project to recover
residual gold from previously
mined areas
(cid:2)(cid:3) The dropdown of KDC West
Hlanganani (formerly Driefontein
5) Shaft below 50 level, which is
in feasibility
(cid:2)(cid:3) Ongoing rehabilitation of steel
work in shafts
(cid:2)(cid:3) Examination of the potential for
mechanised mining of remaining
high grade pillars, including
2 million ounces that were
previously written off
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:4)(cid:9)(cid:10)(cid:11)(cid:12)(cid:4)(cid:3)(cid:11)(cid:7)(cid:8)(cid:13)(cid:3)(cid:14)(cid:8)
carbon emissions
Production, development and
NCE margin
During 2011, production at KDC fell
to 1.10 million ounces (2010: 1.22
million ounces), due to a number of
factors, including:
(cid:2)(cid:3) Unplanned mine-wide safety
stoppages and a number of
localised safety stoppages, which
resulted in the loss of 47,000
ounces of production
(cid:2)(cid:3) Interventions aimed at
reducing employees exposure
to potential seismic and fall-of-
ground accidents
(cid:2)(cid:3) Five days of lost production
resulting from industrial action in
July 2011, which led to a loss of
43,000 ounces
(cid:2)(cid:3) Reductions in the face length and
area available for mining, mainly
due to safety considerations
Around 18% of KDC’s total costs
relate to energy. The mine undertook
a number of measures to address
energy efficiency in 2011, including:
(cid:2)(cid:3) Revised work organisation to
improve safety, including the
removal of the night shift in high
risk areas
(cid:2)(cid:3) Commissioning the first of
our three chamber pipe feed
system to improve pumping
efficiency, which will realise full
savings in 2012
(cid:2)(cid:3) Pilot operation of an energy
recovery turbine to generate
electricity from downcast water
(cid:2)(cid:3) Introduction of high efficiency
ventilation fans
(cid:2)(cid:3) Sealing of isolated and
mined-out areas to reduce
ventilation demands
(cid:2)(cid:3) Auditing of underground air and
water leaks
As a result of such measures, we
have reduced power demand by
8MW a year from 2010. This has
off-set some of the 26% increase in
electricity tariffs imposed by state
energy utility Eskom. Furthermore,
they are helping reduce our carbon
profile in South Africa – a key issue
as the government has announced
plans to introduce taxes on carbon
emissions from 2013 onwards (p68).
(cid:2)(cid:3) Reduced grades at selected
shafts at KDC West
Production is derived from
underground mining as well as the
processing of surface waste rock
dump material. The area mined
averaged 62,888 m2 per month
during 2011, with underground
ore processed at 401,000 tonnes
per month and surface material
treated at 501,000 tonnes per
month. Underground tonnage of 4.8
million tonnes was processed at an
average yield of 3.2 g/t.
KDC advanced 45km of main
development in 2011. On-reef
development totalled 7.7km at an
average centimeter grammes per
tonne (cmg/t) of 2,100 cmg/t.
At the start of 2011, the mine’s
operational costs fell as a result of
our cost-savings initiatives, including
workforce reduction, lower electricity
consumption and decreased store
costs. They subsequently rose,
however, as a result of the increase
in electricity tariffs and additional
mine support costs.
83
Optimising our operations
Nonetheless, the mine’s NCE margin
rose to 23% (2010: 9%) – supported
by the higher gold price received,
our energy efficiency measures and
natural attrition among the workforce.
Outlook for 2012
We plan for KDC to produce
between 1.06 and 1.13 million
ounces of gold at an NCE of
US$1,360/oz and a total cash cost
of US$1,000/oz. This will rely on:
(cid:2)(cid:3) Further reducing fatalities and
other key safety indicators
(cid:2)(cid:3) Ramp up in production from low
cost surface sources through
additional Python plants
(cid:2)(cid:3) Increased development and
improvements in mining volumes,
mix and quality
(cid:2)(cid:3) Continued implementation of
BPR to save around R500 million
(US$63 million) over two years
(cid:2)(cid:3) Further improvements in energy
efficiency, including investigation
of the potential for a ‘compressed
air-less’ mine and an ice-based
underground cooling system to
reduce pumping demands
(cid:2)(cid:3) Improvements to flat-end
development advance rates
through enhanced mechanised
development performance
(cid:2)(cid:3) More efficient movement of
people, materials and rock
Beyond this, we are implementing
a longer-term mine sustainability
strategy based on production
optimisation, cost minimisation and
safety excellence. Execution of this
strategy will rely on, for example:
(cid:2)(cid:3) Appropriate infrastructure
(including equipment and
capital investment)
(cid:2)(cid:3) An effective and ‘fit for the future’
workforce, supported by the ‘24
Hours’ programme (p140), strong
training, appropriate incentives
and behavioural support
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
84
Optimising our operations
3.6.4 Operation
overview: Beatrix
Our underground Beatrix mine
has been in production since
1985. Beatrix was established,
in its current form, following the
incorporation of the St Helena
Gold Mine into Freegold in 2002.
Performance in 2011
Overview
Notable achievements in
2011 include:
Figure 3.39: Key operating statistics Beatrix
Key operating statistics
2011
2010
2009
2008
2007
Gold produced –
attributable (kg)
Gold produced –
attributable (‘000oz)
10,787
11,715
12,443
12,696
15,022
347
377
400
408
483
Total cash cost (R/kg)
222,073
194,406
169,847
142,045
102,323
Total cash cost (US$/oz)
957
826
627
539
452
Notional Cash Expenditure
(NCE) (R/kg)
Notional Cash Expenditure
(NCE) (US$/oz)
279,957
255,066
228,128
196,282
147,963
1,206
1,084
842
745
654
Gold price (R/kg)
371,772
287,187
259,126
231,750
157,249
Gold price (US$/oz)
(cid:2)(cid:3) An improvement in the NCE
Operating profit (Rm)
margin from 11% to 25% through
the effective management of face
length flexibility, labour, volume
and grade
Operating costs (Rm)
Operating margin (%)
NCE margin (%)
1,602
1,602
2,409
40
25
1,220
1,026
2,339
30
11
956
1,021
2,203
32
12
879
1,052
1,891
36
15
695
746
1,616
32
6
(cid:2)(cid:3) Generation of R1.2 million
(US$166,000) through the sale
of 30,000 Certified Emissions
Reductions (p68)
(cid:2)(cid:3) Enhanced ore reserve
development – including the
introduction of hydro-powered,
remote controlled flat-end
development rigs at 3 Shaft –
resulting in greater flexibility
(cid:2)(cid:3) Accelerated extraction of the
2 Shaft pillar
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:4)(cid:9)(cid:10)(cid:11)(cid:12)(cid:4)(cid:3)(cid:11)(cid:7)(cid:8)(cid:13)(cid:3)(cid:14)(cid:8)
carbon emissions
Like KDC, Beatrix undertook a
number of measures to address
rising energy costs in South Africa
– as well as potential carbon
regulation. These included:
(cid:2)(cid:3) Ongoing application of energy-
efficient drill rigs and rock drills
at 3 Shaft – reducing reliance
on energy intensive compressed
air infrastructure
(cid:2)(cid:3) Gradual reduction of its
underground footprint
(cid:2)(cid:3) More efficient trucking of waste
rock and ore
(cid:2)(cid:3) Targeted sealing of isolated
and mined out areas at the
South Section to reduce
ventilation demands
Figure 3.40: Key sustainability statistics Beatrix
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (Rm)
Total taxation and royalties paid (US$m)
Employee wages and benefits (Rm)
Total employees
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
Cyanide consumption ('000 tonnes)
CO2-e emissions ('000 tonnes) (Scope 1&2)3
Energy consumption (TJ)
35
5
1473
9,151
0.19
2.95
0.88
798.6
3,234
18
3
2
0
1
0
1422
1307
1141
9,485
10,327
11,151
0.18
3.31
0.92
845.3
3,325
0.101
3.922
0.88
901.8
3,470
0.08
4.74
0.81
892.8
3,508
Water withdrawal (million liters)
10,226
10,834
14,866
16,678
Figure 3.41: Mineral Resources and Mineral Reserves Beatrix
Mineral Resources and Mineral Reserves Beatrix
2011
% of Group total
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
11.28
4.96
5%
6%
In addition, the Beatrix Methane
Project became partially operational,
flaring 200 liters of methane a
second from underground sources
and 120 liters a second from surface
exploration boreholes. We plan to
raise this to 800 liters a second
through the ramp-up and installation
of a second extraction system and a
new flare at the Beatrix West section.
Longer-term we are planning to
develop a power generation plant
using the methane to potentially
produce 6 MW of power for Beatrix
– around 8% of its current total
usage (p68).
1 Restatement – figure previously reported as 0.06. See p4 for explanation
2 Restatement – figure previously reported as 3.71. See p4 for explanation
(cid:2)(cid:3) Optimisation of our surface fans
3 Excludes fugitive mine methane
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
85
Optimising our operations
a
c
i
r
f
A
h
t
u
o
S
,
x
i
r
t
a
e
B
Outlook for 2012
We plan for Beatrix to produce
between 350,000 and 370,000
ounces of gold at an NCE of
US$1,280/oz and a total cash cost
of US$960/oz. This will rely on:
(cid:2)(cid:3) Enhanced focus on safety to
eliminate fatalities and reduce
safety-related stoppages
(cid:2)(cid:3) Stronger focus on mining quality
through reduced underground
dilution and gold loss
(cid:2)(cid:3) Optimisation of reef and waste
processing to reduce ore
re-handling costs and extract
incremental ounces
(cid:2)(cid:3) Maintenance of capital
expenditure on definition drilling
to minimise geological and
grade risk
(cid:2)(cid:3) Extension of methane extraction
to Beatrix West and completion of
the energy generation feasibility
study for the Beatrix Methane
Project (p68)
Production, development and
NCE margin
During 2011, Beatrix produced
347,000 ounces (2010: 377,000
ounces) – marginally short of its
production target. The stability of
its performance was temporarily
undermined by a number of
factors, including:
(cid:2)(cid:3) The presence of smectite,
which impeded production at 4
Shaft – as well as a number of
equipment failures
(cid:2)(cid:3) Five lost days of production
in July as a result of industrial
action
(cid:2)(cid:3) An increase in fatality-related
safety stoppages (as well as a
number of localised stoppages),
which resulted in the loss of
5,500 ounces of production
In an effort to address the increase
in fall-of-ground fatalities at the mine
we installed in-stope roof bolting
at 1, 2 and 3 Shafts and ‘blast-on
props’ at 4 Shaft.
Underground tonnes milled totaled
2.34 million tonnes at a yield of 4.4
g/t, due to a low mine call factor.
Various initiatives to improve the
mine call factor, including improved
fragmentation and water control, are
being implemented. A change in
explosives during the fourth quarter
resulted in a marked improvement
in fragmentation. Furthermore all
hydropower drilling machines at
the North Section were fitted with
connections to capture 60% of the
water used during drilling. A total
of 1.48 million surface tonnes were
milled at a yield of 0.3 g/t.
Total main development for 2011
was 23.4km, of which 5.7km was
on-reef – returning a value of
1,237 cmg/t.
Operating costs remained relatively
steady, but were impacted by the
28% annual increase in electricity
prices as well as the annual
wage increase. This was partially
off-set by strong cost controls –
including a particular focus on
energy efficiency. In addition, high
gold prices mean we have been
able to process low grade surface
stockpiles profitably. As a result, the
mine’s NCE margin improved from
11% to 25%.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
86
Optimising our operations
3.6.5 Operation
overview: South Deep
South Deep is a long-life, deep-level
mechanised gold mine operating
at between 2,000 and 3,000 meters
below surface. The mine, which is
still undergoing development, was
acquired by Gold Fields in 2006
and is located 45km south-west of
Johannesburg. South Deep is one
of the greatest undeveloped ore
bodies in the world.
Performance in 2011
Overview
Production at South Deep was
at similar levels to 2010. Notable
achievements in 2011 include:
(cid:2)(cid:3) A 15% increase in managed
Mineral Reserves to 39.6 million
ounces (Dec 2010: 34.5 million)
(cid:2)(cid:3) Completion of the Centralised
Tailings Storage Facility
(p64-65) and the first deposition
of tailings
(cid:2)(cid:3) Completion of the sinking of the
Ventilation Shaft
Figure 3.42: Key operating statistics South Deep
Key operating statistics
2011
2010
2009
2008
2007
Gold produced –
attributable (kg)
Gold produced –
attributable (‘000oz)
8,491
8,524
7,373
5,124
8,630
273
274
237
165
278
Total cash cost (R/kg)
249,146
215,157
183,358
226,776
138,944
Total cash cost (US$/oz)
1,073
914
677
860
614
Notional Cash Expenditure
(NCE) (R/kg)
Notional Cash Expenditure
(NCE) (US$/oz)
485,314
431,335
379,004
403,044
214,629
2,091
1,833
1,398
1,529
948
Gold price (R/kg)
363,538
288,022
259,921
231,187
156,899
Gold price (US$/oz)
Operating profit (Rm)
1,566
1,224
948
584
959
509
877
-24
693
120
Operating costs (Rm)
2,138
1,871
1,408
1,209
1,242
Operating margin (%)
NCE margin (%)
31
-34
24
-50
27
-46
-2
-74
9
-37
Figure 3.43: Key sustainability statistics South Deep
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (Rm)
Total taxation and royalties paid (US$m)
Employee wages and benefits (Rm)
15
2
934
0
0
0
0
0
0
742
565
578
Total employees
3,503
3,077
2,683
2,488
(cid:2)(cid:3) Innovative installation of the
award-winning A-frame headgear
at the Vent Shaft (p55, online)
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
Cyanide consumption ('000 tonnes)
(cid:2)(cid:3) Completion of 1 million fatality
free shifts in August 2011
CO2-e emissions ('000 tonnes) (Scope 1&2)
Energy consumption (TJ)
Water withdrawal (million liters)
0.04
1.67
0.81
546.7
2,092
4,674
0.07
2.87
0.55
572.5
2,171
2,926
0.08
2.74
0.47
559.1
2,039
2,770
0.94
12.45
0.76
463.0
1,719
3,870
(cid:2)(cid:3) Progress in the implementation
of South Deep’s Social and
Labour Plan
In 2011, we invested a total of
R1.98 billion (US$275 million) in
the development of South Deep,
which is on-schedule in all key
areas. For example, development
below 95 Level exceeded the 2011
operational plan by 3% by the end
of the year. Progress has been
supported by continual re-modelling
of the ore-body to enhance mine
design, improved scheduling, the
application of our rigorous Capital
Investment Framework, as well as
full mechanisation.
Figure 3.44: Mineral Resources and Mineral Reserves South Deep
Mineral Resources and Mineral Reserves
South Deep
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
2011
% of Group total
75.22
36.58
35%
45%
The completion of the Vent Shaft
to enhance our hoisting capacity
remains on-track for commissioning
by the second half of 2012. In 2011,
we completed the final portion of
shaft sinking from 100a Level to 110
Level – with commissioning on-
track for mid-2012. This will add the
substantial new hoisting capacity
needed to boost future production.
This year also saw the completion
of the head gear at the Vent Shaft,
using one of the largest fabricated
steel head gear frames in the world.
This marked the completion of
our ‘early lift’ strategy and de-
bottlenecked final shaft construction
and commissioning activities
scheduled for 2012.
We also initiated the expansion
of the South Deep Metallurgical
Plant, which is being constructed
on an accelerated schedule – with
commissioning planned for the
second half of 2012. This will
increase capacity from 220,000 to
330,000 tonnes per month.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
87
Optimising our operations
Figure 3.45: Capital projects progress at South Deep
Major progress on key infrastructure: On budget and on time
2010
2011
2012E
2013E
2014E
2015E
Status
94 Level Refrigeration Plant
Twin Vent Shaft Deepening
Tailings Storage Facility
Plant Expansion
Backfill Infrastructure
New Mine Development
Although there have been delays
around the Full Plant Tailings (FPT)
backfill project, these are not
expected to have a material impact
as there is excess capacity at the
Classified Cycloned Tailings backfill.
The first FPT backfill placement is
due in late-2012. We are intensifying
our monitoring of the FPT backfill
project to avoid further delays.
Production, development and
NCE margin
Production was maintained at
273,000 ounces (2010: 274,000) –
largely as a result of lower grades
of ore mined and processed. This
was short of our target, though we
are confident of achieving an annual
production run-rate for South Deep
of 700,000 ounces by end-2015.
Production build-up was slower
than anticipated due to delays in
the application of the de-stress
methodology that is required to open
up the ore body. This was largely
due to shortfalls in the availability
and utilisation of the mechanised
fleet and occasional shortages
of relevant skills. Plans are in
place to augment existing on-site
training with a dedicated surface
training centre for operators and
maintenance personnel, which will
be completed in 2012. Furthermore,
additional underground workshops
should be ready by early 2013.
Furthermore, as with our other
operations in South Africa, South
Deep lost five days of production
as a result of industrial action in
July 2011.
During 2011, underground reef
tonnes processed increased by
12% to 1.6 million tonnes. The
underground yield decreased
from 4.8 g/t in 2010 to 4 g/t in
2011, primarily due to increased
infrastructure development
through the lower grade reefs. This
development was necessary to
access additional de-stress mining
projects and to provide excavations
for the movement of ore to the new
mine area.
Development increased from
10,848 meters in 2010 to 12,018
meters in 2011. New mine capital
development in Phase 1, sub 95
level, increased from 3,384 meters
to 4,284 meters, development in the
current mine areas above 95 level
improved from 6 570 meters to 6,730
meters and vertical development
was extended from 894 meters to
1,004 meters. Operational costs at
the mine increased during 2011.
This reflected the carrying out of
maintenance work early in the year,
a 28% increase in annual electricity
prices, as well as increased costs
associated with the maintenance of
mechanised equipment.
As expected, South Deep’s NCE
margin remained negative at
–34% due to the significant capital
investment that is still taking place at
the mine. Nonetheless, this was an
improvement on 2010, when it was
at -50%.
Commissioned
On-track
Commissioned
On-track
On-track
On-going
We expect South Deep to be cash
positive during 2013 (at current gold
prices), as production increases
and the capital development phase
is completed.
Outlook for 2012
We plan for South Deep to produce
between 305,500 and 328,000
ounces of gold at an NCE of
US$2,090/oz and a total cash cost
of US$1,030/oz. This will rely on:
(cid:2)(cid:3) The achievement of targeted
levels of de-stress mining
(cid:2)(cid:3) Continued sub-95-level
development, with a target of
about 4,500 meters a year
(cid:2)(cid:3) Commissioning of the Vent
Shaft to gradually build-up to
full hoisting capacity of 195,000
tonnes a month. This will raise the
combined ore-hoisting capacity
of South Deep’s three shafts to
330,000 tonnes a month
(cid:2)(cid:3) Commissioning of the expanded
South Deep Metallurgical Plant to
mill 330,000 tonnes per month
(cid:2)(cid:3) Establishment of an on-site
mechanised mining training
centre
(cid:2)(cid:3) Completion of the FPT
backfill project
The removal of hoisting, milling
and backfill constraints in 2012
will eliminate key bottlenecks
– and will help ensure there is
sufficient infrastructure, ventilation
and cooling in place to ramp-up
production in the next three years to
deliver 330,000 tonnes per month to
the mill.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
88
Optimising our operations
3.7 Regional overview:
South America
3.7.1
Introduction
Our South America region currently
has only one operation, the Cerro
Corona copper and gold mine, in
which we hold a 98.5% interest
through our subsidiary company
Gold Fields La Cima S.A.A. This
follows an offer to minorities at
the beginning of 2011 when our
shareholding in La Cima was 80.7%
(p118). La Cima remains separately
listed on the Lima Stock Exchange.
Peru is also home to our
Chucapaca advanced exploration
project, which is located in the south
of the country. This project is
being managed by our subsidiary
exploration company Canteras del
Hallazgo S.A.C., in which we hold a
51% interest and Peruvian mining
group Buenaventura holds a
49% interest.
It is expected that we will reach a
development decision on Chucapaca
in 2012. In anticipation of this
decision, we are implementing an
extensive, early-stage community
engagement and socio-economic
plan to gain the support of
surrounding communities.
Opportunities
(cid:2)(cid:3) Ongoing potential to convert
Mineral Resources into Mineral
Reserves at Cerro Corona
(cid:2)(cid:3) Well-established and supportive
relations with local stakeholders
at Chucapaca and Cerro Corona
(cid:2)(cid:3) Continued government
promotion of mining investment
in South America’s fastest
growing economy
u
r
e
P
,
a
n
o
r
o
C
o
r
r
e
C
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Figure 3.46: Attributable gold
equivalent production (’000oz)
6
5
3
8
2
3
8
6
2
500
400
300
200
100
0
6
0
2008
2009
2010
2011
Figure 3.47: South America region
NCE margin (%)
0
6
6
5
80
60
50
40
30
20
10
0
5
3
7
3
1
-
-137%
2008
2009
2010
2011
Figure 3.48: LTIFR1
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
1
2
0
.
2
3
0
.
0
0
0
.
8
1
0
.
2008
2009
2010
2011
1 Restatement – figure for 2009 previously
reported as 0.00. See p4 for explanation
89
Optimising our operations
3.7.2 Top 10 South America region heat map
The heat map below sets out the top 10 South America region risks, as identified through our Enterprise Risk
Management (ERM) process (p36-37).
Maximum
Increased tax burden and regulatory scrutiny
Turnover of qualified employees
1
2
3
Increased social and political instability
y
t
i
r
e
v
e
S
Erosion of our NCE margin as a result of rising unit costs
4
5
Road traffic accidents affecting employees, contractors and communities
Dynamic legislative environment and the replacement of state officials
Contractor non-compliance with relevant Gold Fields
labour requirements
9
10
Potential security threats to executive personnel
8
7
6
Dependency on limited pool of local suppliers and contractors
Increased government auditing of the mining sector
Minimum
Probability
Maximum
Risk mitigating strategies
1
(cid:2) Direct engagement with government
2
3
4
5
6
7
8
(cid:2) Participation in industry engagement efforts through the Chamber of Mines
(cid:2) Development of a dedicated talent management programme with Group support
(cid:2) Focus on the maintenance of a strong Employee Value Proposition
(cid:2) Ongoing implementation of high-impact socio-economic initiatives
(cid:2) Enhanced focus on transparency around – and delivery of – our socio-economic commitments
(cid:2) Implementation of cost containment initiatives
(cid:2) Renewed negotiations with contractors
(cid:2) Implementation of road safety training, as well as the monitoring of driving behaviour and road conditions
(cid:2) Implementation of accident prevention and mitigation programmes
(cid:2) Increased focus on internal auditing to pre-empt compliance with regulatory requirements
(cid:2) Enhanced analysis and awareness-raising around evolving regulatory requirements
(cid:2) Renegotiation of contracts and supplier training
(cid:2) Ongoing market research and identification of additional suppliers of key materials and services
(cid:2) Enhanced co-ordination with authorities
(cid:2) Ongoing and proactive participation in relevant industry associations
9
(cid:2) Implementation of preventative contractor reviews to avoid non-compliance
(cid:2) Ongoing local and external auditing of contractors
10
(cid:2) Implementation of a threat-awareness programme for key personnel
(cid:2) Implementation of the Regional Crisis Management Team
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
90
Optimising our operations
3.7.3 Operation
overview: Cerro Corona
Cerro Corona, which is currently the
most profitable mine in our Group,
is located in the highest part of the
western Cordillera of the Andes
Mountains in northern Peru and
produces gold and copper from
a large open pit. The copper-gold
concentrate is trucked to the port
of Salaverry for export.
Performance in 2011
Overview
Notable achievements relating to the
Cerro Corona mine in 2011 include:
Figure 3.49: Key operating statistics Cerro Corona
Key operating statistics
2011
2010
2009
2008
2007
Gold produced – attributable
equivalent (‘000oz)
Total cash cost (US$/oz)
Notional Cash Expenditure (NCE) (US$/oz)
Gold price (US$/oz)
Operating profit (US$m)
Operating costs (US$m)
Operating margin (%)
NCE margin (%)
356
328
268
60
n/a
437
592
363
532
1,463
1,201
403
157
72
60
341
146
71
56
361
626
970
206
122
62
35
380
1,560
658
19
32
43
-137
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Figure 3.50: Key sustainability statistics Cerro Corona
Key sustainability statistics
2011
2010
2009
2008
(cid:2)(cid:3) A first place award in the open-
cast Peruvian Annual Mining
Safety competition for the second
year running
Total taxation and royalties paid (US$m)
Employee wages and benefits (US$m)
Total employees
Fatal Injury Frequency Rate (FIFR)
(cid:2)(cid:3) Completion of the third raise of
Lost Time Injury Frequency Rate (LTIFR)
our tailings dam
(cid:2)(cid:3) A 15% increase in the Mineral
Reserves to 6.1 million gold
equivalent ounces
Cyanide consumption ('000 tonnes)
CO2-e emissions ('000 tonnes) (Scope 1&2)
Energy consumption (TJ)
Water withdrawal (million liters)
126
49
367
0
0.18
0.13
70.8
1,006
3,582
73
33
350
0
0.00
0.14
49.4
895
574
46
22
337
0
1
9
n/a
0
0.321
0.21
0.08
22.8
425
187
n/a
n/a
n/a
n/a
This recently established mine
continues to perform strongly.
In 2011, it exceeded its design
capacity and base case planning
in the following respects:
(cid:2)(cid:3) Plant throughput of 802 tonnes
per hour compared to a design
capacity of 775 tonnes/hour
(cid:2)(cid:3) Plant availability that is just
ahead of the design availability
of 91.32%
(cid:2)(cid:3) Gold equivalent production
that is ahead of budget
Figure 3.51: Mineral Resources and Mineral Reserves Cerro Corona
Mineral Resources and Mineral Reserves
Cerro Corona
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
2011
7.56
6.01
% of Group total
4%
7%
During 2011, the mine benefited
from a processing optimisation
programme initiated in late 2010.
Results show that the programme
– which included improved reagent
dosing – increased recoveries by
2%-3%. Recovery is currently 65%
for gold and 83% for copper.
A number of new projects
have been implemented by our
Metallurgical Task Team to further
improve recoveries and throughput.
These include improved mechanical
slurry conditioning, gravimetric
concentration and automatic
reagent dosing.
A total of 15,000 meters of infill
drilling has been carried out on the
mine since 2010, with special focus
on the confirmation of mineral
reserves at depth. In addition, we
investigated the feasibility of an
expansion of our tailings and waste
storage capacity, which resulted
in an increase in the Mineral
Reserves from 5.3 million ounces
to 6.1 million ounces during 2011.
Cerro Corona is OHSAS 18001 and
ISO 14001 certified and compliant
with the International Cyanide
Management Code.
1 Restatement – figure previously reported as 0.00. See p4 for explanation
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
91
Optimising our operations
u
r
e
P
,
a
n
o
r
o
C
o
r
r
e
C
Production, development and
NCE margin
Managed production at Cerro
Corona decreased by 6% to 383,000
gold equivalent ounces (2010:
406,000 ounces). This comprised
gold production of 161,000 ounces
(2010: 152,000) and copper
production of 38,641 tonnes
(2010: 41,402). Despite an increase
in the absolute amount of gold
produced, the copper price fell
relative to the previous year –
reducing gold equivalent production.
Attributable production, however,
was up from 328,000 ounces to
356,000 ounces as a result of the
buyout of minority shareholders.
During 2011 a total of 12.59 million
tonnes were mined compared with
13.24 million tonnes in 2010, in line
with the operating plan. At 6.58
million tonnes, ore mined during
2011 was 6% up on the previous
year, while gold and copper yields
during 2011 were similar to the
previous year at 0.8 g/t and
0.6 g/t respectively.
The mine’s NCE margin increased
from 56% in 2010 to 60% in 2011.
Cerro Corona continues to have
the highest NCE margin of all our
operations – as well as the lowest
costs (at US$592/oz NCE). As a
result, it remains a major cash-
contributor to the Group.
Outlook for 2012
In 2012, we plan to produce
between 325,000 and 350,000
gold equivalent ounces at an NCE
of U$780/eq-oz and cash costs of
US$515/eq-oz. This plan will rely on:
(cid:2)(cid:3) Ongoing process plant
optimisation
(cid:2)(cid:3) Completion of a feasibility study
for a heap leach process for the
existing stockpiled oxide ores
(cid:2)(cid:3) Investigation of a potential
expansion at our sulphide plant
(cid:2)(cid:3) Implementation of a drilling
programme to support the future
expansion of Cerro Corona
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
92
Optimising our operations
3.8 Regional overview:
West Africa
Attempts to improve our cost
structure were supported by:
Figure 3.52: Attributable gold
production (’000oz)
3.8.1
Introduction
Production in the West Africa
region is focused on our Damang
and Tarkwa open pit mines, which
are located near one another in
south-western Ghana. Tarkwa is
Africa’s largest open pit gold mine
by production, with a substantial
and well-defined Mineral Resource
position. Damang, which is smaller,
is expected to play an increasingly
important role due to successful
near-mine exploration.
Gold Fields has a major exploration
prospect at Yanfolila in Mali (p111).
A further increase in its defined
Mineral Resources and completion
of an updated scoping study are
expected by the end of 2012.
Performance in 2011
Overview
During 2011, we completed a
US$667 million acquisition of
IAMGOLD’s 18.9% indirect stake
in the Tarkwa and Damang mines.
This raised our interest in both
operations from 71.1% to 90% – with
the Government of Ghana holding
the balance.
We maintained our focus on growing
production in line with our 2015
Group Goal, whilst optimising
our NCE margin. This is within a
context in which we are seeking to
ensure the long-term commercial
sustainability of our operations in
Ghana, through:
(cid:2)(cid:3) Growth of our Mineral
Resources and Mineral
Reserves at Damang
(cid:2)(cid:3) Optimisation of production and
leveraging of assets at Tarkwa
The cost base of our Ghanaian
operations is facing a number of
upward pressures, including rising
input costs (including labour), an
increase in royalties from 3% to 5%
and a range of new taxes on the
mining sector (p155-156).
(cid:2)(cid:3) The ‘feed-through’ of existing
Business Process Re-engineering
(BPR) efforts at both mines (p49)
(cid:2)(cid:3) The entrenchment of owner-
maintenance at Tarkwa (p94)
(cid:2)(cid:3) The introduction of owner mining
and the entrenchment of owner-
maintenance at Damang (p96)
Damang and Tarkwa are OHSAS
18001 and ISO 14001 certified and
compliant with the International
Cyanide Management Code.
Production and NCE margin
Managed production in West Africa
declined by 3% in 2011 to 935,000
ounces (2010: 963,000 ounces) but
attributable production improved
by 9% to 750,000 ounces (2010:
685,000 ounces), due to the buyout
of the minorities. Over the same
period, the regional NCE margin
improved to 39% (2010: 29%).
Outlook for 2012
The regional target of 1 million
ounces in production or
development by 2015 remains
our core objective. In 2012, we
plan to achieve managed gold
output of between 930,000 and
970,000 ounces at a total cash
cost of US$700/oz and an NCE of
US$1,091/oz. In particular, we are
planning to:
(cid:2)(cid:3) Continue near-mine exploration
at Damang
(cid:2)(cid:3) Continued drilling at Yanfolila to
establish the minimum Mineral
Resource of 1.5 million ounces
required for project development
(cid:2)(cid:3) Implement a drilling programme
to further define the cut-back
potential of Tarkwa’s active pits
Opportunities
(cid:2)(cid:3) A strong social licence to operate
amongst local communities
(cid:2)(cid:3) Potential for further production
growth through near-mine
exploration and development
at Damang
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
800
700
600
500
400
300
200
100
0
0
5
7
5
8
6
5
9
5
7
8
5
6
1
6
2007 2008 2009 2010 2011
Figure 3.53: NCE margin (%)
50
45
40
35
30
25
20
15
10
5
0
-5
9
3
9
2
6
2
5
3
-
2007 2008 2009 2010 2011
Figure 3.54: LTIFR1
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
7
2
0
.
4
1
0
.
9
4
0
.
1
2
0
.
2008
2009
2010
2011
1 Restatement – figure for 2010 previously
reported as 0.44. See p4 for explanation
93
Optimising our operations
3.8.2 Top 10 West Africa region heat map
The heat map below sets out the top 10 West Africa region risks, as identified through our Enterprise Risk
Management (ERM) process (p36-37).
Maximum
Hardening fiscal regime
Increasing cost pressures and the ‘sterilisation’ of ounces
Domestic skills shortages and the retention of national staff
6
3
Delayed environmental permitting processes
Sub-optimal management of input supply and demand
1
2
y
t
i
r
e
v
e
S
8
4
Increased mine waste stripping
5
Heightened socio-economic expectations amongst stakeholders
Rising energy costs and energy insecurity
Sub-optimal execution of capital projects
9
7
Non-payment of tax refunds
10
Minimum
Probability
Maximum
Risk mitigating strategies
1
2
3
(cid:2) Enhanced communication of the national and local economic benefits delivered by Gold Fields
(cid:2) Direct engagement of government in support of a ‘level fiscal playing field’
(cid:2) Ongoing efforts to maintain transparent and constructive relations with the permitting authorities
(cid:2) Implementation of employee development programmes to enhance long-term incentives
(cid:2) Improved remuneration and benefits, as well as regular surveys of sector norms
4
(cid:2) Investment in support infrastructure to ensure heavy mining equipment is maintained to required standards
(cid:2) Ongoing application of Business Process Re-engineering (BPR) to reduce costs
(cid:2) Implementation of heavy mining equipment ‘swing units’ to maintain production capacity during major rebuilds
5
(cid:2) Enhancement of internal sustainable development structures and operating models
(cid:2) Ongoing, proactive engagement with communities, local officials and other stakeholders
(cid:2) Compliance to environmental monitoring requirements by regulators
6
(cid:2) Implementation of BPR to reduce costs
(cid:2) Implementation of energy efficiency measures
(cid:2) Enhancement of our capital project management approach
7
8
(cid:2) Comprehensive review of project execution processes and performance
(cid:2) Enhancement of capital project management approach
(cid:2) Enhancement of supply chain management structures
(cid:2) Regular review of minimum/maximum inventory levels
9
(cid:2) Ongoing identification of additional/alternative energy supply options
(cid:2) Implementation of energy efficiency measures
(cid:2) Ongoing monitoring of the domestic power sector
10
(cid:2) Engagement of the Government of Ghana through the Chamber of Mines
(cid:2) Direct engagement of the Government of Ghana in support of an equitable fiscal environment
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
94
Optimising our operations
3.8.3 Operation
overview: Tarkwa
Our Tarkwa mine is located in south-
western Ghana, about 300km west
of Accra. It consists of six open
pits, two heap leach facilities and a
CIL plant. The operation is currently
mining multiple-reef horizons from
open pits and there is potential for
underground mining in the future.
Performance in 2011
Overview
Notable achievements in
2011 include:
(cid:2)(cid:3) Completion of transition to
owner maintenance
(cid:2)(cid:3) Achieving stable throughput of
11.4 million tonnes a year at the
CIL plant
(cid:2)(cid:3) A world class CIL recovery rate
of 97%
(cid:2)(cid:3) Installation of tertiary crushers at
the North Heap Leach facility to
maintain output
(cid:2)(cid:3) Ongoing implementation of BPR,
achieving material cost savings
and efficiency improvements that
largely mitigated the impact of
higher fuel and power costs
During 2011, we completed
a number of processing
enhancements at Tarkwa to help
maintain its status as a world-
class gold mine. This included the
commissioning of three new tertiary
crushers at the North Heap Leach
Facility. Along with efforts to reduce
crushing and process downtime,
this reduced bottlenecks around
our existing processing plants and
improved the ability of the mine to
process higher grade, hard ore.
These crushers produce a finer
product size, which help maintain
existing recoveries and throughput.
Figure 3.55: Key operating statistics Tarkwa
Key operating statistics
2011
2010
2009
2008
2007
Gold produced – attributable (‘000oz)
Total cash cost (US$/oz)
Notional Cash Expenditure (NCE) (US$/oz)
Gold price (US$/oz)
Operating profit (US$m)
Operating costs (US$m)
Operating margin (%)
NCE margin (%)
576
556
913
523
573
831
1,565
1,223
752
436
67
42
480
416
53
32
473
488
719
966
320
342
50
26
447
494
926
863
231
324
43
-7
467
373
637
695
212
259
46
8
Figure 3.56: Key sustainability statistics Tarkwa
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (US$m)
Employee wages and benefits (US$m)
202
55
110
45
31
36
37
32
Total employees
2,575
2,073
1,917
1,748
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
Cyanide consumption ('000 tonnes)
CO2-e emissions ('000 tonnes) (Scope 1&2)
Energy consumption (TJ)
Water withdrawal (million liters)
0.05
0.21
14.2
270.5
3,853
3,684
0.06
0.43
12.2
246.7
3,743
4,610
0.00
0.13
13.0
225.2
3,397
6,023
0.00
0.31
10.1
215.2
3,130
4,528
Figure 3.57: Mineral Resources and Mineral Reserves Tarkwa
Mineral Resources and Mineral Reserves Tarkwa
2011
% of Group total
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
13.61
9.31
6%
12%
We also ‘bedded-down’ the
piloting of High Pressure Grinding
Roll (HPGR) technology at our
South Heap Leach Circuit, which
increased our recovery by between
5% and 10% and has added 50,000
ounces of gold to our 2011 output.
As a result of these strong results,
we are evaluating the application of
this technology to the North Heap
Leach Circuit, where it is expected
to further enhance recovery. Plans
are also in place to evaluate the
potential use of this technology to
reprocess the decommissioned
South Heap Leach pads. Based on
heap leach performance records
these are believed to contain
between 400,000 and 500,000
ounces of residual gold.
In addition, construction was
completed on Tarkwa’s TSF3
tailings storage facility, which will
support expanded production at
the mine by addressing increased
CIL throughput.
We also implemented a range of
BPR initiatives at Tarkwa to address
higher input costs. These included:
(cid:2)(cid:3) Suspension of contract waste
mining as part of an overall move
to full owner-operation
(cid:2)(cid:3) Removal of operational
bottlenecks through improved
utilisation and availability
of mining equipment. This
maximised the supply of high
quality ore to the processing
plants and improved capital
strip tonnages
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
(cid:2)(cid:3) Optimisation of the mining fleet
and fuel consumption, including
through the implementation of
localised ‘satellite’ fuelling, fuel
monitoring systems, vehicle
optimisation systems and vehicle
tracking and management
systems. These actions helped
improve truck availability by 8%
(cid:2)(cid:3) Enhancement of drill yield
through the use of more powerful
explosives, improved drill patterns
and higher blasted capital waste
bench heights
(cid:2)(cid:3) Strategic sourcing, as well as
the renegotiation of supply
agreements relating to
chemicals, explosives, grinding
media and mill liners
Production, development and
NCE margin
In 2011, managed production at
Tarkwa dropped to 717,000 ounces
(2010: 735,000 ounces), while
attributable production improved
by 10% to 576,000 ounces (2010:
523,000 ounces) as a result of
the larger shareholding owned
by Gold Fields. The decline in
managed production was due to
the harder ore blend, power supply
interruptions and extensive rainfall
that slowed down mining activities.
Production was also temporarily
affected by flooding in the high-
grade Teberebie pit, which has
been fitted with enhanced pump
capacity as a result. The use
of six open pits – as well as the
stockpiling of ore from the Teberebie
pit – means we have considerable
operational flexibility in this respect.
Nonetheless, a further period of
heavy rainfall in the third quarter
had a negative impact on planned
running hours, which had a marginal
effect on production.
Total tonnes mined, including
capital stripping, decreased from
137 million tonnes in 2010 to 115.8
million tonnes in 2011 – largely as
a result of the haul fleet rebuild
programme. Ore mined also
decreased slightly from 22.2 million
tonnes to 21.9 million tonnes, while
the total strip ratio dropped from 5.2
to 4.3 in 2011.
CIL plant throughput increased
slightly from 11.3 million tonnes
to 11.4 million tonnes, leading to
higher gold production from the
plant of 518,000 ounces in 2011
(2010: 508,900 ounces). The feed
to the North and South Heap Leach
decreased from 12.4 million tonnes
in 2010 to 11.7 million tonnes in
2011 due to a harder ore blend. The
North Heap Leach tertiary crushing
circuit upgrade was commissioned
in May 2011. Gold production at
the South Heap Leach section
increased from 46,800 ounces to
51,800 ounces, but gold output at
the North Heap Leach section fell
from 179,300 ounces to 147,500
ounces during 2011.
During 2011, operational costs
increased as a result of escalating
fuel and electricity prices, but
higher gold prices and the benefit
of cost savings initiatives helped
the mine raise its NCE margin to
42% from 32% in 2010. Such efforts
will do much to ensure the ongoing
commercial sustainability of
Tarkwa’s world-class deposit.
Outlook for 2012
In 2012, we plan to produce
between 720,000 and 750,000
ounces at an NCE of US$1,050/oz
and a total cash cost of US$675/oz.
95
Optimising our operations
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This plan will rely on:
(cid:2)(cid:3) Successful commissioning and
ramp-up of the CIL secondary
crusher in the first quarter
of 2012
(cid:2)(cid:3) Improved equipment availability
and utilisation
(cid:2)(cid:3) Continued success of the BPR
programme, which is now well
embedded in the operation
(cid:2)(cid:3) Stable fuel and power prices
(cid:2)(cid:3) A positive outcome in negotiations
with the Government of Ghana
around the new tax regime
We expect to further enhance the
long-term sustainability of Tarkwa
by adding a secondary crusher to
our CIL plant in early 2012. This
would enhance the plant’s ability
to process significantly harder ore
over the remaining life-of-mine at the
planned rate of 12.3 million tonnes
per year.
We are working to secure additional
tailings storage capacity to deal
with the increased volume of tailings
this will produce. We are also
examining other options such as
the co-disposal of tailings and in-pit
tailings deposition.
Beyond this, we are examining
how to leverage future processing
options, which along with near-mine
exploration, will help guarantee the
long-term future of the mine. This
potentially includes increased focus
on CIL processing in favour of heap
leaching to raise recovery rates –
and so address increasing volumes
of lower grade, harder rock.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
96
Optimising our operations
3.8.4 Operation
overview: Damang
Our Damang mine is located 30km
north of our neighbouring Tarkwa
mine. It consists of multiple open
pits, surface stockpiles and a
CIL plant.
Performance in 2011
Overview
Notable achievements in
2011 include:
(cid:2)(cid:3) Ongoing drilling, which increased
the Mineral Reserves at Damang
from 2.1 million ounces to 3.4
million ounces and delivered a
new Mineral Resource position
of 10 million ounces
(cid:2)(cid:3) Delivery of the proof of concept
for the Damang Super Pit, an
increase in the Mineral Reserves
for the project from 1.1 million
ounces to 2.5 million ounces
and commencement of the pre-
feasibility study. The successful
development of the project could
increase the life of Damang from
2024 to 2029
(cid:2)(cid:3) Implementation of owner
mining, which will support future
production expansion whilst
reducing long-term costs
(cid:2)(cid:3) Completion of our extensive
capital strip programme, which
has increased flexibility and
lays the ground for future
production growth
(cid:2)(cid:3) The maintenance of stable
secondary crusher availability
to allow for increased hard-
ore processing
Production at Damang was supported
by the installation of a secondary
crusher in 2010. This improved
the mine’s ability to process hard
ore – enhancing both its flexibility
and output. Because this pushed
our crushing output beyond our
processing capacity, we examined
how we could further enhance the
plant. As a result, we carried out
optimisation work on the SAG mill liner
design and pebble ports.
Figure 3.58: Key operating statistics Damang
Key operating statistics
2011
2010
2009
2008
2007
Gold produced – attributable (‘000oz)
Total cash cost (US$/oz)
174
701
Notional Cash Expenditure (NCE) (US$/oz)
1,056
162
660
973
Gold price (US$/oz)
Operating profit (US$m)
Operating costs (US$m)
Operating margin (%)
NCE margin (%)
1,565
1,230
201
142
59
33
134
146
48
21
144
635
698
963
71
122
36
28
140
629
783
863
45
134
26
9
128
520
735
696
31
99
25
-6
Figure 3.59: Key sustainability statistics Damang
Key sustainability statistics
2011
2010
2009
2008
Total taxation and royalties paid (US$m)
Employee wages and benefits (US$m)
Total employees
Fatal Injury Frequency Rate (FIFR)
Lost Time Injury Frequency Rate (LTIFR)
Cyanide consumption ('000 tonnes)
CO2-e emissions ('000 tonnes) (Scope 1&2)
Energy consumption (TJ)
Water withdrawal (million liters)
45
17
969
0
0.19
1.89
90.3
1,303
5,127
39
14
463
0
0.641
2.26
63.7
1,046
3,011
16
10
411
0
0.17
2.24
59.8
976
906
8
9
414
0
0.16
1.78
71.0
1,122
436
Figure 3.60: Mineral Resources and Mineral Reserves Damang
Mineral Resources and Mineral Reserves Damang
2011
% of Group total
Attributable Mineral Resources (million oz)
Attributable Mineral Reserves (million oz)
9.04
3.05
4%
4%
Production would potentially have
been even higher, but for the
temporary ‘sterilisation’ of high-
grade ore around the East Ramp
on the Main Cut-Back, due to safety
risks associated with potential
rock-fall. `The East Ramp, which
was completed in December 2011,
will allow access to additional ore
supply by increasing the mining
width. In addition, third quarter
production was impacted by power
supply interruptions linked to the
Electricity Company of Ghana
(ECG). Our emergency power
station has since been refurbished
to minimise the impact of such
power outages – and the ECG
has provided assurance on future
supply reliability.
Damang’s strong production
performance was further supported
by our implementation of owner-
mining, which meant we were
able to effect a strong production
recovery – through, for example,
the alternative sourcing of ore and
flexibility improvements. In 2011,
we completed our transition to
owner-maintenance and expanded
our truck fleet from 18 to 24 – with
further growth to come in 2012.
During 2011, we fitted a ‘safe-start’
process to our mill at Damang,
following successful implementation
at Tarkwa in 2010. This will mitigate
the risk of ‘lock charges’, which can
potentially stop production for weeks.
1 Restatement – figure previously reported as 0.47. See p4 for explanation
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
97
Optimising our operations
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The mine also implemented a
range of BPR initiatives, including
improved truck-loading practices
and the optimisation of cycle times.
Production, development and
NCE margin
In 2011, managed production at
Damang dropped by 4% to 218,000
ounces (2010: 228,000 ounces), in
part due to a fall in mill throughput,
resulting from an unstable supply
of power. As a result of Gold Fields’
larger shareholding attributable
production rose by 7% to 174,000
ounces (2010: 162,000 ounces).
Total tonnes mined, including
capital stripping, increased to 23.5
million tonnes in 2011 (2010: 13.8
million tonnes, as the mining strip
programme was accelerated. Ore
mined also increased from 4.2
million tonnes to 4.8 million tonnes,
while the total strip ratio improved
from 2.2 to 3.9 in 2011.
At 4.9 million tonnes the tonnage
processed in 2011 was lower than
the 5.1 million tonnes achieved in
2010, as power interruptions led to
lower mill availability.
Operational costs fell during the
course of the year due to the
savings realised from owner-mining
and increased gold-in-mining
credit. This was partially offset by
increased fuel and electricity costs.
The NCE margin increased to 33%
from 21% in 2010 as a result of
higher gold prices received, as well
as lower operating costs.
Outlook for 2012
We plan to produce between
210,000 and 220,000 ounces of
gold at a total cash cost of US$785/
oz and NCE of US$1,230/oz. This
will rely on:
(cid:2)(cid:3) Successful implementation
of a four shift system to
improve productivity
(cid:2)(cid:3) An improvement in the
mechanical availability of our
mining fleet
(cid:2)(cid:3) An improvement in the mine call
factor from 89% to 92%
Beyond this, we plan to continue our
near-mine exploration and feasibility
studies to better define the Damang
Super Pit project, as well as growth
potential around the Greater
Damang area (p114-115).
Together with owner maintenance
and mining, our extensive capital
waste strip programme and ongoing
resource and reserve drilling we
will be well placed for the long-term
development of what looks like an
increasingly large ore body.
As a result, we are analysing the
benefits of a potential ramp-up
in processing between 2011 and
2015. This potentially includes the
upgrading of our existing plant, the
installation of a new processing
plant – or even the utilisation of
processing capacity at Tarkwa.
Our ability to pursue the expansion
of production at Damang is likely
to be impacted, however, by the
hardening fiscal environment in
Ghana. This includes an increase
in royalty rates from 3% to 5% in
April, as well as a 2012 budget that
looks set to raise the Corporate
Income Tax for the mining industry,
introduce a new Windfall Profit Tax
and tighten capital allowances
(p155-156). We are currently
assessing the implications of
these changes and engaging
with government with the hope
of negotiating a more favourable
tax regime.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
4. Growing Gold Fields
Growing Gold Fields is not only about increasing our production and
(cid:31)(cid:7)(cid:27)(cid:7)(cid:18)(cid:12)(cid:13)!(cid:7)(cid:15)(cid:20)+(cid:8)(cid:132)(cid:20)(cid:8)(cid:3)(cid:19)(cid:8)(cid:16)(cid:30)(cid:12)(cid:5)(cid:20)(cid:8)(cid:7)(cid:15)(cid:19)(cid:5)(cid:6)(cid:3)(cid:15)(cid:4)(cid:8)(cid:19)(cid:5)(cid:19)(cid:20)(cid:16)(cid:3)(cid:15)(cid:16)(cid:30)(cid:18)(cid:7)(cid:8)(cid:4)(cid:6)(cid:12)<(cid:20)(cid:23)(cid:8)(cid:3)(cid:15)(cid:8)(cid:12)(cid:5)(cid:6)(cid:8)(cid:13)(cid:6)(cid:12)(cid:14)(cid:20)(cid:19)#(cid:8)(cid:7)(cid:16)(cid:6)(cid:15)(cid:3)(cid:15)(cid:4)(cid:19)(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)
returns to shareholders on a per share basis – as well as our Mineral Resources
and Mineral Reserves. Furthermore, it is about augmenting our position
as a truly global mining company that has moved beyond its historical
base in South Africa.
In the medium-term, our target is to grow into a global gold producer with
the aim of having approximately 1 million gold equivalent ounces a year
in production or development in each of our Australasia, South America
and West Africa regions, and approximately 2 million ounces in the South
Africa region.
Our growth strategy is built on three key pillars:
(cid:21)(cid:8) Ongoing replacement and expansion of our Mineral Resources
and Mineral Reserves at our existing operations through
near-mine exploration
(cid:21)(cid:8) Growth of the Group’s Mineral Resources, Mineral Reserves and
production through the execution of our major advanced stage projects
in Finland, Ghana, Peru and the Philippines (p112-118)
(cid:21)(cid:8) Continued discoveries through highly effective and well-resourced
(cid:4)(cid:6)(cid:7)(cid:7)(cid:15)(cid:14)(cid:7)(cid:18)(cid:31)(cid:19)(cid:8)(cid:7)(cid:26)(cid:13)(cid:18)(cid:12)(cid:6)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)(cid:8)(cid:3)(cid:15)(cid:8)(cid:12)(cid:5)(cid:6)(cid:8)(cid:7)(cid:19)(cid:20)(cid:16)(cid:30)(cid:18)(cid:3)(cid:19)(cid:23)(cid:7)(cid:31)(cid:8)X(cid:5)(cid:19)(cid:20)(cid:6)(cid:16)(cid:18)(cid:16)(cid:19)(cid:3)(cid:16)#(cid:8)(cid:134)(cid:12)(cid:5)(cid:20)(cid:23)(cid:8)X!(cid:7)(cid:6)(cid:3)(cid:17)(cid:16)(cid:8)
and West Africa regions – and in highly prospective locations such as
Canada, Kyrgyzstan and the Philippines (p109-112)
In 2011, we bolstered our equity position in Cerro Corona through our
US$382 million purchase of minorities’ shares in Gold Fields La Cima
S.A.A. This took our economic interest from 80.7% to 98.5%. Likewise,
our US$677 million purchase of IAMGOLD’s 18.9% indirect stake in the
Damang and Tarkwa mines increased our holding to 90% (p118).1
1 The remaining 10% is held by the Government of Ghana
Contents
4. Growing Gold Fields
Sustainability and the new growth environment ...... Page 100
Expanding our growth pipeline ............................... Page 108
Mineral Resource and Mineral Reserve Statement . Page 119
Highlights
98.5%
Equity position in the Cerro Corona mine, Peru – following
purchase of minorities’ shares in Gold Fields La Cima S.A.A
40%
Ownership of the Far Southeast project, Philippines –
following third down-payment of US$110 million
80.6 Moz
Mineral Reserves as of 31 December 2011
(an increase of 4 million ounces)
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100
Growing Gold Fields
4.1 Sustainability and the
new growth environment
We believe that long-term,
sustainable and value-added
growth is best achieved through
exploration. While we are still
open to opportunities to acquire
producing or late stage projects,
this is not a core strategy and we
will be opportunistic in this area.
Our growth focus is largely organic,
which requires us to:
(cid:2)(cid:3) Proactively maintain and develop
our industry-leading, in-house
exploration expertise
(cid:2)(cid:3) Sustain a diversified and
aggressive exploration portfolio
(cid:2)(cid:3) Ensure we are well-equipped to
navigate potentially challenging
new operating environments
(cid:2)(cid:3) Effectively transition our resource
development and feasibility
projects into production
(cid:2)(cid:3) Selectively buy-out minorities
as this will offer us a greater
return on our investment at
these operations
The measure of success for this
approach will be the ongoing
expansion and diversification of
our Mineral Resources and Mineral
Reserves base. With respect to our
existing operations, this includes:
(cid:2)(cid:3) A significant increase in our
Group attributable Mineral
Reserves from 76.7 million
ounces in December 2010
to 80.6 million ounces in
December 2011
(cid:2)(cid:3) Raising our share of both Mineral
Reserves and Mineral Resources
at Tarkwa, Damang and Cerro
Corona after buying out minority
shareholders during 2011 (p118)
(cid:2)(cid:3) An increase in our managed
Mineral Reserves at Tarkwa,
Damang and Cerro Corona
Beyond this, growth has been most
marked with respect to:
Figure 4.1: Gold Fields
(cid:13)(cid:6)(cid:12)(cid:31)(cid:5)(cid:17)(cid:20)(cid:3)(cid:12)(cid:15)(cid:8)(cid:31)(cid:3)(cid:27)(cid:7)(cid:6)(cid:19)(cid:3)(cid:14)(cid:17)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)
(cid:2)(cid:3) A 5.0 million ounce increase in
Mineral Reserves at South Deep
(cid:2)(cid:3) The first time inclusion of 2.9
million ounces of Mineral
Reserves from the West Wits
Tailings Treatment Project (p64)
(cid:2)(cid:3) An increase in Mineral
Reserves for our Damang
mine from 1.1 million ounces
to 2.5 million ounces
(cid:2)(cid:3) A first-ever Inferred Mineral
Resource of 1,060 million pounds
copper declared for the Woodjam
Project in Canada (p110)
(cid:2)(cid:3) An increase in Mineral
Resources at our Chucapaca
project from 5.6 million gold
equivalent ounces to 7.6 million
gold equivalent ounces
Particularly strong growth is taking
place – or is due to take place
– outside the well-established
historical mining centres. These
new operating environments offer
potentially very rewarding but
complex growth opportunities.
As a result we place particular
emphasis on effective and proactive
risk management. This includes the
establishment and maintenance of
a strong social licence to operate,
based on close stakeholder
engagement and the generation of
shared benefits.
2008 production¹
0%
16%
22%
2011 production1
10%
19%
22%
2015 production Goal²
20%
62%
49%
40%
20%
20%
South Africa
West Africa
Australia
South America
2015 production Goal²
South Africa
Region
~ 2 Moz
Australasia
Region
~ 1 Moz
West Africa
Region
~ 1 Moz
South America
Region
~ 1 Moz
1 Attributable gold equivalent ounces
2 Goal of 5 million ounces in production
or development
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
4.1.1 Strategy
Figure 4.2: Gold Fields growth pipeline
101
Growing Gold Fields
Our overall growth strategy is to use
exploration to contribute towards our
Goal of having 5 million ounces a
year in production or development
by 2015 – and to expand our
presence beyond our historic
production base in South Africa.
More specifically, we aim to:
(cid:2)(cid:3) Grow our Mineral Reserves and
production on a per-share basis
(cid:2)(cid:3) Use our greenfields project
pipeline to contribute to our
2015 production/development
Goal, two-thirds of which is
to come from outside of our
South Africa region
(cid:2)(cid:3) Support organic development
and near-mine exploration in all
our operating regions
(cid:2)(cid:3) Pursue exceptional prospects
in a small number of
underexplored sites outside
of our operating regions
Our production growth will be
underpinned by our existing
operations, with our intent being to
maintain existing production levels
in the medium- to long-term as our
legacy mines in South Africa decline
after 3 to 5 years.
Growth Portfolio
Strong track-record of delivery
Cerro
Corona
Production
South Deep
Construction
Chucapaca
Feasibility
Far Southeast
Arctic Platinum
Pre-feasibility
Yanfolila
Woodjam
Talas
Scoping
Exploration projects in 13 Countries
Exploration
Developing five new mines
Figure 4.3: Indicative project delivery schedule
Indicative delivery timeline
2011
2012E
2013E
2014E
2015E
2016E
Our production growth will also be
underpinned by:
South Deep
750kozpa Au
Construct3
(cid:2)(cid:3) Continuing production ramp-up at
South Deep (p86-87)
Chucapaca
400 to 600kozpa Aueq
Explore4
Develop5
Construct
(cid:2)(cid:3) The leveraging of Cerro Corona’s
oxide project to increase
production (p91)
(cid:2)(cid:3) Bringing Damang’s Super Pit
project into production (p114-
115) subject to tax changes in
Ghana (p155-156)
Beyond this, we have three
additional resource development
and feasibility projects – in Finland,
Peru and the Philippines – that, once
operational, will significantly boost
Group production.
Damang Super Pit
400 to 500kozpa Au
Explore
Develop
Construct
Yanfolila
180 to 250kozpa Au
Explore
Arctic Platinum
300 to 400kozpa 2PGE+Au
Explore
Far Southeast
4 to 25Mtpa ore
Explore
Develop Construct
Develop
Construct
Develop
Construct
Exploration Pipeline
3 ‘Construct’ includes all construction activity until commissioning and handover to
operational teams
4 ‘Explore’ includes all exploration and study-related activity
5 ‘Develop’ includes all engineering, permitting, long lead orders and pre-construction activity
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
102
Growing Gold Fields
4.1.2 Approach
In 2011, we combined our
Exploration and our International
Capital Projects functions to form
the new Growth and International
Projects function. This aims
to deliver seamless project
development, from early exploration
through to operation.
It will do so whilst applying our
commitment that ‘all new projects
will be better than what we have’
– in terms of their operational,
sustainability and financial
performance.
The new function includes
four teams:
(cid:2)(cid:3) Greenfields Exploration, which is
responsible for the identification,
assessment and development of
opportunities – including potential
joint-ventures and acquisitions
(cid:2)(cid:3) Concept and Studies, which
conducts conceptual modelling
to establish the strategic fit of
discoveries and implements
relevant scoping studies to take
projects through to pre-feasibility
(cid:2)(cid:3) International Projects, which is
responsible for the ‘physical’ part
of the exploration development
pipeline, from pre-feasibility
through to construction
(cid:2)(cid:3) Project Generation, which drives
strategic exploration targeting on
a global basis, as well as ‘step-
change’ thought-leadership for
greenfields exploration, projects,
and near-mine exploration at the
established operations
This new structure deliberately
‘overlaps’ team responsibilities along
the exploration development pipeline
to ensure seamless integration.
We aim to use this new structure
to maintain a ‘steady-state’ growth
pipeline based on reliable and
repeatable models, so that at any
point in time we have at least:
(cid:2)(cid:3) Three advanced drilling projects
(cid:2)(cid:3) Two resource
development projects
(cid:2)(cid:3) One feasibility study
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Through this approach, we will
always be constructing a new
mine – and aim to establish a
strong, predictable and repeatable
track record for the execution of
growth projects that will last well into
the future.
Excellence in
(cid:4)(cid:6)(cid:7)(cid:7)(cid:15)(cid:14)(cid:8)(cid:7)(cid:18)(cid:31)(cid:19)(cid:8)(cid:7)(cid:26)(cid:13)(cid:18)(cid:12)(cid:6)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)
Our exploration portfolio covers five
continents and is co-ordinated and
supported from our main Growth
and International Projects centres in
Perth, Australia and in Denver, United
States. These are supported by a
network of local offices located in
a range of locations, from Santiago
in Chile, Vancouver in Canada and
Baguio in the Philippines.
We believe we have one of the best
greenfields exploration teams in the
industry. In 2011, we drilled 227,344
meters (2010: 187,713 meters) at
an all-in drilling cost of US$350/
metre (2010: US$366/meter). Over
the past two years, our exploration
efforts have added about 12.1
million gold equivalent Mineral
Resource ounces to Gold Fields, at
an average cost of approximately
US$33/oz. These figures compare
favourably with our peers.
The quality of our team is a
direct result of our long-term
investment in, and cultivation of,
our in-house capabilities.
Figure 4.4: The exploration
development pipeline
1. Discovery
2. Scoping study
3. Pre-feasibility
4. Feasibility
5. Design
6. Construction
7. Operation
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
(cid:132)(cid:31)(cid:7)(cid:15)(cid:20)(cid:3)(cid:14)(cid:17)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:16)(cid:19)(cid:19)(cid:7)(cid:19)(cid:19)!(cid:7)(cid:15)(cid:20)
Figure 4.5: Variables used to evaluate advanced exploration opportunities
103
Growing Gold Fields
Mineral Reserve and production potential Development timeline
Operating and NCE margin
Net asset value
Payback period
Initial capital costs
Earnings
Cash flow
Our target portfolio is developed
by reviewing and ranking the most
prospective areas in the world,
having assessed relevant country
risks and strategic suitability.
This includes the application of
our unique Acquisition and
Competitor Intelligence System
(ACIS), as well as our
proprietary Global Business Area
Rating (GBAR) system.
Gold Fields exploration is based
on a disciplined assessment of
opportunities to both improve the
likelihood of success and reduce
project development timelines.
Gold Fields maintains rigorous
quality control and assurance
protocols on all of its exploration
programmes. These use industry
best practice in data acquisition,
laboratory verification and sign-off
by qualified persons under the 2007
edition of the SAMREC code.
Our approach has already proven
its ability to create value for our
shareholders by driving production
and Mineral Reserve growth on a
per-share basis – and will continue
to do so.
Navigating the new
growth environment
A legacy of global underinvestment
in grass-roots exploration over the
last few decades, as well as the
depletion of traditional mining areas,
means gold mining companies
increasingly have to explore higher-
risk environments to ensure their
future growth. This makes the ‘non-
technical’ aspects of exploration
ever more important.
Establishing a licence to operate
A number of the prospective or
underexplored areas that offer future
growth opportunities are located
in relatively under-developed
locations with little history of
large-scale, industrialised mining.
In many cases, they can present
complicated social, political and
economic challenges that require
careful and sensitive management.
Because of this, we place great
emphasis on ensuring our teams
have the right knowledge, skills
and resources to secure our social
licence to operate at the start of
activities – and maintain it thereafter.
This includes detailed internal
and third-party analysis of the
risks and opportunities presented
by the operating environment,
the establishment of dedicated
community relations teams and
the proactive engagement of key
stakeholders – including traditional
leaders, local NGOs and officials at
all levels of government.
Furthermore, it is our aim to
establish situations where it is in
the mutual interest of both
Gold Fields and our in-country
stakeholders for our exploration
projects to succeed – and to
generate long-term shared benefits.
Aside from supporting operational
continuity, this approach supports
our ability to win new licences.
Experience has shown that many
governments actively favour
companies with a proven track
record of constructive community
engagement and development.
What is ACIS?
Responsible exploration
In line with our Values, Gold Fields
has an overriding commitment
to responsible health and safety
practices, as well as environmental
stewardship, during the exploration
process. In particular, we seek to
create a mind-set and working
environment that means employees
know exploration can take place
without incident – no matter where
they are operating.
This philosophy gets built into the
‘DNA’ of our exploration projects
from the start – ensuring ‘best
practice’ management of each
project’s unique safety, health,
environment and socio-economic
risks as it proceeds to development
and construction.
Our Environment, Health and Safety
Management System is certified to
ISO 14001 and OSHAS 18001.
ACIS is an internal network-
based system that uses
extensive databases covering
global geophysical data,
project data, mine data and
Geographical Information
System data – as well as
internally-derived intelligence.
It uses proprietary software
to consolidate and analyse
this data to produce value-
added analysis to inform our
acquisition activities, as well
as our interactions with other
operators in the market.
What is GBAR?
GBAR is an internal system
that provides quantitative
and qualitative analysis of
potential exploration locations.
This includes ‘prospectivity’
(e.g. geology, exploration
maturity, etc.), as well as
‘mineability’ (e.g. political risks,
competitiveness, etc.). It uses
a wide range of our existing
data – as well as content from
external experts.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
104
Growing Gold Fields
4.1.3 Capital investment
Figure 4.6: Capital Investment Framework phases
Bringing a project from early
exploration to operation requires
considerable management and
investment. This takes place
through our Capital Investment
Framework (CIF), which provides a
clear structure and process for the
management of capital investment
in projects, including the definition
of roles and responsibilities,
reporting and accountability.
Investment
Operation
Commissioning
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Project implementation
Construction decision
BFS
PFS
Positive pre-feasibility study
Positive scoping study
Scoping
Strategic fit and merit
Conceptual
Positive economic intersection
Initial drilling
Target defined and available
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Target definition
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
105
Growing Gold Fields
4.3.5 Top 10 Growth and International Projects heat map
The heat map below sets out the top 10 Growth and International Project risks, as identified through our Enterprise
Risk Management (ERM) process (p36-37).
Maximum
Key
Unfavourable changes to the regulatory and fiscal environment
Non-delivery of exploration-led growth
Growth \ Exploration
International Projects
4
2
2
1
5
1
Loss of social licence
to operate
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S
Uncertainty around metallurgical recoveries
and assumptions
Access to land and land acquisition
Political risk associated with new growth environments
Inability to replace Mineral Resources and Mineral Reserves
through near-mine exploration
3
5
3
4
Local instability and insecurity
Delays in environmental approvals and the granting of mining licences
Minimum
Risk mitigating strategies
Growth \ Exploration
Probability
Skills shortages and retention
Maximum
1
2
3
4
5
(cid:2) Implementation of the Gold Fields growth strategy
(cid:2) Identification and management of potential project challenges
(cid:2) Stringent geographic and socio-political risk analysis
(cid:2) Maintenance of strong corporate governance
(cid:2) Implementation of growth strategy for near-mine exploration
(cid:2) Enhanced human resource structures to support near-mine exploration
(cid:2) Establishment of crisis management plans
(cid:2) Extensive community relations and stakeholder engagement programmes
(cid:2) Stringent compliance with legal and non-legal obligations and commitments
(cid:2) Effective monitoring of political developments and regulatory changes
International Projects
1
2
3
4
5
(cid:2) Implementation of community relations and stakeholder engagement plans
(cid:2) Focus on meeting all commitments made to communities
(cid:2) Ongoing community engagement
(cid:2) Investigation of alternative mining methodologies
(cid:2) Competitive remuneration and benefits strategy
(cid:2) Proactive support of tertiary education through bursary programmes and sponsorship of mining schools
(cid:2) Proactive leadership development and talent management
(cid:2) Comprehensive sampling, test work and controls
(cid:2) Implementation of independent peer reviews
(cid:2) Establishment and maintenance of strong stakeholder relationships
(cid:2) Continuous tracking of project progress in relation to the environmental approval process
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Securing community support at
Far Southeast
The Far Southeast gold-copper project (located in northern Luzon in the Philippines)
potentially represents one of the most exciting projects in Gold Fields growth portfolio.
Nonetheless, it represents a relatively challenging socio-political environment. This
means the project’s ultimate success is more dependent than most on close consultation
with local stakeholders.
The Far Southeast
Community Sustainable
Development team
Far Southeast has established
a particularly strong Community
Sustainable Development (CSD) team
made up of 52 people – or 21% of the
total project workforce. The majority of the
team is made up of local and indigenous
people from the Municipality of Mankayan
– where the ore body is located. The CSD
team’s tasks include:
(cid:2)(cid:3) Ensuring a broad-based social licence to
operate for the project
(cid:2)(cid:3) Securing the formal Free, Prior and
Informed Consent (FPIC) of the
indigenous Kankana-ey community for
Far Southeast activities
(cid:2)(cid:3) Gaining access to land to carry
out proof of concept and due
diligence drilling
Community mapping
Engagement activities
Far Southeast’s approach to
community engagement is informed by
comprehensive community stakeholder
mapping, carried out with the assistance
of the nearby Benguet State University
(BSU). This was based on an innovative
household survey of almost all of
Mankayan’s 35,000 residents, carried out
using a team of 340 student volunteers
and analysed using advanced geo-spatial
software.
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s
The community stakeholder mapping
exercise – as well as subsequent work
with local officials and the BSU to develop
strategic Barangay1 development plans
– helped inform Far Southeast’s targeted
community programmes, including:
(cid:2)(cid:3) Communication campaigns to
address negative perceptions around
mining, land stability and water
quality/availability
(cid:2)(cid:3) Engagement with local people and land
claimants to expedite drilling
(cid:2)(cid:3) Support for local health missions,
benefiting more than 8,600 people
(cid:2)(cid:3) Implementation of teacher training for
133 high-school teachers, and 79 day
care and pre-school teachers
(cid:2)(cid:3) ‘Cultural renewal’ activities, coordinated
by local elders, to promote indigenous
Kankana-ey tradition
(cid:2)(cid:3) Disaster management training for
Barangay emergency response teams
through the Philippine Red Cross
1. Local administrative unit
FPIC and its relationship to Far Southeast
The Indigenous Peoples Rights Act (IPRA) requires development
activities to be aligned with four key considerations:
(cid:2) Recognition and protection of ‘ancestral domain’:
At Far Southeast, this includes all of Mankayan
(cid:2) Self-governance and empowerment: This includes FPIC
– which underpins the right to accept or reject certain
development activities
(cid:2) Cultural integrity: This includes the right to indigenous culture,
customs and traditions
(cid:2) Social justice and human rights: This includes access to
basic social services
Far Southeast is currently seeking FPIC from Mankayan’s
Kankana-ey communities to carry out further exploration
activities. Although there is a less formal, faster route for obtaining
FPIC directly, Far Southeast is applying the more transparent,
consultative and formalised process that requires FPIC to be
secured on its behalf by the National Commission of Indigenous
Peoples. Despite the extra time and cost this entails, it is believed
this approach will deliver a stronger social licence to operate.
The FPIC – and the acquiescence of local elected representatives
– is necessary if Far Southeast is to convert its Mineral Production
Sharing Agreement (MPSA) into a Financial or Technical Assistance
Agreement (FTAA). Unlike an MPSA, an FTAA would allow for
majority foreign ownership and control of the project.
At the time of writing, the process for obtaining FPIC was in motion.
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Far Southeast stakeholders
Land
claimants
Community
organisations
Ancestral
domain holders
Stakeholders
who are directly
impacted
NGOs
Stakeholders
with an interest
in the project
The Church
Project
outcome
Provincial
government
of Benguet
Local
communities
Stakeholders
who are indirectly
impacted
Government
of the
Philippines
Stakeholders granted
with decision-making
power
Municipal
government
of Benguet
Local
businesses
Indigenous
representatives
108
Growing Gold Fields
4.2 Expanding our
growth pipeline
In 2011, Gold Fields invested almost
US$300 million on exploration and
growth, including:
(cid:2)(cid:3) Near-mine exploration: US$75
million (2010: US$57 million)
(cid:2)(cid:3) Greenfield exploration: US$132
million (2010: US$99 million)
(cid:2)(cid:3) Resource development and
feasibility projects: US$87 million
(2010: US$14 million)
In addition we spent US$1.06 billion
on mergers and acquisitions (p118).
Figure 4.7: Gold Fields near-mine growth pipeline
Strong pipeline in support of growth strategy
Athena
(St Ives)
Production
Hamlet (St Ives)
Construction
Cerro Corona Oxides
Feasibility
Damang Super Pit,
Cerro Corona Resource Conversion Project
Argo-Athena Camp (St Ives), Agnew Life Extension,
Cerro Corona Sulphides Expansion
Regional Exploration at St Ives, Agnew,
Damang and Tarkwa
Organic growth at all international mines
Pre-feasibility
Scoping
Exploration
4.2.1 Near-mine exploration
St Ives
A significant proportion of the
increase in our international regions’
Mineral Resources (62%) and
Mineral Reserves (47%) has been
as a result of our portfolio of near-
mine exploration programmes. This
not only adds to our total Mineral
Reserve base, but ensures we are
able to continue leveraging our
existing mine infrastructure well into
the future.
During 2011, the prospective Neptune
and Revenge open pit expansion
areas were subject to intensive
resource development drilling. This
included in excess of 25,000 meters
of RC and diamond drilling, which
delivered positive results. These
were used to update final resource
inventory models, which assisted
with the optimisation of the Greater
Neptune project area.
Australasia region
Agnew
During 2011, we continued our
efforts to assess the various mining
options for the Waroonga Main Lode
using directional, surface-based
drilling. In the course of doing so,
we identified three high-grade ore-
shoots at depth on the Waroonga
Main Lode North; the Fitzroy,
Bengal and Hastings shoots. These
may intersect with the Porphyry
Link target zone between the Kim
and Main Lodes. The pattern of
mineralisation between the Kim Lode
and the Fitzroy shoot is scheduled for
further investigation in 2012.
Additional Reverse Circulation
(RC) drilling was carried out on an
up-dip extension at the Cinderella
open pit project, which intersected
shallow, high-grade mineralisation.
Optimisation of the Cinderella
resource suggests a potentially
economic open pit position.
Additional resource development
drilling totalling more than 130,000
meters was completed at the Greater
Santa Ana, Cave Rocks, Argo-
Athena and Leviathan areas. These
programmes targeted potentially
economic extensions to the
established mining centres.
Further activity included:
(cid:2)(cid:3) Aircore drilling at the Incredible
prospect, which identified an
extensive and coherent zone
of anomalism – with follow-up
diamond drilling confirming
economic bedrock mineralisation
(cid:2)(cid:3) Framework drilling around the
Victory complex, which identified
prospective new mineralisation
(cid:2)(cid:3) Target definition drilling in the
highly prospective Argo-Athena
camp area
(cid:2)(cid:3) Reserve conversion and
extensional drilling at Athena,
Hamlet and Cave Rocks
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
South Africa region
At South Deep, six surface holes
have been completed since drilling
started in 2007. Of the six surface
holes currently being drilled, two
will be completed by the end of the
first quarter of 2012, two by the end
of 2012 and the remaining two by
mid-2013.
The intersections obtained so far
continue to support our current
understanding of the position,
geometry and grade distribution of
the Upper Elsburg Reefs. The latest
geological models incorporate these
drilling results, providing greater
confidence in terms of grade and
tonnage estimates.
South America region
Over the course of the year, we
carried out infill and extensional
drilling within the Cerro Corona
pit. This was aimed at defining the
geological parameters to support
future mine planning, as well as
the potential for higher-grade
ore extensions in proximity to the
current pit. The results of this drilling
programme generally confirmed the
December 2010 resource model
and were used to better define the
mine’s Mineral Reserves.
In addition, we identified localised,
higher-grade zones, which may
potentially provide short-term
production grade increases over
the life of the mine. Drilling also
identified a number of intersections
outside of the planned pit designs,
particularly at depth. This may offer
potential Mineral Resource expansion
opportunities for the future, which will
be further explored in 2012.
We completed our Oxide Stockpile
drilling project in June 2011. This
confirmed the estimated grade and
distribution of the stockpile – as
well as very low levels of soluble
copper. Full analysis and modelling
of the stockpiles was completed in
July 2011. We are doing a feasibility
study to investigate the potential for
a heap leach facility to recover the
oxide ores.
In the third-quarter of 2011, we
completed exploration drilling on
the adjacent Sylvita project. This
delivered localised indications of
copper mineralisation in extensions
to the Cerro Corona intrusive body.
West Africa region
During 2011, our near-mine
exploration programme at Damang
increased the mine’s Mineral
Resource base by 56%. This has
increased the life of the mine from
2024 to 2029.
In May 2011, we completed the
first phase of the Damang Super
Pit proof of concept 29,000 meter
drilling programme. This covered the
entire strike length of the geological
complex to assess the cut-back
potential of the Huni, Damang and
Juno deposits. Another 38,000
meters were drilled in the second
half of the year. The programme
produced positive results and is
being fed into a pre-feasibility study,
which is explored on p114-115.
Beyond this, we carried out drilling
targeted at the possible extension
of deposits in the Greater Amoanda
area. Detailed geological studies
produced as a result have identified
opportunities for extension at both
the Rex and Amoanda deposits.
(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:135)+‘(cid:10)(cid:8)(cid:22)(cid:6)(cid:7)(cid:16)(cid:20)(cid:3)(cid:15)(cid:4)(cid:8)(cid:16)(cid:8)(cid:4)(cid:18)(cid:12)(cid:30)(cid:16)(cid:18)(cid:18)’(cid:8)(cid:31)(cid:3)(cid:27)(cid:7)(cid:6)(cid:19)(cid:3)(cid:14)(cid:7)(cid:31)(cid:8)(cid:13)(cid:12)(cid:6)(cid:20)(cid:24)(cid:12)(cid:18)(cid:3)(cid:12)
Canada
Woodjam JV
Mali
Yanfolila
Finland
Arctic Platinum
109
Growing Gold Fields
Kyrgyzstan
Talas
Mali
Kangare
Peru
Chucapaca JV
Chile
Salares Norte
Argentina
Taguas JV
Philippines
Far Southeast
Ghana
Damang Super Pit
Producing asset
Development project
Exploration project
South Africa
South Deep
Australia
East Lachlan, Delamarian
A substantial full-field aircore drilling
programme remains ongoing at
the Myall concession, focused
on the discovery of concealed
porphyry gold-copper systems that
have breached the paleo-surface.
Elsewhere in the belt, 14 initial
drill targets were tested in 2011
with encouraging results. Focused
target definition work consisting of
airborne and ground geophysical
surveys, as well as drilling coupled
with multi-element and multi-spectral
analysis, has revealed a number of
porphyry-related anomalies at the
Wellington North project. Further
work at the Cowal East joint venture
is identifying both epithermal
gold and porphyry copper-gold
targets. These, and other targets,
are scheduled for initial drilling in
early 2012 while greenfields target
definition work continues.
www.clancyexploration.com
4.2.2 (cid:11)(cid:6)(cid:7)(cid:7)(cid:15)(cid:14)(cid:7)(cid:18)(cid:31)(cid:19)(cid:8)(cid:7)(cid:26)(cid:13)(cid:18)(cid:12)(cid:6)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)
Gold Fields has a broad portfolio
of early stage greenfields projects
around the world. These will help
ensure the sustainability of our
growth and diversification well into
the future.
Argentina
In October 2011, Gold Fields signed
a joint venture agreement to earn
up to 70% of the Taguas gold-silver
project in San Juan province from
Minera S.A., a private company.
Diamond drilling commenced in
December 2011 and will continue
into 2012.
Australia
East Lachlan
In the East Lachlan Fold Belt of
New South Wales, Gold Fields
holds an 80% interest in six project
areas (Wellington North, Cowal
East, Jemalong, Moorefield, Parkes-
Clancy and Parkes-Centaurus) and
has completed the 51% earn-in of
a potential 80% on the Myall joint
venture. Gold Fields has expanded
its own ground position in this world-
class gold-copper porphyry belt to
approximately 2,100km2 with the
addition of four new project areas in
its own right.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Growing Gold Fields
Toodoggone
We have a joint venture project
with Cascadero Copper Corp. to
earn up to a 75% interest in its
30,409 ha Toodoggone copper and
gold project in British Columbia. In
2011, we carried out a 2,248 meter
diamond drilling programme to
test high priority geochemical and
geophysical anomalies on the Mex
porphyry copper-gold target. This
successfully intersected porphyry-
related copper-gold mineralisation.
A decision on the way forward will
be made in 2012.
www.woodjamcopper.com
www.cascadero.com
Delamerian
Gold Fields currently manages
over 20,000km2 of tenements at
its Delamerian project in South
Australia. This is an early stage
greenfields project targeting the
potential for covered orogenic gold
mineralisation in an unexplored
province. Geophysical surveys,
aircore drilling and soil sampling
have identified a number of target
areas with low level anomalism. A
single diamond drill hole completed
at the Haylands target in late 2010
intersected hydrothermal alteration
associated with anomalous gold,
zinc, copper and bismuth values,
which validates the targeting criteria.
Additional targets have been
defined in 2011 and prioritised for
initial drilling in 2012.
Central Victoria
During 2011, the Central Victoria
project was divested to Timpetra
Resources as part of their initial
public offering on the ASX. Under
the terms of the agreement,
Gold Fields retained a 21.8%
equity ownership in Timpetra
post-initial public offering and
anti-dilution rights to acquire and
maintain up to a 40% shareholding.
www.timpetra.com
Canada
Woodjam
Gold Fields has a joint venture
agreement to earn into a 70%
interest of the Woodjam projects
in British Columbia. The projects
are held by Consolidated Woodjam
Copper Corp. and include:
(cid:2)(cid:3) Woodjam North, with 42,343 ha
covering several known porphyry
copper and gold targets in south-
central British Columbia
(cid:2)(cid:3) Woodjam South, with 14,199 ha
covering the Southeast Zone
porphyry copper target
In 2011, we completed a
20,000 meter drilling programme
on the Southeast Zone porphyry
copper-gold-molybdenum targets
to support the development of a
SAMREC 2009-compliant Mineral
Resource and a Conceptual
Mining Study in mid-2012. As a
result, we have a first-ever Inferred
Mineral Resource of 1,060 million
pounds copper declared. Infill
drilling and reconnaissance
drilling was also carried out on
the Deerhorn, Megabuck and
Tisdall Lake prospects.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Chile
Ghana
Gold Fields has option agreements
to acquire 100% of the Salares
Norte and Piedra properties held
by SBX Asesorias e Inversiones, as
well as the Pircas property held by
S.C.M. Aguas Heladas.
In 2011, we started RC drilling
at the Salares Norte property to
test selected geophysical and
geochemical targets for evidence
of high sulphidation gold-silver
mineralisation. We also signed
a 100% option agreement for
the adjacent third-party owned
Rio Baker property, which will
be incorporated into the Salares
Norte exploration plan. A follow-
up diamond drilling programme
commenced at Salares Norte in
December 2011 and will continue in
the first half of 2012.
At the Pircas epithermal gold
project, we carried out further
drilling to test the limits of a deeply
oxidised vuggy silica-hosted gold-
silver mineralisation identified in
2010. Trenching was carried out on
a new target area in late 2011 and
a follow-up drilling programme is
planned for the first half of 2012.
During 2011, we completed a
4,800 meter drilling programme at
the Asheba project (Gold Fields
90%). The drill results have confirmed
mineralisation in two prospect areas.
Conceptual modelling showed
sufficient resource potential and
follow-up drilling commenced in
November 2011.
Guinea
At the Telikan gold project in Guinea,
Gold Fields completed follow-up
soil sampling and trenching on
two targets that warrant drilling. A
5,350 meter RC drilling programme
was completed in December 2011.
A decision on the way forward will
be made once all assay results
have been received in early 2012.
Mali
In 2011, we continued exploration
activity at our Yanfolila project in
south-western Mali (Gold Fields
85%). Work included drilling on the
Komana East, Komana West and
Kabaya South deposits, in parallel
with efforts to advance a scoping
study that was completed in the
third quarter. Target definition work
and initial drilling also took place on
a number of additional prospective
targets within 25km of Komana East.
The scoping study suggests
that the project requires about a
1.5 million ounce Mineral Resource
base before a capital investment
decision can be made. Although
drilling in 2011 did reveal potential
for additional ounces, the required
threshold has not been achieved
as quickly as expected. As a result,
the project remains in the advanced
drilling stage – with resource
development dependant on stronger
drill results. Nonetheless, the
extensive nature of our work in the
area means that Yanfolila has the
potential to move with great speed
into the resource development
stage, should further Mineral
Resources be identified.
On the Kangare project, which
is located north of Yanfolila in
Mali, Gold Fields has completed
extensive geophysical and
geochemical surveys, as well as
aircore drilling, to define several
gold targets. Initial bedrock drilling
using combined RC and diamond
drilling at the Tinguele target in
August 2011 defined a large gold-
bearing system. Follow-up drilling
commenced in late 2011 and will
continue into the first half of 2012.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
112
Growing Gold Fields
Peru
Kyrgyzstan
Arctic Platinum Project, Finland
In north-western Kyrgyzstan,
Gold Fields owns a 60% interest in
the Talas joint venture with partner
Orsu Metals Corp. The Talas joint
venture covers four exploration
licences, which are prospective for
copper-gold porphyry deposits. Most
of the exploration work completed
has focused on the Taldybulak
copper-gold deposit. At the end
of 2011, a total of about 30,000
meters of diamond drilling had been
completed on the Taldybulak deposit
to delineate a SAMREC-compliant
copper-gold resource of about 10.5
million ounces of gold-equivalent.
Due to ongoing social and political
unrest in Kyrgyzstan, which began
with a revolution in April 2010,
field work has been suspended. In
October 2011, a new president was
elected and he is now consolidating
a new government. In January 2012
Gold Fields and Orsu Metals signed
an agreement with the community to
resume drilling in April 2012.
www.orsumetals.com
4.2.3 Resource development
and feasibility projects
In 2011, we increased the Mineral
Resources and Mineral Reserves
of our advanced stage greenfields
exploration project portfolio. These
projects are driven by our new
Growth and International Projects
function (p102), which – supported
by our established in-region
teams – is designed to deliver
seamless project development
and a predictable steady state
project pipeline. These projects are
intended to be developed into our
next generation of new-age mines.
Gold Fields is exploring the Tacna
and Moquegua projects in the
southern Altiplano region of Peru.
Initial RC drilling partially tested the
Ichocollo porphyry gold target at the
Tacna project in September 2011.
However, the drilling programme
was suspended after two holes
due to regional social unrest. This
programme is scheduled to resume
in 2012 followed by initial drilling
programmes on two other nearby
target areas.
At the Moquegua project, an initial
drilling programme of six diamond
drill holes was completed between
August and November 2011 on
the Pacosani breccia target.
Final assay results are still
incomplete but results to date
have not been encouraging.
In December 2011, initial diamond
drilling commenced on the Chapi
Chiara epithermal gold target. This
is part of the Amantina joint venture
signed with Vena Resources Inc.
to earn up to a 70% interest.
The Amantina joint venture
property is contiguous with the
Moquegua project.
www.venaresources.com
Philippines
In September 2011, Gold Fields
signed an option agreement with
Bezant Resources Plc to acquire
100% of the Mankayan copper-
gold project located on the island
of Luzon. The Mankayan project
is immediately adjacent to the Far
Southeast project (p116-118) and
contains a significant buried gold-
copper porphyry deposit located
at Guinaoang, about 4km east of
the Far Southeast deposit. Diamond
drilling is planned at Mankayan
in 2012.
www.bezantresources.com/
Arctic
Platinum
Project
Finland
Helsinki
During 2011, we completed a pre-
feasibility consolidation study on the
Arctic Platinum Project (Gold Fields
100%), focused on the Konttijarvi
and Ahmavaara resources in the
Suhanko area.
This was with a view to establishing
a starter mine for future resource
development. The study
incorporated the results of our pilot
plant testing of bulk floatation and
hydrometallurgical processing on
two 50 tonne ore samples – using
Platsol ® technology for enhanced
metal recovery (p52).
This pilot study was completed
during 2011 and generally
confirmed earlier bench-testing
work indicating that the Platsol ®
process can be successfully utilised
to recover copper, nickel, gold and
platinum group elements (platinum,
palladium and rhodium) from the
Suhanko ores at an onsite facility.
Under the base case assumptions,
the economics of the project are
relatively robust. There are several
other potential resource positions
that could considerably improve the
project’s economics by significantly
increasing the life of the mine. These
require additional drilling to declare
Inferred and Indicated Resources
and to complete test work to confirm
amenability to the Platsol ® hydro-
metallurgical process.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
113
Growing Gold Fields
Our main focus has been on the
resource definition of the Canahuire
deposit. During 2011, we increased
the Indicated and Inferred Mineral
Resource to 133 million tonnes
at 1.4 g/t gold, 10.8 g/t silver
and 0.09% copper for a total of
7.6 million ounces of gold
equivalent. This represents a 35%
increase on the 5.6 million ounces
of gold equivalent declared in May
2010 and is based on a total of
85,000 meters of drilling up to May
2011. Mineralisation remains open
to the west at depth.
We advanced the development of
our mine planning based on the
new resource model, including a
three phase pit design. RC and
diamond drilling remains ongoing
and is focused on tailings and
waste dump civil geotechnical
drilling, as well as sterilisation
drilling. We also initiated an
environmental impact assessment
baseline study, which is due
for submission in the third quarter
of 2012.
We plan to complete the feasibility
study for Chucapaca in late 2012.
This will incorporate a total of
106,000 meters of resource and
geotechnical drilling, as well
as metallurgical test work. We
plan to make a development
decision by year-end, subject to
agreement with local communities
on land purchases.
The Canahuire deposit is one of
several targets in the 12,700 ha
Chucapaca project area.
Gold Fields has also consolidated
a significant portfolio of additional
concessions adjacent to the project
area and is exploring these on an
independent basis.
Sustainable Development
Our activities in Chucapaca are
supported by formal, five year
agreements with the Corire,
Santiago de Oyo Oyo and
Chucapaca communities.
'Bulking up' additional deposits
would not only optimise the
efficiency of up-front capital
expenditure (including the
substantial capital cost associated
with Platsol ® processing), but would
also offer opportunities to improve
project economics. These include:
Sustainable development
Sustainability risks around the Arctic
Platinum Project are limited. The
main concern of local communities
is that the deposit is brought into
production promptly to contribute to
the local economy.
(cid:2)(cid:3) Mitigation of the impact of
Chucapaca, Peru
the large Ahmavaara pre-strip
by offering more flexible ore
scheduling from additional ore
sources – thereby reducing strip
ratios and improving the grade
mix in the short-term
(cid:2)(cid:3) The possibility of higher-grade
open pit resources from the
SK Reef deposits (Siika Kama,
Kuohunki and Nutturalampi),
which would allow us to bring
forward higher-grade ore – and
to reduce the strip ratio at the
Suhanko North deposit
(cid:2)(cid:3) Potential for less selective, lower
cost mining
We are further evaluating future
production rates above the base
case, the likely impacts on capital
efficiency and project economics,
as well as further metallurgical
enhancements to recovery.
The broader market context will
also help inform the future of this
potentially important strategic
project. Our modelling suggests that
much of the platinum industry faces
long-term cost challenges due to the
mature nature of many of the major
platinum mines in South Africa. As
a result, an extended life-of-mine at
the Arctic Platinum Project would
improve its relative position over
time, with potential to be amongst
the lowest cost producers in the
industry (excluding up-front capital
costs from NCE). Furthermore, the
project is located in a strong and
stable operating environment, with
a sound regulatory framework and
straightforward licensing processes.
In addition to our pre-feasibility work
on the Suhanko area, we carried
out a preliminary assessment on the
Suhanko II extension area (including
the Suhanko North, Vaaralampi and
Tuumasuo deposits), which is subject
to a mining lease application.
Peru
Lima
Chucapaca
Chucapaca is likely to become our
second mine in the South America
region – and the next of our new-
generation international growth
projects. The feasibility project,
which is located in southern Peru, is
a joint venture between Gold Fields
(51%) and Buenaventura (49%),
operated through the joint venture
company Canteras del Hallazgo
S.A.C (CDH).
The gold-copper-silver Canahuire
deposit, which forms part of the
Chucapaca project, is amenable to
conventional open pit mining with
copper floatation and CIL treatment
of the copper tailings to recover
gold. The fact that the Canahuire
deposit is located at an altitude of
approximately 5,000 meters above
sea-level means it is likely to offer its
own unique operational challenges.
Nonetheless, our successful
development of the high-altitude
Cerro Corona mine (p88-91) means
we are well placed to manage
such issues.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
114
Growing Gold Fields
Amongst other things, these
agreements provide for a range of
community benefits, including:
(cid:2)(cid:3) The delivery of health and
education programmes, in
partnership with relevant
local authorities
(cid:2)(cid:3) The delivery of other socio-
economic development
programmes identified by the
communities, including training
initiatives for local people
Although these agreements give
CDH a formal social licence to
complete the exploration and study
phases of the work programme over
the next four years, 2011 did raise
some challenges. In late August/
early September, work on the project
was temporarily disrupted as a
result of activism by the Oyo Oyo
community. This was attributable to
a lack of internal consensus within
the community in its negotiations
with Gold Fields – as well as issues
around our land acquisition process
and plans to decrease field activity
towards the end of 2011.
As a result, we are intensifying our
existing community engagement
efforts. This includes, for example,
our efforts to negotiate ground-
breaking collective agreements
covering land acquisition. These will
offer production-based payments
to local communities – and so
help entrench a strong social
licence to operate throughout the
mine lifecycle. In addition, we are
implementing an intensive training
and local employment programme in
anticipation of project development.
Figure 4.9: Damang Super Pit conceptual shell
Surface
-200m
-400m
-600m
-800m
Current Pit
Dec 2010 Reserve Shell
(US$1,000/oz)
Existing Production Base
Conceptual Extensional Pit Shell
(US$1,300/oz)
3 km
Damang Super Pit, Ghana
Ghana
Accra
Damang Super Pit
At Damang, we are in the process
of transforming what was a relatively
small operation facing potential
closure into a primary asset that will
make a significant contribution to
Group production for many years
to come.
According to our conceptual
exploration model, the pit contains
50 to 80 million tonnes of ore at
grades of 1.6-1.8 g/t for a total of
approximately 4 million ounces
of gold. Following completion of
the initial 25,000 meter proof of
concept drilling programme in May
2011, a second phase of drilling
was completed in October 2011.
This phase covered an additional
38,000 meters of resource
definition drilling, confirming the
extent of mineralisation consistent
with current mined ores over the
entire 3.5km strike length – and at
depths of up to 500 meters below
the current pit floor. This provided
the geological and assay data to
achieve a 7.4 million ounce Mineral
Resource position. Final pre-
feasibility optimisation should be
completed by early 2013.
In parallel to the resource drilling
programme, mining, metallurgical
and engineering studies advanced
on-schedule during 2011. We
also completed a desk-based
tailings disposal study, which was
supported by geotechnical and
hydro-geological site investigations.
The pre-feasibility study anticipates
a number of options, including a
conventional tailings storage facility,
in-pit tailings storage, and the co-
disposal of waste rock and tailings.
We are also taking an innovative
approach to water management,
which remains a relatively sensitive
issue in this high altitude agricultural
area. It is anticipated that water will
be provided to the mine from a new
30 million cubic meter reservoir.
Although the mine only requires a
10 million cubic meter reservoir,
the majority of water from the
dam will be used to supply local
communities – whilst significant
excess capacity will be maintained
to avoid supply disruptions.
The Damang Super Pit project
is focusing on the significant
expansion of our existing Damang
pit and the exploitation of ore
at-depth and along strike into the
adjacent Huni and Juno pits. It now
has a 7.4 million ounce resource
to support a potential doubling
of production.
The project represents a low-risk
growth opportunity supported by
high-levels of existing data, as well
as established infrastructure.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
The pre-feasibility study includes an
engineering design study, covering
the design of the metallurgical plant,
infrastructure and services, potential
in-pit crushing, mechanised
conveyance of waste rock and
a hydro-geological study for the
enlarged pit.
Two options are being considered
for the metallurgical plant. The first
is to refurbish the existing plant and
construct a second plant with a
capacity of 5 million tonnes a year.
The second is to decommission the
existing plant and construct a new
9.5 million tonnes a year plant.
Although we plan to complete the
pre-feasibility study in mid-2012,
we are considering the potential
impact of recent changes to the
fiscal regime in Ghana and are
involved in ongoing dialogue with
the government. This includes
a full review of existing stability
agreements, with a view to levelling
the playing field in the country.
Gold Fields does not have a pre-
existing stability agreement.
Sustainable Development
The project is fully integrated into
Damang’s broader sustainability
management systems.
115
Growing Gold Fields
Case study
Bringing new life to the Damang mine
through the Super Pit project
The Damang Super Pit project in Ghana is part of Gold Fields Greater
Damang strategy, which is being implemented in two phases:
(cid:2)(cid:3) Phase 1: The Damang Super Pit aims to expand the current pit
through both the aggressive exploitation of ore at-depth and
through the combination of the existing Huni, Juno and Damang
deposits into a ‘Super Pit’. Gold Fields conceptual model indicates
that the Super Pit contains between 50 and 80 million tonnes of ore
at grades of 1.6 to 1.8 g/t
(cid:2)(cid:3) Phase 2: The Greater Damang Project focuses on the significant
expansion of Damang’s Mineral Resources and Mineral Reserves
beyond the existing pit
The Damang Super Pit project aims to transform what was previously
a relatively modest operation into a long-term contributor to Group
production by significantly expanding production at the mine. Given
the mine’s established infrastructure and wealth of existing geological
data, the project represents a high-potential growth opportunity for
Gold Fields. The project now has a 7.4 million ounce resource to
support a potential doubling of production and increase Damang’s life
of mine from 2024 to 2029.
The Super Pit project will require the development of enhanced
mine infrastructure to cope with increased production. To this end,
Gold Fields is planning the construction of a new processing plant,
as well as an upgrade of the existing plant. Once both plants are
in operation (scheduled for early 2015), they will double Damang’s
processing capacity to about 10 million tonnes. In addition, the
new plant is targeting a recovery rate of about 95%, compared
to a recovery rate of about 92% delivered by the existing plant.
This – along with the construction of additional tailings storage
capacity – will ensure that the Super Pit project is able to deliver
on its exciting potential.
By significantly extending the life of the mine, the Damang
Super Pit project will also deliver key benefits to local stakeholders.
These include:
(cid:2)(cid:3) The creation of new employment opportunities – as well as the
maintenance of existing positions
(cid:2)(cid:3) The long-term maintenance of Damang’s contribution to local
socio-economic development – and the economic sustainability
of Damang village. This includes key health, water and sanitation
projects funded through the Gold Fields Ghana Foundation (p145) –
as well as the indirect economic contributions of mine employees
The detailed operational and financial modelling for the Super Pit project
will take account of the final format of the new Ghanaian tax regime for
the mining industry, which was tabled by the government.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
116
Growing Gold Fields
Far Southeast, Philippines
Far Southeast
project
Manila
Philippines
The Far Southeast gold-copper
project in the Philippines continues to
represent one of our best greenfields
growth opportunities. Far Southeast
is located in an existing mining camp
operated by Lepanto Consolidated
Mining Company in northern Luzon.
As a result, the project has good
access to established infrastructure,
including roads, tailings facilities,
power and water.
Following positive ongoing drilling
results we made a third down-
payment of US$110 million in March
2012 under our option agreement
with Lepanto and Liberty Express
Assets to acquire a 60% interest
in the deposit. Gold Fields now
owns 40% of Far Southeast and
should we decide to proceed with
the acquisition of the remaining
20% interest, the final payment
of US$110 million is expected to
be paid during the second half of
2012. The total acquisition price for
this 60% interest is US$340 million.
The deep nature of the deposit
– beginning at 900 meters below
surface – means it will require
underground shafts, a refrigeration
plant, ventilation and other related
infrastructure. In this context,
Gold Fields is particularly well
placed to leverage its extensive
deep-underground mining
experience in South Africa.
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Historic third-party drilling indicates
the presence of a large, concealed
gold-copper mineralised porphyry
system. Over 80 diamond drill holes
totalling more than 35,000 meters
have been drilled into the system.
The mineralised zone has
approximate dimensions of more
than 1,000 meters from east to west,
800 meters from north to south and
900 meters vertically.
Far Southeast’s extensive drilling
programme has taken place
from 700 meters above sea level,
targeting an initial resource in a 550
meter vertical section between 350
meters above and 200 meters below
sea level. Activity has included:
(cid:2)(cid:3) 24,000 meters of proof-of
concept drilling via 17 holes
(cid:2)(cid:3) 12,000 meters of due diligence
drilling via 13 holes
Initial results support the existence
and extent of the known core of
mineralisation – as well as further
extensions beyond this core,
both laterally and at depth. The
indicative scoping study parameters
for the project are based on a
900 million tonne target at 0.77g/t Au
and 0.54% Cu – equivalent to
52 million ounces of gold-equivalent.
These figures will be used to inform
the final option payment – expected
during 2012 – and ongoing
conceptual mining studies. Should
we exercise the option, we currently
plan to complete an Inferred
Resource model in the second half
of 2012.
Far Southeast is evaluating bulk
underground mining of between
4 million and 25 million tonnes
per year – depending on the
development of a plan that is
socially, environmentally and
economically responsible.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
117
Growing Gold Fields
These activities have been guided
by an innovative household survey
of almost all 35,000 residents in the
area using a team of 340 volunteers
from Benguet State University (p106).
In 2011, Far Southeast
implemented a Community
Sustainable Development (CSD)
programme to address some of the
negative historical mining legacies
that exist in the area. This includes
community perceptions around the
association between underground
mining and ground movement,
concerns around water quality,
and employment expectations.
“We are pleased with the
[Far Southeast] results to date
and excited at the prospect of
establishing a long-standing
!(cid:5)(cid:20)(cid:5)(cid:16)(cid:18)(cid:18)’(cid:8)(cid:30)(cid:7)(cid:15)(cid:7)(cid:14)(cid:8)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)(cid:6)(cid:7)(cid:18)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)(cid:19)(cid:23)(cid:3)(cid:13)(cid:8)(cid:3)(cid:15)(cid:8)(cid:16)(cid:8)
promising region in the Philippines.”
The mine is expected to utilise twin
declines and twin shafts, as well
as a conventional copper floatation
process plant.
In terms of infrastructure, Far
Southeast is evaluating a pipeline to
take the copper concentrate to the
coast – as well as other transport
alternatives. Plans are in place to
source power from the national grid
through a purchase agreement.
Other activities carried out to
support the project in 2011 include:
(cid:2)(cid:3) The filing by Lepanto and Far
Southeast of an application
to convert the existing Mineral
Production Sharing Agreement
(MPSA) licence into a Financial or
Technical Assistance Agreement
(FTAA). This will allow for majority
foreign ownership and control of
the project
(cid:2)(cid:3) Initiation of a full cultural and
Nick Holland, Chief Executive Officer of Gold Fields
human resources due diligence
exercise to manage the potential
transition of Lepanto employees.
This is being undertaken in
cooperation with the Southeast
Asia Interdisciplinary Development
Institute (SAIDI) School of
Organisational Development
(cid:2)(cid:3) Initiation of a water management
plan for surface and groundwater,
a biodiversity study and a legal
obligations register
Resolution on the proposed mining
method remains outstanding and
the full sustainability impact of the
proposed method would have
to be assessed.
Sustainable Development
The well-established nature of
mining in the area has contributed
to a largely cooperative stance
on the part of local communities.
Nonetheless, the area offers a
relatively complex social, political
and cultural context.
As a result, particular emphasis
has been placed on the
development and implementation
of a comprehensive sustainable
development strategy (p106-107).
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
118
Growing Gold Fields
Key activities undertaken by the Far
Southeast CSD team in 2011 include:
4.2.4 Mergers and acquisitions
Although our strategy is based on
exploration-led growth, we made
two important acquisitions during
2011 that have not only contributed
to the expansion of our Mineral
Resources and Mineral Reserves
– but also our strategic aim of
achieving 100% ownership of the
assets in our portfolio.
The first of these was our April 2011
acquisition in Peru of a further stake
in Gold Fields La Cima S.A.A. for
US$382 million. Our offer to minority
shareholders in La Cima saw our
stake increase from 80.7% to 98.5%
- giving us almost total ownership of
the Cerro Corona mine.
As a result of this acquisition,
we acquired:
(cid:2)(cid:3) An additional 70,000 ounces of
attributable annual production at
an NCE of about US$592/oz
(cid:2)(cid:3) An additional 900,000 reserve
ounces and an additional
1.4 million resource ounces
(cid:2)(cid:3) Additional Mineral Resource
and Mineral Resource
growth potential
(cid:2)(cid:3) Delivery of Integrated Barangay
Development Plans for each of
the local ‘barangays’ (i.e. local
administrative areas) in the
municipality of Mankayan,
in collaboration with the
Municipal Council and
Benguet State University
(cid:2)(cid:3) Provision of computer literacy
courses in each barangay (in
collaboration with Mankayan’s
local business forum)
(cid:2)(cid:3) The enrolment of around
1,000 indigenous people in a
government health programme
(with the Department of Health)
(cid:2)(cid:3) The carrying out of Medical
health missions to all 12
barangays (with the support of
the Mankayan Municipal Council
and Department of Health)
(cid:2)(cid:3) Water management planning and
bio-filter training (with NGO, A
Single Drop of Water)
(cid:2)(cid:3) The rolling out of a ‘Mining 101’
awareness-raising course to
the Mankayan Municipal
Council, run by the University
of the Philippines
A key component in our ability to
proceed with the project is the
securing of the statutory Free
Prior and Informed Consent (FPIC)
of the local Kankana-ey indigenous
group for an exploration FTAA
(p107). Far Southeast is also in the
process of securing relevant local
government approvals.
www.saidi.edu.ph
www.singledrop.org
The second was our June 2011
acquisition of IAMGOLD’s 18.9%
indirect minority stake in the
Damang and Tarkwa mines in
Ghana for US$667 million. This
has taken our total interest in the
mines from 71.1% to 90% – with the
remaining 10% interest held by the
Government of Ghana. As a result
of this acquisition, we acquired:
(cid:2)(cid:3) An additional 180,000 ounces of
attributable annual production at
an NCE of about US$940/oz
(cid:2)(cid:3) An additional 2.14 million reserve
ounces at a cost of about
US$300/oz
(cid:2)(cid:3) An additional 3.27 million
resource ounces at a cost of
approximately US$198/oz
(cid:2)(cid:3) Significant resource and reserve
upside potential, at Damang
in particular
In addition, we entered into an
option agreement with Bezant
Resources Plc to acquire its
interest in the Guinaoang porphyry
copper-gold deposit (known as
the Mankayan project) in the
Philippines. The Mankayan project
is located just 4km east of our
Far Southeast project (p116-118).
Subject to shareholder approval
and an option fee of US$7 million,
Gold Fields will be granted the
option to acquire Bezant’s entire
interest for US$63 million.
www.iamgold.com
bezantresources.com
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
4.3 Mineral Resource and
Mineral Reserve Statement
The Gold Fields Mineral Resource
and Mineral Reserve reporting
strategy is to ensure integrity
and consistency in reporting,
compliance with public and internal
regulatory codes and to inform
all stakeholders on the status of
the Group’s fundamental asset
base. A comprehensive review of
the Group’s Mineral Resources
and Mineral Reserves as at 31
December 2011, including locality
and mine infrastructure plans of
all the operations, is available
in the Mineral Resources and
Mineral Reserves Overview that
accompanies the Integrated Annual
Review, or may be downloaded from
the Gold Fields website.
www.goldfields.co.za
4.3.1 Corporate governance
The Group’s December 2011
Mineral Resource and Mineral
Reserve statement is compliant
with the South African Code for
the Reporting of Exploration
Results, Mineral Resources and
Mineral Reserves (the SAMREC
Code, 2007 edition) and Industry
Guide 7 for reporting on the United
States Securities and Exchange
Commission (SEC).
Other relevant international
codes are recognised, where
geographically applicable, such
as the Australian JORC Code and
Canadian NI 43-101.
Guided by a commitment to
corporate governance, this
statement has been audited by a
number of leading independent
mining consultancies, and found
to be compliant with the relevant
codes. The procedure followed in
producing the declaration is aligned
to the guiding principles of the
Sarbanes-Oxley (SOX) Act of 2002.
119
Growing Gold Fields
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In Figure 4.15 the Mineral Resource
and Mineral Reserve statement as
at 31 December 2011 is compared
to the previous year’s declaration
as at 31 December 2010. The
Mineral Resource and Mineral
Reserve figures are estimates, at
a point in time and will be affected
by fluctuations in the gold price,
US dollar currency exchange rates,
costs, mining permits, changes in
legislation and operating factors.
Although all permitting may not
be finalised and in place, there is
no reason to expect that these will
not be granted. However, the time
taken for approval may impact the
schedules. All financial models
are based on promulgated tax
regulations at 31 December 2011.
All figures are managed, unless
otherwise stated, Mineral Resources
are reported inclusive of Mineral
Reserves and stability pillars, while
production volumes are reported in
metric tonnes (t).
The competent persons designated
in terms of SAMREC, who take
responsibility for the reporting of
Gold Fields Mineral Resources
and Mineral Reserves, are the
respective operation-based Mineral
Resource Managers and relevant
Project Managers.
Corporate governance on the overall
compliance of these figures has
been overseen and consolidated by
Kevin Robertson, Group Head of
Mine Planning and Mineral Resource
Management. He has 26 years
experience in the mining industry
and is a permanent employee
of Gold Fields Group Services.
Additional information regarding the
teams involved with the compilation
of the Mineral Resource and Mineral
Reserve declaration are incorporated
in the respective ‘Technical Short-
Form Reports’, which are available
on the website.
www.samcode.co.za
www.sec.gov
www.jorc.org
www.ccpg.ca
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
120
Growing Gold Fields
4.3.2 Group summary
Figure 4.10: Group attributable Mineral Resources (million Au-Eq oz)
23.70
9.15
7.56
22.65
Total: 217.0 Moz
KDC & Beatrix
(underground)
SRD & TSF
South Deep
(underground)
West Africa
South America
Australasia
Growth Projects
(Excl. TSF Au
+ Woodjam)
74.55
4.61
74.82
Figure 4.11: Group attributable Mineral Reserves (million Au-Eq oz)
4.11
6.01
12.36
Total: 80.6Moz
KDC & Beatrix
(underground)
SRD & TSF
South Deep
(underground)
West Africa
South America
Australasia
18.23
3.30
36.58
Gold Fields has total attributable
precious metal and gold equivalent
Mineral Resources of 217.0
million ounces (December 2010:
225.4 million ounces) and Mineral
Reserves of 80.6 million ounces
(December 2010: 76.7 million
ounces). The figures include: Arctic
Platinum (2PGE+Au), Canahuire
gold-copper-silver, Taldybulak gold-
copper-molybdenum, Yanfolila and
the WWTTP gold (the West Wits
Tailings Treatment Project, which
includes South Deep, KDC East
and KDC West).
Total attributable gold-only Mineral
Resources including WWTTP
(excluding platinum, other metal
equivalents and projects) are
189.7 million ounces (December
2010: 199.1 million ounces)
and Mineral Reserves are
77.6 million ounces (December
2010: 74.6 million ounces), net
of depletion.
4.3.3 Regional summary
Australasia
The Australasia region has a
declared gold Mineral Resource
of 9.2 million ounces (December
2010: 9.6 million) and a gold
Mineral Reserve of 4.1 million
ounces (December 2010: 4.1 million
ounces). These figures are net of
0.7 million and 0.7 million ounces of
depletion respectively.
Figure 4.12: Headline Numbers - Gold Fields Limited Mineral Resource and Mineral Reserve summary as at
31 December 2011
Total: Operating mines
(including Cu as Au equivalents & TSF Au)
Managed
Attributable
Totals including platinum and gold equiva-
lents (from Cu, Ag & Mo), excl Woodjam
Managed
Attributable
Mineral Resources
Mineral Reserves
Tonnes
(Mt)
1749.1
1667.1
Tonnes
(Mt)
2475.8
2158.2
All Metal
EqOz
(Moz)
202.2
193.4
All Metal
EqOz
(Moz)
234.4
217.0
All Metal
EqOz
(Moz)
208.8
202.3
All Metal
EqOz
(Moz)
239.5
225.4
Tonnes
(Mt)
All Metal
EqOz
1062.4
1011.0
85.1
80.6
Tonnes
(Mt)
All Metal
EqOz
1062.4
1011.0
85.1
80.6
(Moz)
81.0
76.7
(Moz)
81.0
76.7
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
)
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121
Growing Gold Fields
Figure 4.13: Attributable Mineral Resources per operation and growth project (million Au-Eq oz)
)
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2 Excludes South Deep TSF – 0.4 Moz
Figure 4.14: Attributable Mineral Reserves per operation and growth projects (million Au-Eq oz)
Dec-10
Dec-11
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South Africa
The South Africa region has a total
declared Mineral Resource of
160.2 million ounces (December
2010: 173.8 million ounces).
The region’s Mineral Reserve
amounts to 61.1 million ounces
(December 2010: 60.2 million
ounces). These figures are net of
1.9 million and 1.7 million ounces
of depletion respectively.
The region’s West Wits Tailings
Treatment Project (WWTTP) has
a gold Mineral Resource of
4.2 million ounces (December
2010: 4.5 million ounces) and
a gold Mineral Reserve of
2.9 million ounces (December
2010: Nil).
The decline in the Mineral
Resources was due to pay-limit
increases, resource clean-up and
changes in geological models. The
rise in Mineral Reserves was largely
attributable to the 5.2 million ounce
increase at South Deep and the first-
time inclusion of 2.9 million ounces
from our WWTTP (KDC only).
However, the surface and
underground uranium Mineral
Resource reported in December 2010
for our West Wits operations (KDC
and South Deep) has been excluded
from the December 2011 declaration,
but retained in the inventory.
South America
The South America region has a
declared gold Mineral Resource
of 3.9 million ounces (December
2010: 4.1 million ounces) and a gold
Mineral Reserve of 3.1 million ounces
(December 2010: 2.7 million ounces).
The copper Mineral Resources and
Mineral Reserves are 1,386 million
pounds (December 2010: 1,464
million pounds) and 1,126 million
pounds (December 2010: 965 million
pounds) respectively.
The total managed gold and copper
equivalent Mineral Resource and
Mineral Reserve ounces are
7.7 million ounces (December 2010:
8.1 million ounces) and 6.1 million
ounces (December 2010: 5.3 million
ounces) respectively. These figures
are net of 0.5 million and 0.6 million
ounces of depletion respectively.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
122
Growing Gold Fields
West Africa
The West Africa region has a
declared gold Mineral Resource
of 25.2 million ounces (December
2010: 17.3 million ounces) and a
gold Mineral Reserve of 13.7 million
ounces (December 2010: 11.3 million
ounces). These figures are net of 1.1
million ounces and 1.0 million ounces
of depletion respectively.
4.3.4 Growth Project summary
Changes in the Mineral Resource
position of our growth projects
at December 2011 compared to
December 2010 is as follows:
(cid:2)(cid:3) The total Arctic Platinum Project
(APP) Mineral Resources
now amount to 12.2 million
ounces 2PGE + Au following a
scoping level hydrometallurgical
processing study for the Suhanko
deposits. APP is 100% attributable
to Gold Fields
(cid:2)(cid:3) The Chucapaca project in
southern Peru underwent a
scoping study in 2011, which
included additional extensional
and infill drilling and now has a
gold equivalent Mineral Resource
of 7.6 million ounces – 51%
attributable to Gold Fields
(cid:2)(cid:3) Damang Super Pit: The Mineral
Reserves for the Damang Super
Pit increased from 1.1 million
ounces to 2.5 million ounces
in 2011 and the project now
has a 7.4 million ounce
Mineral Resource
(cid:2)(cid:3) The maiden Inferred Mineral
Resource of 1,060 million
pounds copper was declared for
the Woodjam project in British
Columbia, Canada and is 51%
attributable to Gold Fields
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
123
Growing Gold Fields
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
124
Growing Gold Fields
Figure 4.15 Gold Fields Mineral Resource and Mineral Reserve Statement as at 31 December 2011
Mineral Resources1 (100%)
Mineral Reserves1 (100%)
Attributable R & R (%)
31 Dec 2011
Dec
2010
31 Dec 2011
Tonnes
(Mt)
Grade
(g/t)
Gold
(Moz)
Gold
(Moz)
Tonnes
(Mt)
Grade
(g/t)
Gold
(Moz)
Dec
2010
Gold
(Moz)
31 Dec 2011
Resource
(Moz)
Reserve
(Moz)
(%)
24.2
63.3
87.5
4.9
2.6
3.838
5.314
3.845
5.765
7.1
37.9
5.7
2.3
1.302
2.813
1.321
2.820
100
100
3.838
5.314
1.302
2.813
3.3
9.152
9.610
45.0
2.8
4.114
4.141
100
9.152
4.114
GOLD
Australia Operations
Agnew2
St Ives
Total
Australasia region
South African Operations
Beatrix
(underground)
KDC E
(underground)
KDC W
(underground)
Total KDC (ug)
South Deep
(underground)3
Beatrix Surface
Rock Dumps
WWTTP (Tailings
Storage Facility)
WW Surface
Rock Dumps7
Total South
Africa region
Peru Operation
Cerro Corona
Total South
America region
Ghana Operations
Damang
Tarkwa
Total West
Africa region
Total International
Operations
GOLD ONLY
Total Gold
Managed
Total Gold
Attributable
53.5
6.5
11.120
15.934
34.0
4.5
4.901
5.367
100
11.120
4.901
94.7
12.6
38.435
40.233
27.8
7.8
6.951
7.937
100
38.435
6.951
66.3
11.7
24.999
31.051
26.5
7.5
6.382
11.850
100
24.999
6.382
161.0
355.8
12.3
63.434
71.284
54.3
7.1
80.974
81.454
225.0
7.6
5.5
13.333
19.787
100
63.434
13.333
39.584
34.533
92.4
74.820
36.576
12.4
0.4
0.156
0.078
5.5
0.3
0.057
0.078
100
0.156
0.057
430.5
0.3
4.164
4.490
247.2
0.4
2.916
0.000
4.131
2.916
14.9
0.7
0.327
0.594
14.9
0.7
0.327
0.454
100
0.327
0.327
1,028.0
4.8 160.175 173.834
580.8
3.3
61.118
60.219
153.989
58.110
151.7
0.8
3.946
4.115
110.0
0.9
3.072
2.672
98.5
3.887
3.026
151.7
0.8
3.946
4.115
110.0
0.9
3.072
2.672
98.5
3.887
3.026
165.4
316.5
1.9
1.5
10.044
4.638
61.7
15.123
12.642
264.8
1.7
1.2
3.390
10.345
2.080
9.249
90
90
9.040
13.611
3.051
9.310
481.9
1.6
25.167
17.280
326.5
1.3
13.735
11.329
90
22.651
12.361
721.1
1.7
38.266
31.004
481.6
1.4
20.921
18.142
35.690
19.502
1,749.1
3.5 198.441 204.839 1,062.4
2.4
82.040
78.361
-
-
1,667.1
3.5 189.678 199.051
1,011.0
2.4
77.612
74.571
189.678
77.612
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
COPPER + GOLD
Cerro Corona
Cu as Au-Eq4
Total Cerro Corona
(Au + Cu as Au-Eq)4
Growth Projects
PLATINUM
(Finland)
- APP Project6
Figure 4.15: Gold Fields Mineral Resource and Mineral Reserve Statement as at 31 December 2011 (continued)
125
Growing Gold Fields
COPPER
(Peru) -
Cerro Corona
Tonnes
(Mt)
Grade
(%Cu)
Copper
(Mlbs)
Copper
(Mlbs)
Tonnes
(Mt)
Grade
(%Cu)
Copper
(Mlbs)
Copper
(Mlbs)
Copper (Cu) only
144.1
0.45
1,386
1,464
110.0
0.51
1,126
965
Au - Eq
(Moz)
Au - Eq
(Moz)
3.729
3.992
7.676
8.107
-
-
-
-
-
-
-
-
Au - Eq
(Moz)
Au - Eq
(Moz)
3.031
2.624
6.103
5.296
-
7.560
6.012
Copper
(Mlbs)
Copper
(Mlbs)
1,366
1,109
Au - Eq
(Moz)
Au - Eq
(Moz)
3.673
2.985
(%)
98.5
(%)
98.5
Tonnes
(Mt)
2PGE
+ Au
(g/t)
2PGE
+ Au
(Moz)
2PGE
+ Au
(Moz)
Tonnes
(Mt)
2PGE
+ Au
(g/t)
2PGE
+ Au
(g/t)
2PGE
+ Au
(g/t)
Total 2PGE + Au
161.9
2.3
12.159
12.601
COPPER - GOLD
- SILVER (Peru) -
Chucapaca Project
Total Au-Eq oz4
(Au + Ag + Cu)
COPPER - GOLD
- MOLYBDENUM
(Kyrgyzstan) - Ta-
las Project
Total Au-Eq oz4
(Au + Cu + Mo)
GOLD
(Mali) -
Yanfolila Project
Tonnes
(Mt)
132.7
Grade
(g/t)
Au - Eq
(Moz)
Au - Eq
(Moz)
-
7.628
5.639
Tonnes
(Mt)
Grade
(g/t)
Au - Eq
(Moz)
Au - Eq
(Moz)
423.0
-
11.695
11.710
Tonnes
(Mt)
Grade
(g/t)
Gold
(Moz)
Gold
(Moz)
Total Au
9.1
2.5
0.740
0.740
COPPER Canada -
Woodjam Project5
Tonnes
(Mt)
Cu % Cu (Mlb) Cu (Mlb)
Total Cu
146.5
0.33
1,060
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2PGE
+ Au
(Moz)
2PGE
+ Au
(Moz)
(%)
100
12.159
-
Au - Eq
(Moz)
Au - Eq
(Moz)
3.890
-
(%)
51
Au - Eq
(Moz)
Au - Eq
(Moz)
(%)
60
7.017
-
Gold
(Moz)
Gold
(Moz)
85
0.629
-
Cu (Mlb) Cu (Mlb)
51
541
-
Mineral Resources are inclusive of Mineral Reserves. All tonnes relate to metric units. Rounding-off of figures may result in minor computational
discrepancies, where this happens it is not deemed significant.
In Australia (Agnew and St Ives), a gold price of A$1,550 and A$1,400 was used to determine the Mineral Resources and Mineral Reserves
respectively. Mineral Resources for the South African operations were determined at R340,000/kg, while the Mineral Reserves were determined at
R310,000/kg.
In South America (Cerro Corona) and West Africa (Damang and Tarkwa), the Mineral Resources and Mineral Reserves were determined using a
gold price of US$1,450/oz and US$1,300/oz, and a copper price of US$3.90/lb and US$3.50/lb respectively.
For the Growth Projects, (i) Talas used US$1,150/oz for gold, US$3.00/lb for copper and US$15/lb for molybdenum, (ii) Chucapaca used US$1,450/
oz for gold, US$3.90/lb for copper and US$25.5/oz for silver, (iii) Yanfolila used US$1,150/oz for gold and (iv) Woodjam used
US$1,450/oz for gold and US$3.90/lb for copper and APP used US$1,450/oz for gold, US$1,775/oz for platinum, US$625/oz for palladium,
US$3.90/lb for copper and US$10.89/lb for nickel.
1 Managed, unless otherwise stated
2 Agnew deposits, Miranda & Vivien, are subject to a royalty agreement
3 The BEE transaction concluded in December 2010, grants an empowerment consortium 10% of South Deep. Based on the relevant sliding
scale of the vesting of the economic benefit attached to the 10% and the current Life of Mine profile, the Mineral Resource and Mineral Reserve
portion attributable to Gold Fields is 92.4%
4 Copper, silver and molybdenum are reported as gold equivalent ounces (commodity revenue is divided by the gold price for the conversion to
gold equivalent ounces)
5 Woodjam is a copper deposit with gold as a by-product
6 APP's declared Mineral Resource is pit constrained for the Konttijärvi and Ahmavaara deposits (7.1 Moz 2PGE + Au) and includes the original
unconstrained SK reef estimates (5.1 Moz 2PGE + Au)
7 The WWTTP has been included into the gold Mineral Reserve figures this year, whereas the uranium Mineral Resource figures have been
excluded, but remain in the inventory
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
126
Transparency and accountability
5. Securing our
future responsibly
‘Securing our future responsibly’ means pursuing true business
sustainability through the effective management of our long-term
risks and opportunities – and through the implementation of our
Vision and Values.
Our long history of operating world-class mining operations means
we have a particularly strong understanding of the fact that our
long-term success will be underwritten by our current policies,
actions and investments. It also means we are aware of our
(cid:19)(cid:3)(cid:4)(cid:15)(cid:3)(cid:14)(cid:17)(cid:16)(cid:15)(cid:20)(cid:8)(cid:6)(cid:7)(cid:19)(cid:13)(cid:12)(cid:15)(cid:19)(cid:3)(cid:30)(cid:3)(cid:18)(cid:3)(cid:20)(cid:3)(cid:7)(cid:19)(cid:8)~(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:12)(cid:24)(cid:8)(cid:23)(cid:12)<(cid:8)(cid:20)(cid:23)(cid:7)(cid:19)(cid:7)(cid:8)<(cid:3)(cid:18)(cid:18)(cid:8)(cid:3)!(cid:13)(cid:16)(cid:17)(cid:20)(cid:8)(cid:12)(cid:5)(cid:6)(cid:8)
long-term business interests.
This approach makes it incumbent on us to recognise the many
(cid:15)(cid:12)(cid:15)*(cid:12)(cid:13)(cid:7)(cid:6)(cid:16)(cid:20)(cid:3)(cid:12)(cid:15)(cid:16)(cid:18)(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:15)(cid:12)(cid:15)*(cid:14)(cid:15)(cid:16)(cid:15)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)(cid:31)’(cid:15)(cid:16)!(cid:3)(cid:17)(cid:19)(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:3)(cid:19)(cid:19)(cid:5)(cid:7)(cid:19)(cid:8)(cid:20)(cid:23)(cid:16)(cid:20)(cid:8)(cid:16)(cid:24)(cid:24)(cid:7)(cid:17)(cid:20)(cid:8)
our business – including:
(cid:21)(cid:8) The effective management and development of the individual
employees who make up our workforce, which will ensure we have the
(cid:6)(cid:3)(cid:4)(cid:23)(cid:20)(cid:8)(cid:20)(cid:16)(cid:18)(cid:7)(cid:15)(cid:20)(cid:8)(cid:16)(cid:15)(cid:31)(cid:8)(cid:19)|(cid:3)(cid:18)(cid:18)(cid:19)(cid:8)(cid:20)(cid:12)(cid:8)(cid:31)(cid:6)(cid:3)(cid:27)(cid:7)(cid:8)(cid:24)(cid:5)(cid:20)(cid:5)(cid:6)(cid:7)(cid:8)(cid:13)(cid:6)(cid:12)(cid:14)(cid:20)(cid:16)(cid:30)(cid:3)(cid:18)(cid:3)(cid:20)’
(cid:21)(cid:8) Promotion of the physical, mental and emotional wellbeing of our
employees, which will underwrite current and future productivity
(cid:21)(cid:8) Management of our relations with local stakeholders in a range of
contrasting contexts, which will ensure we are able to successfully
pursue growth in the new operating environments
(cid:21)(cid:8) Maintenance of strong business ethics, which will protect both our
reputation and our ability to establish transparent and mutually
rewarding relations with governments, business partners and suppliers
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
127
Transparency and accountability
Contents
5. Securing our future responsibly
Becoming the employer of choice .......................... Page 128
Promoting productivity, health and wellbeing ......... Page 136
Building mutually beneficial community relations ... Page 141
Forging strong relations through business ethics ... Page 154
Highlights
US$43m
Investment in internal training and skills development
US$54m
Socio-economic development (SED) spend in 2011
541
Number of employee hostel units upgraded in
South Africa during 2011
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
128
Securing our future responsibly
5.1 Becoming the
employer of choice
If we are to achieve our Goal of
5 million gold equivalent ounces
in production or in development
by 2015, we need a well-trained,
motivated and stable workforce
– including technical experts,
managers and operational personnel.
This is as true at our more labour-
intensive, mature mines in South
Africa as it is for our mechanised
mines in Australia and at South Deep.
The challenge is exacerbated by the
mining sector’s global ‘war for talent’,
the ageing nature of the global
mining workforce and the ongoing
boom in the extractive industries –
all of which make recruitment and
turnover a key risk for Gold Fields
– as well as its peers.
In part, this prompted us to develop
a new People Strategy in 2011. It is
based on:
(cid:2)(cid:3) Building the Gold Fields global
brand and making us the
‘employer of choice’
(cid:2)(cid:3) Creating a ‘borderless’
Gold Fields that offers
employees global mobility
(cid:2)(cid:3) Establishing a centralised and
integrated Human Resources
Data Reporting System
(cid:2)(cid:3) Attracting and retaining talent,
including through the review of
our base salaries, short- and
long-term incentives, and quality
of working life
(cid:2)(cid:3) Enhancing our internal and
external skills pipelines
We aim to employ and develop local
employees wherever we operate and
at all levels of our business. This is
true of all of our operating locations
– whether we are subject to local
employment regulations or not. We
believe our approach will help build
local capacity, broaden local skills
pools, enhance our reputation – and
so help underpin the long-term
sustainability of our business. This
approach is in line with our efforts to
empower historically disadvantaged
individuals within our workforce in
South Africa (p133-135).
During 2011, there were no large-
scale forced retrenchments at our
operations. Although our workforce in
South Africa was reduced by 1.9%,
this was through natural attrition and
voluntary separation. In this way, there
will be a gradual, un-forced workforce
reduction in South Africa, through
which the long-term sustainability of
the region will be assured – without
compromising production.
In 2011, we formalised the voluntary
separation process so that all
employees who elect to take the
separation package are provided
with seven weeks of portable
skills training– before leaving the
company. This is with the aim of
delivering the skills and knowledge
that will help them establish
sustainable livelihoods, for example
in construction, plumbing and
related trades.
5.1.1 Providing productive and
worthwhile employment positions
Gold Fields had a total of 46,378
employees in service at year end
(2010: 47,268) – with 90.1% of them
located in South Africa. A total of
94% of our employees in Australia,
Ghana and Peru are nationals. A
total of 63%1 of employees in South
Africa are Historically Disadvantaged
South Africans (HDSAs). The vast
majority of the remainder are from
countries in the Southern African
Development Community.
Additional content online
<<<+(cid:4)(cid:12)(cid:18)(cid:31)(cid:14)(cid:7)(cid:18)(cid:31)(cid:19)+(cid:17)(cid:12)+_(cid:16)
1 Excluding foreign nationals
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
129
Securing our future responsibly
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Figure 5.1: Total employees
Figure 5.2: Total employees by
region (%)
Figure 5.3: Total staff turnover rate
by employee type (%)
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30,000
20,000
10,000
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Australasia
South Africa
South America
West Africa
7.6
0.8
2008
2009
2010
2011
35
30
25
20
15
10
5
0
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2010
2011
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Figure 5.4: Group human resources performance
Category
Total employees (excluding contractors)
HDSA employees in South Africa (%)
HDSA employees in South Africa (% - management)
2011
2010
2009
2008
46,378
47,268
51,122
49,325
63.0
42.7
61.5
41.4
60.9
39.1
58.4
37.2
National employees in Ghana (%) (excluding contractors)
98.00
96.92
96.91
97.08
Minimum wage ratio
Female employees (%)
Ratio of basic salary of men to women
Employee wages and benefits (Rm)
Average training (hours per employee)
Employee turnover (%)
2.52
8.0
1.06
9,448
1282
10.72
2.72
7.4
1.05
7,514
683
13.41
2.79
6.9
1.07
6,612
650
13.70
2.52
5.7
1.12
5,804
584
18.57
2 Difference in training hours between 2010 and 2011 reflects the implementation of an enhanced data reporting methodology
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
130
Securing our future responsibly
Improving capabilities
5.1.2
through training
Training statistics at the Academy for
2011 include the following:
The provision of world-class training
plays a vital role in enhancing
employee productivity and safety –
as well as the long-term capabilities
of our company. It also plays a key
role in attracting and retaining the
best talent in a highly competitive
global labour market.
During 2011, we invested a total
of R310 million (US$43 million)
in internal training and skills
development across the Group
(2010: R229 million/US$31 million).
This helped us deliver training to
a total of 44,940 employees and
contractors (including multiple
attendances by individuals).
South Africa
Our training efforts are underpinned
by our maintenance of strong
internal training institutions. This
includes our high-profile Gold Fields
Business and Leadership Academy
in South Africa.1 The Academy
delivers high-quality, on-site
training courses, including mining,
engineering, metallurgy and mineral
resources management.
It does so using an innovative
training approach that focuses on
tailored programmes adapted to
each individual’s specific level,
education and maturity – as well as
subsequent monitoring.
(cid:2)(cid:3) Induction and refresher training:
43,717 (2010: 35,241)
(cid:2)(cid:3) New skills training: 10,943
(2010: 20,051)
(cid:2)(cid:3) Adult Basic Education and
Training (ABET) programmes:
1,555 (2010: 2,997)
(cid:2)(cid:3) Engineering learnerships: 265
(2010: 234)
(cid:2)(cid:3) Mining learnerships: 340
(2010: 388)
In addition to the provision of
training at the Academy, we
provided a total of 106 university
bursaries to employees.
Plans have been approved for the
establishment of a new mechanised
mining training centre at South
Deep in 2012. This will provide
comprehensive training to operating
and maintenance staff – and build on
the highly specialised skills we have
already developed at the site. This
will directly support mine productivity,
whilst also reducing our need to
‘buy-in’ mechanised mining skills
from an intensely competitive global
market. Furthermore, the Centre will
ultimately develop a highly skilled
cadre of mechanised miners in South
Africa, which will not only support our
future in the country – but that of the
sector as a whole.
Ghana
In 2011, we carried out an audit
to ensure we had the right skills to
support our shift towards owner-
operation – and to help us address
skills shortages amongst nationals
in the country (p131). The results
of this audit helped inform plans
for the future development
of an engineering training centre
in Tarkwa.
1 The Academy is accredited by the Mining
Qualifications Authority, the Construction
Education and Training Authority. It
works closely with the Chamber of Mines
Education Advisory Council, the mining
advisory committees of the University
of Witwatersrand and the University of
Johannesburg and the Mine Education
Trust Fund.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
The centre is expected to act
as a major regional training hub
for mine engineers, artisans and
maintenance engineers. This will
deliver a solid internal skills pipeline
to feed our owner-operated mines
– and support future production
expansion at Damang.
Furthermore, the centre will enhance
stakeholder recognition of our
long-term investment in Ghana
and its people.
What are learnerships?
Learnerships are ongoing
training programmes provided
to our workforce in South
Africa. They include both
theoretical and practical
training and lead to the
award of nationally
recognised qualifications.
5.1.3 Achieving
success through careful
talent management
Effective talent management is
playing a key role in our ability
to compete for high quality
technical, engineering and mineral
resource specialists. Furthermore,
it is supporting the successful
‘devolution’ of senior management
within Gold Fields, through the
cultivation of committed, high-
calibre leaders within each region.
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Australia
In Australia, labour competition is
particularly intense due to the local
energy and mining boom, as well
as Western Australia’s dynamic
‘fly-in, fly-out’ labour market. This
has contributed to a turnover rate of
28%. Whilst very high by ordinary
standards, this is relatively normal in
the Australian mining context.
Nonetheless, we are re-energising
our efforts to attract and retain high
quality personnel at our operations.
Initiatives started in 2011 include:
(cid:2)(cid:3) Centralisation of all recruitment
activity at a regional level
(cid:2)(cid:3) Development of a
compelling Employee
Value Proposition strategy
(cid:2)(cid:3) Improved identification of critical
roles and succession planning
(cid:2)(cid:3) Establishment of a stronger
market-presence, including
awareness raising, advertising
and branding
(cid:2)(cid:3) Targeted recruitment of
expatriate technical
specialists, including those
from South Africa
We also built on a number of
initiatives implemented in 2010.
These include, for example,
our regular salary review, our
employee share and bonus
schemes and our ‘fast-track’
graduate development programme.
In addition, we are continuing our
innovative leadership development
programme, run in partnership
with the Australian Institute of
Management and the University of
Western Australia. The programme,
which runs dedicated three-month
courses aimed at supervisors
and middle managers, has been
expanded to include senior
managers. In 2011, approximately
50 employees took part in this
intensive programme.
Collectively, these actions are part
of a strategy to establish
Gold Fields as an employer of
choice in the Australian market,
based on the unique opportunities
we can offer in terms of
development and global mobility.
www.aim.com.au
www.uwa.edu.au
131
Securing our future responsibly
Ghana
In Ghana, the market for senior
nationals remains intense. Local
regulations require that a maximum
of 5% of management, supervisory
and technical positions at mining
companies can be filled by
expatriates. A relatively limited pool
of local specialists and managers,
as well as the desire of many skilled
nationals to work outside of Ghana,
contribute to intense competition
for their services. Although our
turnover in Ghana has increased
from a relatively modest 5% to 7.4%,
it is disproportionately focused on
skilled individuals in middle- and
senior-management.
Our prime means of managing this
challenge is an intensive succession
planning programme. Whenever
we fill a post with an expatriate
employee, we also develop a
national employee using formalised
Individual Development Plans. This
guarantees a constant pipeline
of continually developing national
talent, which helps underpin both
our business performance within the
country and our long-term social
licence to operate.
As a result of such efforts, we
increased the proportion of
nationals in senior positions to
60.5% (2010: 56.4%).
www.gimpa.edu.gh
www.darden.virginia.edu
Peru
In Peru, we run an internal
leadership programme for all C-Band
employees to identify staff that will
eventually move into middle- to
senior management levels. Identified
individuals are provided with the
relevant resources, coaching and
training to make this progression.
In addition, we have a formal
leadership programme for the
development of high-quality
management personnel and
supervisors. These are run in close
partnership with the University
of Piura and DBM Peru, and
cover issues such as leadership,
human rights, executive coaching,
technical skills and financial skills.
During 2011, 51 managers and
supervisors completed these
extensive programmes.
Other actions to address this
challenge include:
www.udep.edu.pe
www.dbmperu.com
(cid:2)(cid:3) Enhanced offerings around
structured and predictable
career progression
(cid:2)(cid:3) Annual salary surveys to ensure
we remain more than competitive
(cid:2)(cid:3) Annual action plans to address
relevant human resources issues
identified in our climate surveys
(cid:2)(cid:3) Facilitation of the temporary
transfer of senior nationals to
other Gold Fields regions on an
expatriate basis
We continued to run our Senior
Leadership Development
programme with the Ghana
Institute of Management and Public
Administration. The programme
includes attendance at the Darden
School of Business at the University
of Virginia in the United States.
During 2011, 10 senior officials took
part in the programme.
South Africa
In South Africa, we have enhanced
and formalised our leadership
development offering, which
is tailored to each employee’s
Individual Development Plan. In
particular, the Gold Fields Business
and Leadership Academy is piloting
an approach that ultimately aims
to significantly enhance leadership
and succession across the Group.
The Academy is accredited by the
Mines Qualifications Authority, the
Construction Education and
Training Authority and the Institute
of Leadership and Management.
It offers a comprehensive range
of in-house and on-site training
courses including mining
engineering, metallurgy and
mineral resources management.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
132
Securing our future responsibly
5.1.5 Respecting human rights
Human rights represent a key part
of our Sustainable Development
Framework and are expressly
addressed in our new Code of
Ethics (p25) and Human Rights
Policy. As a signatory to the United
Nations Global Compact, and as
part of our commitment to the
principles of the ICMM’s
Sustainable Development
Framework, Gold Fields upholds
the highest standards for the
protection of human rights.
These include:
(cid:2)(cid:3) Freedom from child labour
(cid:2)(cid:3) Freedom from forced or
compulsory labour
(cid:2)(cid:3) Freedom from discrimination
(cid:2)(cid:3) Freedom of association and
collective bargaining
www.unglobalcompact.org
www.icmm.com
The Academy is represented in
a number of external bodies,
including the Chamber of Mines
Education Advisory Council, the
mining advisory committees of the
University of Witwatersrand and the
University of Johannesburg and the
Mine Education Trust Fund.
The Academy uses a unique
training approach that focuses on
tailored programmes adapted to
each individual’s specific level,
education and maturity to ensure
the establishment of an integrated
and long-term skills and leadership
pipeline, which will aid the internal
mobility of our managers.
As part of this approach we offer our
employees a range of leadership
programmes with a wide range
of institutions, including Duke
University in the United States,
the Gordon Institute of Business
Science in Johannesburg and the
Louis Allen Leadership Development
programme. Beyond these core
programmes, we offer relevant
employees additional tailored training
programmes based on electives
provided through third-parties.
www.gibs.co.za
www.louisallenworldwide.com
5.1.4 Promoting constructive
labour relations
By the end of 2011, none of our
employees in Australia had opted to
join unions. In contrast, 97% of our
employees in South Africa and 95%
of our employees in Ghana belong
to unions. In Peru, a trade union has
started at our Cerro Corona mine,
with limited participation to date.
The three-year wage agreement
signed with the Ghanaian
Mineworkers Union in October 2010
remains current, meaning no wage
re-negotiation was necessary during
2011. This demonstrates the healthy
and stable nature of our relationship
with organised labour in Ghana.
In July 2011, our operations in
South Africa were impacted by a
sector-wide strike related to the
annual wage negotiation process.
The strike, which was called by
the National Union of Mineworkers
(NUM), Solidarity and the United
Association of South Africa (UASA)
halted production for five days.
This resulted in lost production
equivalent to 43,000 ounces of gold.
Joint negotiations with other affected
gold mining companies (through the
Chamber of Mines) produced a two-
year wage agreement that reflected
compromise on both sides.
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Securing our future responsibly
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5.1.6 Transformation
and diversity
Gold Fields remains committed
to the creation and maintenance
of a diverse and demographically
representative workforce.
Empowerment of Historically
Disadvantaged South Africans
(HDSAs)1
In South Africa we recognise the long-
term value of driving transformation
within the mining sector – and society
more broadly. Under the revised
Mining Charter (p155), we are
required to fill 40% of all management
positions with HDSAs by 2014.
In 2011, we achieved the following
distribution of HDSAs at senior-
to middle management levels in
South Africa:
(cid:2)(cid:3) Group Board: 36% (2010: 36%)
(cid:2)(cid:3) Group ExCo: 29% (2010: 15%)
(cid:2)(cid:3) SA-domiciled Group ExCo: 44%
(2010: 37%)
(cid:2)(cid:3) Gold Fields South Africa Board:
60% (2010: 60%)
(cid:2)(cid:3) Gold Fields South Africa ExCo:
38% (2010: 38%)
(cid:2)(cid:3) Senior management (E-Upper
and above): 30% (2010: 32%)
(cid:2)(cid:3) Middle management (D-Upper
and E-Lower): 41% (2010: 40%)
Figure 5.5: HDSAs within the Gold Fields workforce in South Africa (%)2
Employees
Middle management (D-Upper to E-Lower)
Senior management (EU<)
100
90
80
70
60
50
40
30
20
10
0
58.4
35.9
11.8
2008
60.9
61.5
37.2
25.0
39.7
32.4
63.0
41.0
29.6
2009
2010
2011
Although we continued to make
progress in this respect, we
acknowledge more still needs to
be done. Our ongoing efforts are
primarily focused on a sustainable,
long-term approach based on
targeted education, training
and development of our HDSA
employees. However, the lead-time
for this process is relatively long.
As a result, we supplement this
approach with the appointment of
high quality, externally recruited
HDSA managers into key
company positions
Employment of nationals
The employment of nationals is a
key component of our social licence
to operate in both Ghana and Peru.
The proportions of our workforce
made up by nationals are:
(cid:2)(cid:3) Peru: 99.5% (2010: 99.4%).
(cid:2)(cid:3) Ghana: 98.0% (2010: 96.9%)
In Ghana, we are particularly
focused on ensuring that nationals
are adequately represented
amongst senior managers (currently
60.54%) to help address intense
competition for local talent (p131).
1 White females are included within the definition of HDSAs
2 Percentages relate to our total workforce, excluding foreign nationals who were included in the
figures reported last year
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
134
Securing our future responsibly
Case study
Phasing out the Fanakalo language in
South Africa
In 2011, Gold Fields rolled out a new Business Languages Policy for
its South Africa region, which includes a strategy for phasing-out the
Fanakalo language used at its operations.
Historically, employees in South Africa have communicated using
Fanakalo – an artificial hybrid of Zulu, English and Afrikaans. The
language was originally developed within the mining sector to allow
communication between groups who speak different languages – a
significant challenge within largely migrant workforces. Due to its
history, Fanakalo is associated in the minds of many with the Apartheid
era – and is believed to be disrespectful to speakers of local
languages. Furthermore, the relatively simplistic nature of Fanakalo
means it is becoming less useful in an increasingly sophisticated
operational environment – and one in which important technical,
safety and health information needs to be clearly understood. This is
particularly the case as Gold Fields advances mechanised mining and
development methods within its mines.
The use of Fanakalo will be phased out using a strategy developed
in partnership with the Language School at Wits University, which will
run until 2022. An external research team has established that three
African languages – Zulu, Xhosa, and Sotho – are currrently
dominant within the Gold Fields workforce. These will be used to
replace Fanakalo as the main means of communication at
Gold Fields mines – whilst English will be used for business
purposes. As part of the strategy, all employees will be given access
to language training programmes, so they are able to speak and
understand the ‘official’ Gold Fields languages. The current Adult
Basic Education and Training programme, which teaches English
and numeracy, will continue, whilst new language courses will be
introduced for the three African languages. These will be based on 80-
hour interactive language programmes, which will be embedded at the
operations and integrated into the performance management system.
“With proper communication you can
inject magic into a team and achieve
great things from a safety and production
point of view.”
Peter Turner, Executive Vice-President: South Africa Region
www.witslanguageschool.com
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Representation of women
Figure 5.7: Group female employees (%)
135
Securing our future responsibly
In line with our transformation
commitments, we are seeking higher
levels of representation of women
throughout Gold Fields – from the
mines to the boardroom. Women
currently make up the following
proportions of positions within
Gold Fields:
(cid:2)(cid:3) Board: 21.4% (2010: 21.0%)
(cid:2)(cid:3) Senior management (E-Upper
and above): 8.9% (2010: 2.7%)
(cid:2)(cid:3) Middle management
(D-Upper and E-Lower):
13.3% (2010: 14.7%)
(cid:2)(cid:3) Mining: 3.6% (2010: 3.3%)
(cid:2)(cid:3) Total: 8.0% (2010: 7.4%)
Representation within our Board
means we are ahead of the 20%
target currently being considered
by the Securities and Exchange
Commission in the United States
for 2013.
We are continuing to face a number
of challenges in our efforts to
attract women to the company.
These include an inadequate pool
of skilled female workers, as well
as perceptions around the physical
demands of mining.
Figure 5.6: Group basic salary of
men to women (1:x)
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
1.12
1.07
1.05
1.06
2008
2009
2010
2011
Employees
Middle management (D-Upper E-Lower)
Senior management (EU<)
25
20
15
10
5
0
10.7
5.7
0.0
2008
13.6
8.3
6.9
2009
14.7
7.4
2.7
2010
13.3
8.9
8.0
2011
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
136
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Figure 5.8: Health performance
South Africa
2011
2010
2009
2008
Noise Induced Hearing Loss submissions
(Rate per 1000 employees)
1.35
1.51
1.04
1.80
Silicosis submissions
(Rate per 1000 employees)
Chronic Obstr. Airways Disease (COAD)
(Rate per 1000 employees)
Cardio-Respiratory Tuberculosis (CRTB)
(Rate per 1000 employees)
Employees on Highly-Active Anti-
Retroviral Treatment (HAART)
Started HAART (Individuals)
Retained on HAART (Individuals)
Exited HAART (Individuals)
2.04
3.11
3.52
5.45
1.27
1.54
0.68
1.55
18.02
15.97
13.89
23.79
3,523
2,991
2,155
1,492
1,010
3,523
573
5,150
2,991
2,159
4,114
2,155
1,959
3,136
1,492
1,644
5.2 Promoting productivity,
health and wellbeing
In many senses, health poses as
much of a legal, operational and
reputational risk as our safety
performance – albeit over a longer
time scale. Our approach to
managing this risk is characterised
by our holistic focus on worker
wellbeing, which goes beyond
conventional compliance-based
measures of occupational health
and communicable disease.
This is the rationale behind our
innovative and sector-leading
24 Hours in the Life of a Gold Fields
Employee programme (p140). This
includes, for example, a broad-range
of initiatives around occupational
health and safety, healthcare, living
conditions, nutrition, education,
sport and recreation. Through this
approach, we aim to ensure that we
have a fit and motivated workforce.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
5.2.1 Promoting
occupational health
Our deep underground and
relatively labour-intensive South
African operations tend to pose
higher occupational health risks
than our other mines. This includes,
for example, risks around Silicosis,
Chronic Obstructive Airways Disease
(COAD) and Tuberculosis (TB).
All employees are subject to initial
and annual medical surveillance.
These are tailored in line with local
legal requirements, as well as
operation- and role-specific health
risks. The assessments are aimed at
preventing, identifying and treating
occupational diseases.
In 2011, we submitted the following
cases for certification:
(cid:2)(cid:3) 66 cases of COAD (2010: 81)
(cid:2)(cid:3) 139 cases of Noise Induced
Hearing Loss (NIHL) (2010: 78)1
(cid:2)(cid:3) 107 cases of Silicosis (2010:164)
(cid:2)(cid:3) 913 cases of CRTB2
(2010: 1,108)
During 2011, we opened a new,
dedicated Occupational Health
Centre at KDC, which carries
out comprehensive occupational
health assessments of all new and
existing employees – as well as
selected periodic assessments. The
Centre has significantly improved
assessment quality, as well as
turnaround times – supporting our
proactive management of employee
health risks. The results are used
to identify high-risk individuals and
those with medical conditions, who
are then moved to workplace roles
that pose a lower health risk.
1 Increase in cases of NIHL is partly due to
implementation of new methodology in our
South America region
2 New and re-treatment cases
137
Securing our future responsibly
Figure 5.9: Occupational disease in the South Africa region
(Rate per 1,000 employees)
NIHL
CRTB
Silicosis
COAD
18.02
15.97
13.89
25.0
20.0
15.0
10.0
5.0
0.0
23.79
5.45
1.80
1.55
2008
3.52
1.04
0.68
2009
This helps ensure they are kept
in employment, whilst reducing
the likelihood of an occupational
disease developing in the first place.
Plans are in place to roll out a
similar model throughout the Group
and to increase the frequency of
periodic assessments.
We also implement quantitative
Health Risk Assessments under our
24 Hours in the Life of a Gold Fields
Employee programme.
In addition to the occupational
diseases identified above, these
confidential assessments address
general health and lifestyle issues
such as hypertension, diabetes,
cholesterol, diet and mental health.
Once employees have participated
in the process, they are referred
to practitioners, who pro-actively
address their well-being. Our
high performance centres and
employee assistance programmes
are available to provide appropriate
support and assist in structuring
lifestyle interventions.
3.11
1.54
1.51
2010
1.35
1.27
2.04
2011
Engineering controls
As with safety risks (p59-60), one
of the most important ways we
can reduce workplace health risks
is through proactive engineering,
which aims to reduce noise and dust
levels in line with the Mine Health
and Safety Council milestones for
2013. Measures taken during 2011
to reduce these risks include:
(cid:2)(cid:3) Upgrading of tip filters through
the replacement of old systems
or the installation of pre-filtration
systems to existing filters
(cid:2)(cid:3) The use of foggers to trap dust
emitted from tipping points
(cid:2)(cid:3) Footwall treatment to bind dust
to the footwall and prevent it
entering intake airways
(cid:2)(cid:3) Installation of spring-loaded tip
doors to minimise dust emissions
(cid:2)(cid:3) Analysis of individual dust filters
to sample quartz content and
further improve the measurement
of individual exposures
(cid:2)(cid:3) Reduction in noise levels from
equipment and machinery by
purchasing quieter equipment
and retrofitting noise
suppression systems
(cid:2)(cid:3) Appropriate protective
equipment for noise protection
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
138
Securing our future responsibly
Legal context
In March 2011, the South African
Constitutional Court ruled that
legislation that limited employees’
rights to claim compensation for
certain diseases including silicosis
was unconstitutional. As a result, the
Court found that employees had the
right to sue employers for common
law damages to the extent that such
employees could prove that they
had suffered loss as a result of the
negligence of the employer and
such loss could be quantified.
South Africa’s Chamber of Mines
has for some time been actively
working in tripartite forums
on the alignment and reform
of the statutory framework for
compensation in respect of
occupational lung disease. This has
been with the aim of eliminating
anomalies in the application of the
legislation, whilst not undermining
the viability of the mining industry
– or the jobs of the people who
work in it. In addition, the Chamber
of Mines and its members have
also been working on a range of
initiatives to address occupational
health and safety issues related
to former mineworkers, as well as
current mine employees.
We are currently analysing the
situation to assess – and try and
quantify – the potential for any
claims against Gold Fields. To date
no claims have been received by
the company. In a June 2011 report,
Standard & Poor’s stated that it was
premature to assess whether South
African mining companies would
be significantly impacted by
silicosis claims, and that its rating
of these companies would, subject
to any emerging developments,
remain unaffected.
In Ghana, noise and dust are
considered to be emerging
issues. During the past three years,
we have had 4 cases of NIHL
registered for compensation –
although no claims have yet been
approved by local authorities.
5.2.2 Helping employees
address HIV/AIDS, TB and
malaria
HIV/AIDS and TB
South Africa
The bulk of our workforce (90.1%)
is exposed to significant risk of
exposure to HIV/AIDS by virtue of
living and working in South Africa,
which has an adult prevalence rate
of 17.8%1 - as well as other factors
such as employee demographics,
migratory status and lifestyles.
Indeed, HIV/AIDS and TB2 remain
the largest contributors to morbidity
rates, mortality rates and retirements
due to medical causes. In 2011,
for example, we had a medical
related death rate of 3.96 per 1,000
employees – compared to our FIFR
of 0.38.
To counter this, our integrated
HIV/AIDS, Sexually Transmitted
Infections and TB (HAST) strategy
is based on promotion, prevention,
treatment and support. In addition,
it explicitly addresses the
interrelationships between HIV/AIDS,
other sexually transmitted diseases
and TB. Our approach has been
developed in cooperation with
the South African HIV Clinicians
Society, as well as a number of
other stakeholders.
Our workplace HIV/AIDS education
and awareness raising programme
is based on regular poster
campaigns, guidance documents
and condom distribution at all
workplaces. We also offer free and
confidential Voluntary Counselling
and Testing (VCT) to all our
employees in South Africa. In 2011,
our workforce participation rate was
11% (2010: 13%).
1 UNAIDS, 'Report on the Global AIDS
Epidemic 2010', www.unaids.org
2 Which is exacerbated as a result of co-
infection with HIV/AIDS
We provide free Highly Active Anti-
Retroviral Treatment (HAART) to HIV
infected employees through our
network of on-site, doctor-based
clinics. This is now provided in easy
to manage, single-dose form. In
2011, 1,010 employees in South
Africa joined our HAART programme
(2010: 1,036). This took the total
number of active participants to
3,523 (2010: 2,991). Dependants of
employees can receive HAART via
our medical aid schemes.
Those infected with HIV are provided
with support through our 24 Hours in
the Life of a Gold Fields Employee
programme. This includes a range
of services such as doctor-based
primary healthcare, nutritional
support, psychological counselling
and social services. In addition, we
provide care and support for ill health
retired employees through our home-
based care programmes in labour-
sending areas.
We place particular emphasis on the
de-stigmatisation of HIV/AIDS, both
to counter potential discrimination
and to ensure employees are willing
to participate in VCT and HAART
treatment. One of the main means by
which we address stigmatisation –
as well as potential interactions with
other issues such as TB and sexually
transmitted infections – is through the
integration of HIV/AIDS management
into our mainstream health services.
This includes, for example:
(cid:2)(cid:3) Integration of HIV/AIDS into our
general chronic disease health
management processes
(cid:2)(cid:3) Integration of VCT into
our general Health Risk
Assessments
(cid:2)(cid:3) Provision of relevant HIV/AIDS
support services through
our existing employee
assistance programme
In recognition of the potentially
close relationship between
HIV/AIDS within our workforce and
within our surrounding communities,
we co-support (with Johns Hopkins
University and the Bill & Melinda
Gates Foundation) three related
community programmes.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
139
Securing our future responsibly
This includes the Lesedi Lechabile
project near Beatrix, as well
as the Westonaria Randfontein
AIDS Project (WRAP) and the
Mothusimpilo project near KDC.
Activities include peer education,
presumptive periodic treatment and
treatment of STIs.
Ghana
Ghana has a national adult
HIV/AIDS prevalence rate of 1.5%.3
Our efforts to address HIV/AIDS take
place under our broader wellness
programmes. These are supported
by dedicated teams of trained
workplace health educators, who
carry out awareness-raising and
condom distribution.
All employees and contractors
are covered by a confidential VCT
programme. In 2011, 85% of our
employees in Ghana took part in
testing. The current HIV prevalence
rate for our Ghana operations is 1%.
Employees who test positive for HIV
are provided with free HAART – as
are their families and dependants.
Our community programmes are
supported by trained teams of
community health educators, who
carry out condom distribution at
high-traffic sites, listening groups
for weekly ‘Bo Woho Ban’ (‘protect
yourself’) radio programmes,
health-based school drama and
abstinence clubs.
During 2011, Gold Fields Ghana
won the Global Business Coalition’s
2011 Business Action on Health
Award for Workforce/Workplace
Engagement – with a particular
focus on HIV/AIDS management.
In particular, the GBC highlighted
Gold Fields strong cross-sector and
industry collaboration, as well as our
outreach to vulnerable and most-
at-risk populations.
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3 UNAIDS, 'Report on the Global AIDS
Epidemic 2010', www.unaids.org
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Malaria
In Ghana, we have a comprehensive
malaria strategy based on
education, prevention, prophylaxis
and treatment. Specific workplace
actions carried out in 2011 include:
(cid:2)(cid:3) Indoor residential spraying
(cid:2)(cid:3) Provision of anti-malarial drugs
(cid:2)(cid:3) Monitoring, measurement
and evaluation of
affected individuals
In addition, we carried out a
number of community actions,
including education and training
around malaria-prevention for local
community members, as well as the
distribution of insecticide-treated
nets in partnership with the Ministry
of Health. In 2011, we had 215
workplace malaria cases at our
Ghana operations.
5.2.3 Supporting
employee wellbeing
Gold Fields provides a range of
healthcare services to employees.
In South Africa, for example, this
includes access to two hospitals, as
well as primary healthcare clinics
and emergency medical services
provided by the mines.
Beyond this, our holistic approach
to employee care means we also
address employees’ broader
social, psychological and emotional
wellbeing. If left unaddressed,
these can have a significant impact
on motivation and productivity and
can also contribute to health and
safety incidents.
Case study
Gold Fields Ghana wins 2011
Global Business Coalition
Health Award
Find out more online
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
140
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Although this holistic approach to
wellness was pioneered in South
Africa, it is being rolled out to our
other regions, having been adapted
to suit local circumstances.
In Australia, we have established
the Raise the Bar employee health
and wellbeing programme at St
Ives. This includes the carrying out
of ‘Live Well Health Assessments’
by external experts. Results from
these assessments are used to
help deliver tailored programmes
to improve employee wellbeing –
including education and awareness
raising around diet, exercise, health
risks and other related issues.
In Ghana, our Wellness Programme
covers the physical, emotional,
financial, spiritual, occupational and
social wellbeing of both employees
and contractors. A total of 80% of
our employees have undergone
Health Risk Assessments under the
programme. The results of these
are helping us address issues
such as high blood pressure, high
cholesterol and other lifestyle-
related issues.
As a result, our holistic 24 Hours in
the Life of a Gold Fields Employee
programme aims to ensure
our employees:
(cid:2)(cid:3) Work safely and effectively
(cid:2)(cid:3) Are well housed
(cid:2)(cid:3) Enjoy a healthy lifestyle, including
decent nutrition and sleep
(cid:2)(cid:3) Have access to recreational
activities, including sport
(cid:2)(cid:3) Receive market-related
compensation and are subject
to appropriate incentives and
bonus schemes
These efforts are closely integrated
with our other healthcare initiatives,
including our comprehensive Health
Risk Assessments (p140).
In 2011, we opened a second High
Performance Centre (HPC) at KDC
to help rehabilitate employees with
lifestyle diseases, occupational
injuries, occupational health risks and
other issues that affect wellbeing and
productivity. During the course of
the year, a total of 9,345 employees
attended the HPCs (2010: 3,409).
This is as a result of our efforts
to achieve preventative ‘mass-
coverage’, instead of using the HPCs
to retrospectively address a minority
of serious injuries or diseases.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Accommodation
Quality of accommodation is a key
determinant of employee wellbeing.
In addition, it has traditionally
been a contentious issue in South
Africa, due to the mining industry’s
traditional reliance on migrant
workers housed in high-density
accommodation (also called
hostels). Our housing programme
comprises two key elements –
an upgrade of hostels and the
construction of houses. We have
committed R586 million (US$81
million) to upgrading these hostels
between 2010 and 2014 – with R350
million (US$48 million) of this spent
by the end of 2011.
The upgrading of our on-site
hostels, in which 44% of our
South African workers live, forms
part of our Social and Labour Plan
commitments, while the Mining
Charter requires the sector to
achieve one occupant per room by
2014. We are making good progress
in this respect, and achieved an
occupancy rate of around 1.45 per
room during 2011.
In addition, we also constructed
100 new family homes at KDC and
South Deep – on top of 400 already
constructed over the last two years.
By the end of 2012, we plan to have
completed a total of 957 of these
new homes. The cost of our multi-
year housing programme is R200
million (US$28 million).
A total of 14,000 of our employees
in South Africa who do not
live in high-density or family
accommodation receive a living out
allowance of R1,520 (US$211) a
month. Many employees who take
up the living out allowance choose
to live in informal settlements.
We do not encourage these informal
settlements, but to the extent that
they appear inevitable, we try and
mitigate their negative impacts by
helping improve living conditions
there. This includes, for example, the
provision of basic utilities.
141
Securing our future responsibly
5.3 Building
!(cid:5)(cid:20)(cid:5)(cid:16)(cid:18)(cid:18)’(cid:8)(cid:30)(cid:7)(cid:15)(cid:7)(cid:14)(cid:17)(cid:3)(cid:16)(cid:18)(cid:8)
community relations
The operational continuity of our
mines, as well as our ability to
successfully establish new
operations, relies on a strong social
licence to operate from our local
communities – and, by extension,
our host governments. This makes it
essential that we deliver clear, long-
term social and economic benefits
to those amongst whom we work. In
essence, this is about establishing
and maintaining relationships
based on ongoing, shared interests.
5.3.1 Engaging local
stakeholders
Constructive and transparent
engagement with local stakeholders
is a critical prerequisite for a strong
social licence to operate. Because
of this, we place particular focus
on establishing and maintaining
constructive, consultative and
cooperative stakeholder relations.
This includes regular and formalised
engagement with the following
groups to address relevant and
material stakeholder issues:
(cid:2)(cid:3) Central and local government
(cid:2)(cid:3) Traditional community leaders
(cid:2)(cid:3) Informal community groups
This includes informing stakeholders
about the relevant characteristics of
each project (such as likely impacts
and mitigation measures), as well as
addressing issues of concern raised
by such stakeholders. In 2011, this
process – and other project-based
stakeholder engagement – was
employed with respect to:
(cid:2)(cid:3) NGOs
(cid:2)(cid:3) Organised labour
(cid:2)(cid:3) Local businesses
Engagement is guided by relevant
legislation, our Communities and
Indigenous People Policy, our
Social and Labour Plans in South
Africa, as well as the internationally-
recognised AA 1000 Stakeholder
Engagement Standard.
In addition to these established
community engagement processes,
we conduct public engagement
as part of all Environmental
Impact Assessments (EIAs)
across the Group.
(cid:2)(cid:3) Our Far Southeast project in
the Philippines, with particular
focus on obtaining the Free
Prior and Informed Consent
(FPIC) from the local indigenous
community for our exploration
activities – as required by local
legislation (p107)
(cid:2)(cid:3) The ongoing development of an
EIA for our Chucapaca project
in Peru, as well as an innovative,
collective land acquisition
programme (p114)
Figure 5.10: Examples of local stakeholder engagement
Region
Australasia
South Africa
Details
We engage local indigenous groups at both mines under the Native Title Act 1993 on issues including
native title, land access and the protection of cultural heritage sites (p148-149).
We are subject to a range of statutory Social and Labour Plan (SLP) requirements, which govern the
majority of our formal interactions with local communities. The Local Economic Development element
of these plans addresses issues ranging from local infrastructure to enterprise development.
In addition, we participate in regular engagement relating to local water issues in the West Wits
area – through, for example, the Far West Rand Dolomitic Water Association and the Mining Interest
Group (p64).
South America
Cerro Corona has a formal community engagement framework that uses pre-established schedules
to address community priorities such as community development (p145) and water quality (p66).
The mine also participates in the “Mesa de Dialogo y Concertacion de Hualgayoc”, a community
forum focused on regional development projects. The Mesa is led by the Mayor of Hualgayoc and
includes NGOs and public officials.
Joint water monitoring with local communities also plays an important role in generating trust around
this sensitive issue.
West Africa
Both mines have well-established engagement frameworks based on:
(cid:2) Broad-based Mine Consultative Committees
(cid:2) Formalised, regular engagement with local chiefs
(cid:2) Regular Community Committee meetings
(cid:2) Direct Community Forums
(cid:2) Continuous informal engagement, including an ‘open-door’ policy with respect to local community
members wishing to raise concerns
Regular areas of discussion include land compensation (p149, online), local employment (p146),
local infrastructure (p145) and illegal mining (p149-153). At Tarkwa, we also carry out regular joint
water testing with community representatives.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
142
Securing our future responsibly
5.3.2 Promoting Socio-
Economic Development
It is in our clear business interest to
promote local development in our
operating environments. Our most
important means of doing so is
through our substantial contribution
to public revenues and the payment
of salaries in our countries of
operation (Figure 5.12). In reality,
such revenues do not necessarily
directly benefit our local communities
– or contribute to our social licence
to operate at a local level. As a
result, we also run substantial
Socio-Economic Development (SED)
programmes to ensure we deliver
tangible and lasting benefits to the
specific communities amongst whom
we work.
In 2011, we spent a total of US$54
million on SED projects. This
amounts to 5% of post-tax profit
– compared to the international
benchmark of 1%. Spending alone is
not a measure of success, however.
Because of this, we place particular
focus on project impact to ensure we
maximise community benefits.
Figure 5.11: Group SED spending by type
Enterprise development
Infrastructure development
Education
Training
Conservation and the environment
Arts and culture
Health
Sport
Charitable giving and gifts-in-kind
SLP - Local Economic Development (South Africa only)
Total
Value (US$)
671,741
10,200,463
1,132,043
35,442,703
871,829
199,910
489,772
397,457
934,914
3,306,662
53,647,492
Figure 5.12: SED plus development-related economic contributions by type
(US$ million)
Salaries
Payments to governments
Socio-economic development (SED) spend
Total
2011
2010
2009
2008
1,101
1,027
478
54
312
67
784
249
11
1,633
1,406
1,044
708
159
14
881
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
143
Securing our future responsibly
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Figure 5.13: Group SED spend by region
6.1%
7.1%
0.7%
Australasia
South Africa
South America
West Africa
86.0%
Australasia
Examples include:
The strength of the Australian socio-
economic context – as well as the
remote nature of our operations –
means that our SED programmes are
of a more ‘philanthropic’ nature than
elsewhere. In 2011, we spent a total
of A$0.4 million (US$0.4 million) on
SED projects via the Gold Fields
Australia Foundation.
(cid:2)(cid:3) Sponsorship of eight indigenous
students at the University of
Western Australia
(cid:2)(cid:3) Sponsorship of students from
the Kambaldi Western District
High School to attend an
employment exposition in Perth
How is SED
(cid:19)(cid:13)(cid:7)(cid:15)(cid:31)(cid:3)(cid:15)(cid:4)(cid:8)(cid:31)(cid:7)(cid:14)(cid:8)(cid:15)(cid:7)(cid:31)(cid:140)
SED is defined as spend
relating to projects that are:
(cid:2)(cid:3) Influential in benefiting
employees and contractors
beyond the core business
(cid:2)(cid:3) Influential in uplifting the
communities and societies
in our host countries
(cid:2)(cid:3) Guided by a strong
development approach
(cid:2)(cid:3) Linked to infrastructure
investment that benefits
communities during
operation and
closure phases
Case study
Living Gold rose project:
Learning from past challenges
Find out more online
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
144
Securing our future responsibly
At our Far Southeast project in
the Philippines, we have an
extensive SED programme in place
to support its smooth advancement
towards a development decision
and beyond.
Early SED investment of this nature
helps strengthen community support
at a critical and sensitive time, whilst
also establishing a positive reputation
amongst communities we may be
working amongst for many years.
South Africa
Our SED programmes in South
Africa are primarily implemented
through the statutory Social and
Labour Plan (SLP) framework.
Under this framework, we implement
Local Economic Development (LED)
initiatives at each of our mines in
South Africa – and in our major
labour sending areas.
Each LED programme is
aligned with local municipalities’
integrated development plans – and
is directly informed by relevant and
material issues identified during
community engagement. During
2011, we spent a total of R18 million
(US$2.5 million) on LED projects.
Notable near-mine LED projects
supported by Gold Fields include,
amongst others:
(cid:2)(cid:3) KDC: The provision of R7 million
(US$970,000) to help finance
the construction of the Simunye
Clinic, in a partnership with the
Westonaria municipality and the
Gauteng Department of Health
and Social Development
(cid:2)(cid:3) Beatrix: Construction of 14
classrooms, ablution facilities
and a media centre at
Reseamohetse Public School
at a cost of R4.4 million
(US$610,000). The school was
handed over to the Free State
Department of Education in
April 2011
In addition to these projects, we have
targeted LED programmes to assist
workers who are exiting Gold Fields.
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This includes, for example, the
Paragon ‘Stitchwise’ initiative, which
employs injured ex-employees in
the production of safety apparel.
Furthermore, exiting employees are
offered portable skills training (p128),
as well as Adult Basic Education
and Training (p130), to help them
establish alternative livelihoods.
What is a Social and Labour
Plan (SLP)?
South Africa’s Mineral
and Petroleum Resources
Development Act 2002
requires mines to submit an
SLP before they are granted
mining rights. Each SLP, which
is agreed with the Department
of Mineral Resources, commits
companies to spending a
defined budget on Local
Economic Development or
Skills Development initiatives.
SLPs are intended to:
(cid:2)(cid:3) Promote employment and
socio-economic welfare
(cid:2)(cid:3) Assist in the transformation
of the mining industry
(cid:2)(cid:3) Contribute to development
of their areas of operation
– as well as in their labour-
sending areas
These programmes, which are
coordinated via TEBA Development,
include:
(cid:2)(cid:3) Our R2 million (US$277,000)
agricultural programmes (one
in Eastern Cape and one in
Kwa-Zulu Natal) which provide
agricultural support, strengthen
access to markets, help build
local capacity and improve
household nutrition. The
programmes have around
1,800 beneficiaries – including
45 medically-discharged ex-
Gold Fields employees
(cid:2)(cid:3) Our R3 million (US$416,000)
livestock programmes (two in
Eastern Cape and one in Kwa-
Zulu Natal), which provide access
to animal husbandry services
and products, promotes good
practices and increase individual
earnings. The programmes have
around 8,000 beneficiaries
In addition, we are exploring the
potential benefits of addressing
development in the labour-sending
areas on a collaborative basis.
In 2011, for example, a memorandum
of understanding was signed
between Letsema Circle, Gold Fields
and AngloGold Ashanti to develop a
collaborative concept for enterprise
development in the Eastern Cape
labour-sending area. This will be
further examined during 2012.
SLP spending in
labour-sending areas
The above efforts are supported
by our LED programmes in our
labour-sending areas, on which
we spent R6 million (US$831,000)
in 2011. This includes the provinces
of Eastern Cape and KwaZulu-Natal,
which are home to approximately
32% of our workforce in South Africa.
Case study
Developing a sustainable
economic model for the
Eastern Cape
Find out more online
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Non-SLP spending
Our broader SED spending (i.e.
beyond SLP spending) is substantial
– amounting to a total of R315
million (US$43.6 million) in 2011.
This includes projects that benefit
employees, their family members
and local communities.
Ongoing examples that continued in
2011 include:
(cid:2)(cid:3) Our five-year, R786 million
(US$109 million) housing and
hostel upgrade programme,
of which R476 million (US$ 66
million) has been spent up until
December 2011
(cid:2)(cid:3) Training in South Africa through
the Gold Fields Business and
Leadership Academy, on-mine
training and bursaries
(cid:2)(cid:3) A three-year, R26 million (US$3.6
million) sponsorship programme
of the University of the
Witwatersrand and the University
of Johannesburg
(cid:2)(cid:3) Continued financial support
for South East Education
Trust projects
www.teba.co.za
www.wits.ac.za
www.uj.ac.za
South America
SED programmes play a
particularly important role in Peru
due to considerable political
interest in the socio-economic and
environmental costs and benefits
of mining. Our Cerro Corona
mine sits in an area characterised
by challenging socio-economic
conditions. Furthermore, its remote
and mountainous location means
local communities are particularly
reliant upon us for development and
basic infrastructure.
In 2011, we spent a total of US$3.8
million on SED projects at Cerro
Corona as part of an ‘integrated’
development approach based on
the long-term enhancement of local
communities’ economic, social and
environmental capital.
Examples of some of the key
projects implemented in
2011 include:
(cid:2)(cid:3) Milk Production Chain
Programme: This ‘asset-based’
project focuses on improving
pasture, increasing the cattle
population, improving genetics
and strengthening milk
production. As a result of the
programme, community members
have purchased 600 cows and
bulls, artificial insemination has
produced 350 calves and milk
production has risen from 6 to 9
liters per cow per day
(cid:2)(cid:3) Education programmes: These
include general investment in
school infrastructure, capacity
building for teachers, as well as
the provision of school transport
and teaching supplies. In 2011,
we built on progress already
achieved in this respect, by
focusing on high-quality teaching
of mathematics and literacy
(cid:2)(cid:3) Reforestation: Our local
reforestation programme
helps address a range of
environmental concerns, but
also provides sustainable
wood-fuel, edible fungi and
feed-stock for paper production.
The programme has benefited
around 400 families and has
increased forestation by ten-fold
We also implement extensive SED
programmes at our Chucapaca
project in Peru under formal, five-year
agreements with the Corire, Santiago
de Oyo Oyo and Chucapaca
communities. We are placing
particular focus on ensuring our SED
projects – and engagement activities
– help address activism within the
Oyo Oyo community (p113-114).
Case study
Cerro Corona: Promoting
‘holistic’ local development
Find out more online
145
Securing our future responsibly
West Africa
The relatively weak socio-economic
status of our operating environment
in Ghana means we are in a
position to make a significant and
lasting impact on the lives of local
communities. In 2011, we spent
a total of US$3.3 million on SED
projects at Damang and Tarkwa.
These are funded through the
Gold Fields Ghana Foundation,
to which we contribute US$1 per
ounce of gold produced in
Ghana – as well as 0.5% of our
pre-tax profits.
This spending was directed
at projects focused on health,
water and sanitation, education
and agriculture. The remainder
was spent on assorted projects,
including road rehabilitation, local
apprenticeships, support for local
sports and infrastructure support.
Examples of key projects
implemented in 2011 include:
(cid:2)(cid:3) Funding of the Small Town
Water Supply (STWS)
programme, focused on the
construction of deep boreholes
and overhead tanks in local
communities. In 2011, we
completed six STWS projects in
the communities of New Atuabo,
Samahu, Brahabobom, Abekoase
and Huniso
(cid:2)(cid:3) A wide-reaching community
education programme, including
the provision of 32 new, four-year
community scholarships and 110
new bursaries for communities
near Tarkwa, as well as a further
80 bursaries and scholarships for
communities near Damang. We
are also continuing our support of
the Nana Amoakwa model school,
which is based in Damang
(cid:2)(cid:3) Extensive agricultural
programmes, including support
for the cultivation of local oil
palm, cassava, vegetables
and livestock amongst local
farmers. During 2011, a total of
708 people benefited from the
programmes, which are partly
carried out in collaboration
with the Ministry of Food
and Agriculture
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
146
Securing our future responsibly
5.3.3 Local employment
and capacity building
Our local communities in Ghana,
Peru and South Africa have
one key challenge in common:
Unemployment. As a result, we
place strong emphasis on the
employment of local people – where
it is operationally and commercially
viable. Unfortunately, local labour
pools are not always able to offer
the specialised skills necessary
for the effective operation of our
increasingly sophisticated mines.
Because of this, we enhance the
local skills pool through mining-
related education and training –
both for the benefit of participants,
as well as Gold Fields itself.
This is still unlikely to fully satisfy local
demand for employment, however.
In light of this, we also carry out
a range of activities to promote
alternative income generating
opportunities through our SED
initiatives, as well as preferential
procurement (p146-148).
Local employment
The employment and development
of local people strengthens our
own skills pipeline by ensuring we
have ready access to necessary
skills and competencies. This is
an increasingly important issue
in a context of intense global
competition for experienced
mining specialists – which makes
the employment of expatriate
employees increasingly expensive.
Furthermore, it underpins our
own commitment to ensuring our
workforce reflects the demographics
of the societies in which we operate.
In Australia, we are running a small
pilot programme at St Ives for the
targeted recruitment of indigenous
people. The experience of some
of our peers has demonstrated the
importance of careful preparation
of candidates for entry into the
workplace, as well as the cultural
sensitisation of our existing
employees. If successful, we hope
to roll out this programme on a
larger scale.
In Ghana, both mines run a
formalised programme for local
recruitment. Under the programme,
all new vacancies are checked
against a skills and qualifications
database of local people. Viable
candidates are then interviewed on
a fair and transparent basis by the
mine’s Employment Committee, which
is chaired by a local chief nominated
by his peers. In addition, the mine
runs a programme to fill unskilled
positions from local communities.
In 2011, 199 local people were
employed in this way. All of our
contractors in Ghana are required to
source unskilled labour through our
Community Affairs department.
In Peru, our Cerro Corona mine
employs – directly and through
contractors – 529 people from
neighbouring communities (or
31% of the mine’s workforce). This
compares to an original commitment
to employ 150 people from local
communities. It is estimated that
approximately 20% of the local
economically active population
are either mine employees or
contractors. Many local people
have been deliberately trained
to fill skilled roles. As of August
2011, Cerro Corona had 65 plant
operators, all of them from local
communities, whilst 80% of those
working in the processing plant
were local.
Local capacity building
Local capacity building is essential
for the promotion of broader socio-
economic development – and to
improve our ability to employ local
people in the future.
In Ghana, we sponsor local people
through the Tarkwa Technical
Institute to work as engineers
and geologists. In 2011, 23 local
people completed this process.
In late 2011, this programme
was supplemented by our
new Community Learning and
Development Framework, which
saw 10 community members
become qualified in the operation
of dump trucks – and a further eight
sponsored to undergo training in
welding, auto-mechanics, dress-
making and other skills.
At Tarkwa, we also provide
US$1,000 individual bursaries to 60
of our employees' children to help
them pursue training and education
that will benefit our operations.
In Peru, our Cerro Corona mine
carries out in-house operator and
electromechanical training for 60
local community members each
year. This not only helps fulfil our
own needs, but helps participants
gain employment in the growing
Peruvian mining sector.
In South Africa, we provide 96
bursaries to universities and
technical colleges (2010: 106), 605
technical learnerships (2010: 456)
and 76 (2010: 74) postgraduate
sponsorships. This is helping to
establish a solid pipeline of highly
qualified HDSAs who will help drive
transformation both at Gold Fields
– and in the South African mining
industry more broadly. We are also
sponsoring the mining faculties of
the University of the Witwatersrand
and the University of Johannesburg
under a three-year, R26 million
(US$4 million) agreement.
www.wits.ac.za
www.uj.ac.za
5.3.4 Local procurement
Where possible, it is our policy to
use local suppliers. In part, this is to
strengthen our own supply chains in
often remote locations that otherwise
rely on lengthy and expensive
logistical routes. It also helps us
integrate into the local economy
and enhances our social licence to
operate. As with local employment,
local supply pools are not always of
sufficient depth or breadth to support
our operations. Because of this, we
actively assist current and potential
suppliers to improve their business
and management processes.
In Ghana, we play a leading role
in the Chamber of Mines (and
in partnership with the Mineral
Commission of Ghana) to drive
import substitution and promotion
of local value-adding activities.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
147
Securing our future responsibly
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
148
Securing our future responsibly
We also work closely with
government as they develop their
own local procurement policies.
In 2011, a total of 47.2% of our
procurement budget was spent
with Ghanaian suppliers. Examples
of notable local procurement
relationships in Ghana include:
(cid:2)(cid:3) Completion of the US$28 million
TSF3 tailings dam at Tarkwa by
Ghanaian company Engineers &
Planners (p66)
(cid:2)(cid:3) Our sourcing of steel milling
balls from Ghanaian company
Tema Steel, which we have
actively helped in their efforts
to meet international mining
sector standards
In Peru, companies are legally
required to prioritise local suppliers
– if they meet relevant standards.
We currently spend 15% of our
regional procurement budget on
suppliers in the vicinity of Cerro
Corona. Contracts cover, for
example, heavy equipment, light
transport and general services –
from companies we have actively
supported (for example through
coaching, training and supervision)
since the construction phase of
the mine.
We continue to meet with local
suppliers every two months and
offer ongoing training to help them
attain our stringent procurement
standards – including compliance
with ISO 14001- and OHSAS
18001-equivalent standards. Such
efforts have helped establish a
commercially sustainable supply
pool in the region, which services
the mining sector beyond our own
operations. This includes around 65
of the original companies that we
commercially supported during the
construction phase (or 60% or the
original local company pool).
In South Africa, we are committed
to sourcing from Broad Based Black
Economic Empowerment (BBBEE)
companies, where possible – both
as part of our SLPs and our own
commitment to transformation.
In 2011, we spent R3.5 billion
(US$479 million) with such
suppliers – or 46% of our regional
procurement budget.
5.3.5 Respecting the rights
of local and indigenous people
Where relevant, we engage with
local people through traditional
decision-making structures and
processes. We do so at the earliest
stages of our activities and ensure
that we provide accessible and
accurate information to inform
these discussions.
This is a particularly important issue
in Australia, which has extensive
legislation in place governing
cultural heritage, native title and
other relevant issues. This includes,
for example, the Commonwealth
Native Title Act and the Aboriginal
Heritage Act 1972.
During 2011, both of our mines
engaged indigenous groups when
carrying out near-mine exploration
drilling or establishing new
infrastructure. Our engagement is
based on an innovative risk-based
ethnographical and archaeological
programme to identify relevant
heritage sites. Any culturally
sensitive sites need to be registered
with the Department of Indigenous
Affairs and cannot be drilled without
ministerial permission.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Securing our future responsibly
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At Agnew, we implemented a best-
practice stakeholder engagement
structure focused on Native Title to
address environmental, heritage
and cultural issues in the area. The
system is based on the AA 1000
stakeholder engagement system.
At St Ives, we instituted a formal, best
practice framework for the monitoring
of our ground clearance activities
by paid observers from relevant
indigenous groups. No additional
heritage sites were identified at St
Ives during 2011. Our St Ives mine
also re-engaged with the Kalamaia-
Kapu(d)n group. Whilst the Kalamaia-
Kapu(d)n have not registered a
Native Title Claim, St Ives engages
with the group in recognition of their
historical links to the area.
In Canada, our exploration team
works closely with relevant First
Nation communities when operating
in their traditional territories. We
also conduct archaeological
surveys before disturbing the land
to make sure we respect sites of
cultural significance.
Furthermore, we often employ First
Nation members as environmental
monitors – to provide assurance with
respect to our exploration impacts.
In the Philippines, we are directly
engaging local Mankayan indigenous
communities to secure their Free
Prior and Informed Consent (FPIC)
for our exploration activities around
our Far Southeast project (p106-107).
Under the local legal framework,
the granting of FPIC is vital for the
project to proceed.
Additional content online
Respecting the rights of
local and indigenous people,
resettlement and land impacts
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We remain committed to playing a
constructive role in improving the
working conditions, environmental
performance and socio-economic
conditions of those engaged in
artisanal gold mining. We are in the
process of investigating how we can
work in partnership with relevant
industry groups and NGOs to
leverage our expertise, assets and
influence to assist in this process.
5.3.6 Addressing
artisanal mining
We differentiate between three types
of artisanal gold mining:
(cid:2)(cid:3) Responsible and legal
artisanal mining
(cid:2)(cid:3) Irresponsible, yet legal
artisanal mining
5.3.7 Addressing illegal mining
A significant amount of irresponsible
and illegal artisanal mining takes
place in a way that has the potential
to negatively impact on local
environments and communities – as
well as on our operations and the
broader reputation of the industry.
These include, for example:
(cid:2)(cid:3) Illegal artisanal mining
(cid:2)(cid:3) Poor health and safety standards
Responsible and legal artisanal
mining has the potential to create
sustainable and broad-based
wealth – and to generate worthwhile
employment opportunities.
(cid:2)(cid:3) Inadequate and exploitative
working conditions
(cid:2)(cid:3) Pollution as a result of the
improper use of mercury
and cyanide
(cid:2)(cid:3) Land degradation as a result of
poor operational management
(cid:2)(cid:3) Incidents of child labour
Illegal mining is an ongoing
challenge for our operations in
Ghana and South Africa – partly
Additional content online
For a related article from
the Alliance for Responsible
Mining (ARM) on ASM and
large-scale mining see:
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www.communitymining.org
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
150
Securing our future responsibly
driven by high gold prices. Although
our targeted SED and community
engagement programmes help
mitigate some of the conditions
that lead to illegal mining, we also
implement a range of security
programmes. These are based on a
‘firm but fair’, non-antagonistic and
prosecution-based approach.
Ghana
In Ghana, illegal mining is
characterised by the encroachment
of artisanal miners onto our licence
areas. Damang is at particular risk
of such activity due to its ‘open’
geographical location and the
relatively high grade of certain
ore deposits.
In June 2011, we had around 50
illegal miners working our historical
underground Aboso shafts, which
are otherwise disused. We secured
their effective removal by arranging
for all utilities to be cut-off, making it
impossible for them to continue
to mine.
In July 2011, a significant group
of illegal miners occupied the
old Tomento, Amoanda and Lima
South pits. The number increased
over time, with numbers fluctuating
between 200 and 2,500. Our
security personnel have adopted a
non-aggressive stance as we work
to find a constructive and lasting
solution. After a contingent of illegal
miners invaded the processing plant
at the mine in December 2011, all
illegal miners were removed from the
Damang lease areas by the public
authorities without incident (p153).
Where we wish to remove illegal
miners, we take careful measures
to avoid conflict and to give time
for people to make alternative
arrangements. Enforced removal
is only ever used as a last resort.
District assembly representatives
are invited to observe such
removals, which are coordinated
with the public security services.
As with other forms of
irresponsible artisanal mining,
these encroachments can have
significant environmental impacts
(including land degradation and
the misuse of cyanide) and safety
impacts (including risks posed to
both the illegal artisanal miners and
to our own employees by ground
instability). In addition, they are
believed to be backed by organised
foreign syndicates who provide
financing and illicit marketing routes.
This has implications in terms of
potential for broader criminality, as
well as the exploitation of the illegal
miners themselves.
South Africa
In South Africa, illegal miners tend
to work in disused, unworked shafts
to exploit remaining deposits –
sometimes spending extended
periods underground.
In 2011, indications suggested a
reduction in underground illegal
mining. This appears to be linked
to an increase in ‘sightings’ by
employees – linked to our extensive
awareness-raising activities and
the offer of rewards – as well as
enhanced entry and exit controls
and active underground patrols.
Once apprehended, illegal
miners are removed from our
operation in a non-confrontational
way and transferred to local police
officers, after their details have
been recorded.
Although most of these illegal
miners have previous mining
experience, the conditions in
which they work – as well as a
lack of proper equipment – makes
their work not only illegal, but
highly dangerous. It is suspected
that illegal diggers are backed
by organised syndicates under
exploitative conditions.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Gold Fields approach
to artisanal and
small-scale mining
High gold prices – as well as poverty, food insecurity and
unemployment – have contributed to an increase in artisanal and
small-scale mining (ASM) in developing countries. According to
the World Gold Council, although ASM accounts for only around
10% of global gold production – it accounts for around 90% of
the gold-sector’s workforce.
What are the risks and opportunities
around ASM?
Common issues associated with irresponsible ASM – much of which is
carried out without relevant mining licences – include:
(cid:2)(cid:3) Low pay and exploitative conditions
(cid:2)(cid:3) The presence of children on digging sites
(cid:2)(cid:3) Poor health and safety standards
(cid:2)(cid:3) Pollution as a result of the poorly-regulated use of cyanide and mercury
(cid:2)(cid:3) Land damage and instability as a result of unplanned digging
In many cases, irresponsible ASM activity takes place on existing licence
areas. This can pose risks to the legitimate licence-holder, including:
(cid:2)(cid:3) The loss of easy-to-reach gold deposits
(cid:2)(cid:3) Health and safety risks (e.g. from un-rehabilitated diggings)
(cid:2)(cid:3) Increased environmental liabilities as a result of pollution and
land damage
(cid:2)(cid:3) Low-level insecurity linked to militancy and associated criminality
Nonetheless, if carried out responsibly, with proper permitting and without
compromising the rights of others, ASM can:
(cid:2)(cid:3) Provide worthwhile and sustainable employment
(cid:2)(cid:3) Drive development by contributing to public revenues
(cid:2)(cid:3) Promote fair, broad-based economic growth
(cid:2)(cid:3) Safeguard the local environment
This is why Gold Fields supports responsible ASM. During 2012, we plan to
finalise our formal, strategic approach in this respect.
Why is ASM an issue for Gold Fields?
ASM activity takes place in the vicinity of our exploration and/or operations
in Ghana, Kyrgyzstan, Mali, Peru, the Philippines and South Africa. This can
result in negative impacts (including water pollution in particular) that are
sometimes blamed on Gold Fields, undermining our social licence to operate.
In Ghana, irresponsible ASM activity takes place on our Damang licence
area without our permission. The area is intersected by public roads,
whilst several communities live on the licence area – making physical
exclusion difficult.
At our Yanfolila exploration project in Mali, we permit local ASM miners
(‘orpailleurs’) to continue their traditional work on pre-established sites, as
long as it is carried out in a responsible way.
25m-35m
People estimated to be engaged in ASM gold
activity worldwide
650%
Rise in gold price between Feb. 2001 and
Sept. 2011 (a key driver behind the global
rise in ASM activity)
Illegal occupation and eviction
at Damang
Addressing the risk of future illegal
occupations at Damang
In July 2011, a significant number of illegal ASM miners
(‘galamsey’) occupied our old Tomento, Amoanda and Lima
South pits. At points, there were as many as 2,500 ASM
miners trespassing on our licence area and working the
land. Despite weeks of negotiations by Gold Fields, with
the assistance of traditional and formal political leaders, the
galamsey refused to leave the mining licence area voluntarily.
In December 2011, a group of the galamsey invaded
Damang’s processing plant, directly threatening Damang’s
ability to continue operating – as well as the safety of our
employees. This prompted the public authorities to carry out
an involuntary eviction – in line with Ghanaian law.
This was carried out by a unit of the Ghanaian Defence Force
– in light of concerns over the potential for violent action by
elements amongst the galamsey. Before the exercise, we
briefed the responsible army unit as to our human rights
obligations. We also provided extensive warning of the
eviction through radio broadcasts, face-to-face engagement
(again with the assistance of traditional leaders and local
political representatives) and the identification of a firm
eviction date.
On the day of eviction, the army spent several hours in
negotiation with the galamsey. The eviction only proceeded
when the galamsey withdrew from negotiations and resumed
mining. The galamsey dispersed as soon as the army
advanced and no-one was hurt in the process.
Whilst the December 2011 eviction dealt with the immediate
occupation, we are still working to find a constructive and
lasting solution to the threat of illegal occupation.
This includes the implementation of a comprehensive
baseline social study to establish relevant players,
drivers and dynamics amongst local galamsey and
local communities.
Once completed, the baseline social study will be used
to develop a medium- and long-term strategy to help
address both the ‘push’ and ‘pull’ factors that result in illegal
occupations of this nature.
Areas of illegal
ASM activity
during 2011
Pits
Roads
Damang Cutback
Processing plant
Tomento North
Tomento East
Tomento West
Amoanda
Chida
Chida South
Abosso
Hohokoa
Rex mani
Rex South
Juno
Kwesi
Lima
Bohsa North
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Securing our future responsibly
5.4 Forging strong relations
through business ethics
Our Values commit us to act with
fairness, integrity, honesty and
transparency – both in our own
actions and in our promotion of
ethical practice in our external
environment. We aim to maintain
the complete confidence of our
stakeholders – including our
shareholders, business partners
and host governments – by
adopting an approach that goes
beyond legal compliance.
5.4.1 Complying with the law
We will not engage in any activities,
including bribery and corruption,
that undermine the legitimate
business environment in any form.
All of our directors and employees
are bound to uphold the company’s
core values of honesty, transparency
and integrity, which underpin our
Code of Ethics (p25).
The Code was updated in 2011
in line with relevant domestic and
international legal requirements
with assistance from third-party
legal experts. It is binding on every
employee, officer and director of
any entity that is owned or controlled
by Gold Fields. The updated Code
articulates Gold Fields policy
with respect to an array of issues
ranging from facilitation payments
through to political contributions.
The Code of Ethics is supported
by an implementation framework,
with defined responsibilities and
reporting processes. Any breach
of the new Code will result in
disciplinary action, which may lead
to dismissal. Should the breach be
criminal, we will pursue prosecution
of the employee concerned.
5.4.2 Maintaining strong
government relations
Gold Fields relations with its host
governments are amongst its most
important. In most cases, we engage
host governments through the
national Chambers of Mines, due
to the efficiencies and legitimate
influence offered by collective
sectoral action. Where necessary
and appropriate, we also engage
governments on a bilateral basis.
As a general rule, Gold Fields does
not make financial contributions to
any political parties. In 2011, no
such contributions were made.
Gold Fields does not receive
financial assistance from any of its
host governments.
www.goldfields.co.za
Black Economic Empowerment
Engagement with government is
particularly important in South Africa
due to the ongoing Black Economic
Empowerment (BEE) agenda.
This is implemented through the
Mineral and Petroleum Resources
Development Act of 2002, as well
as the associated 2010 revised
Mining Charter.
During 2011, we carried out a full
gap analysis of our performance
against the amended Mining
Charter. This found that we were
largely compliant with the first year
requirements of the amended
Charter. We are placing particular
emphasis on meeting all outstanding
targets during the next two years.
Gold Fields is an active participant
– through the South African
Chamber of Mines – in the Mining
Industry Growth, Development and
Employment Task Team (MIGDETT).
The MIGDETT is a vehicle used
by the Department of Mineral
Resources (DMR), companies
and the trade unions to promote
sustainable growth and meaningful
transformation of the mining sector.
Additional content online
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Case study
Gold Fields makes good progress against
new Mining Charter targets in South Africa
During 2010, the South African Department of Mineral Resources
(DMR) unveiled the revised Mining Charter 2010. The revised Mining
Charter updates and expands upon a set of empowerment targets
(originally set in the Mining Charter 2002), that mining companies in
South Africa are required to comply with by March 2015. Details of
Gold Fields progress against key targets are set out below:
(cid:2)(cid:3) Minimum 26% HDSA ownership by 2014: In 2009, Mvelaphanda
Gold (MvelaGold) subscribed for 15% of Gold Fields South African
assets (GFIMSA) representing an effective 15% HDSA ownership
interest. During 2010, Gold Fields implemented three further Black
Economic Empowerment (BEE) transactions. Taken together, these
transactions enabled Gold Fields to achieve its 2014 Mining Charter
HDSA ownership target
(cid:2)(cid:3) Procurement of a minimum 40% of capital goods, 50% of
consumer goods and 70% of services from BEE entities by 2014:
By 2011, Gold Fields had achieved an overall HDSA procurement
rate of 46% across all categories. HDSA procurement is broken
down as follows: 47% of capital goods; 46% of consumer goods;
and 46% of services
(cid:2)(cid:3) Minimum 40% HDSA representation amongst management and
technical skills: In 2011, Gold Fields had achieved 43% HDSA
representation amongst junior management, 41% amongst middle
management and 30% amongst senior management at its South
African operations. At Group Board level the representation is 36%
(cid:2)(cid:3) Invest 3% of annual payroll in skills training: Apart from the South
Deep mine, which is still undergoing construction and development,
all operations are on-track to achieve this target
(cid:2)(cid:3) Investment in community development: As part of their Social and
Labour Plans, Gold Fields operations are involved in a number
of community development projects focused on infrastructure
development, job creation and poverty alleviation – with particular
support for enterprise development (p144). The projects that qualify
under these plans are listed on our website (www.goldfields.co.za)
(cid:2)(cid:3) Attain an occupancy rate of one person per room (in on-site
accommodation): Gold Fields has completed more than 90% of
planned hostel upgrades at Beatrix, KDC East and KDC West,
and has made significant progress in terms of the establishment
of family accommodation. During 2011, Gold Fields built 100
family units and upgraded 541 hostel units. At the end of 2011,
the occupancy rate at hostels at Beatrix, KDC East and KDC West
averaged 1.45 per room. South Deep’s licence was only approved
in 2010 and was followed by an engagement process with
organised labour. As a result, the hostel upgrade programme
at the mine will only be initiated in 2012
155
Securing our future responsibly
Royalties and revenues
Australia
Gold Fields is not currently affected
by the Mineral Resource Rent Tax,
which is expected to be passed by
the Senate in early 2012. Although
the tax will only apply to large-scale
iron and coal mining companies, it
is an important political milestone
in the current government’s efforts
to increase the fiscal burden on
the Australian mining sector. As a
result, we will monitor developments
to identify any efforts to expand
the imposition of further taxes on
our operations.
Likewise, in November 2011,
Australia’s Senate passed the Clean
Energy Act, which introduces a
national cap and trade carbon
scheme based on a carbon price
of A$23 a tonne. Although we do
not directly fall under the cap and
trade scheme, the legislation will
adjust fuel tax credits and excise
duties to apply an equivalent carbon
price to our diesel. This will directly
impact our operational costs as
of July 2012. The Clean Energy
Act again marks an important
political milestone that increases the
likelihood of higher carbon costs in
future. We will continue to monitor
the situation accordingly.
Ghana
The size of our production in Ghana
means we are a major contributor
to national revenues. In 2011, we
paid a total of US$247 million (2010:
US$160 million) in corporate taxes,
royalties, dividends, income taxes
and contributions to the National
Stabilisation Levy, making us
one of the largest contributors to
government revenues in the country.
The fiscal regime for the Ghanaian
mining sector has continued to
harden. As anticipated, in March
2011 mining royalty rates rose
from 3% to 5% and the temporary
National Stabilisation Levy of 5% of
pre-tax profits (introduced in 2009)
continued to apply.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
156
Securing our future responsibly
In early 2012, the Government of
Ghana introduced a set of additional
fiscal burdens on the mining
sector. These comprise a rise in the
Corporate Income Tax from 25% to
35%, introduction of a 10% Windfall
Profit Tax and a capital allowance of
20% for five years (previously 80% in
the first year).
Although the government also
announced the lifting of the
National Stabilisation Levy, these
taxes represent a serious new
imposition on the sector. This is of
particular concern given the existing
costs pressures faced by mining
companies in Ghana – including
rising energy, commodity and
labour costs. We are assessing the
implications of the tax changes with
respect to the viability of expansion
projects in the country.
Peru
In Peru, President Ollanta Humala’s
new government fulfilled a campaign
promise to raise taxes and royalties
on the mining sector to help fund
national infrastructure and address
rural poverty. In September 2011,
following constructive negotiations
with the mining sector, the
government raised royalties to
between 1% and 12% of operating
profits (previously 1% to 3% of sales)
– and introduced a windfall profits tax
of 2% to 8.4% on net profits. These
measures are expected to raise an
additional US$1.1 billion from the
mining sector.
In 2011, a 'Voluntary Mining
Contribution' (VMC) by the mining
sector was replaced by the new
mining tax. Gold Fields is using
remaining VMC funds to support
its malnutrition programme,
amongst others.
Although we are supportive of
the aims of the government in
addressing poverty and improving
national infrastructure, we are
concerned that any further
increases, beyond what has been
agreed, could impact on Peru’s
status as an attractive destination for
mining investment.
South Africa
In its 2012 Budget proposals,
released on 22 February 2012,
the South African government
confirmed the change in dividend
taxation from the 10% Secondary
Tax on Companies (STC) to a 15%
withholding tax on dividends paid
to shareholders. This will take effect
on 1 April 2012. As a result, the
effective gold mining tax rate, as
determined by the gold mining
tax formula, will be reduced with
effect from 1 January 2012 for gold
mining companies whose mines had
previously elected not to pay the STC.
All our South African mines had
elected to be exempt from the STC,
and their effective gold mining
formula tax rates will decrease from
1 January 2011. However, Gold
Fields itself, as a holding company
not conducting any gold mining
operations, was not exempt from
the STC. To the extent Gold Fields
received dividends from its South
African mines, these dividends
were offset against the amount of
dividends paid by Gold Fields for
the purposes of calculating the net
amount subject to the STC.
The repeal of the STC from 1 April
2012 onwards and the introduction of
the dividend withholding tax will lead
to a lower net effective tax rate paid
by Gold Fields at its South African
operations (a more detailed analysis
is included in the Financial Review).
5.4.3 Managing an ethical
and effective supply chain
Our integrated management
approach extends to our supply
chains. As a result, we not only
ensure we have a reliable and
economically advantageous
supply chain in place – but that our
suppliers operate in a responsible
and sustainable way that supports
local economic development.
By requiring our suppliers to accept
and adopt our social, environmental
and ethical standards – in addition
to our operational and commercial
requirements – we are able to
promote good business practice in
our supply chain.
This includes the requirement for all
contractors to meet our health, safety
and environmental management
standards, including the OHSAS
18001 and ISO 14001 standards.
The adherence of suppliers to our
standards is monitored through:
(cid:2)(cid:3) Pre-screening
(cid:2)(cid:3) Regular compliance audits
(by our own specialists or
third-party experts)
(cid:2)(cid:3) Regular reporting on a defined
set of compliance requirements
(for example, in the case of
strategic and/or critical projects)
Where incidents of non-compliance
are identified, we will develop joint
corrective action plans, unless
non-compliance is of a sufficiently
serious nature to justify termination.
In South Africa, we have a large
number of suppliers (approximately
5,000). As a result, we take a risk-
based approach by auditing those
who represent the top 80% (by
value) of our procurement spend.
These selected vendors must submit
a self-assessment check list with
any tender and are then subject
to subsequent auditing for issues
ranging from their Broad Based
Black Economic Empowerment
(BBBEE) status to child labour.
In 2011, we enhanced our ability
to screen and assess the risks
relating to suppliers through the
introduction of an online Sustainable
Sourcing Dashboard. This combines
objective sector- and country-risk
data (including human rights data),
context-specific data (such as
South Africa’s BBBEE requirements)
and our own standards (including
our supplier terms and Code of
Ethics). These are used to produce
supplier ‘scorecards’ – and to map
a wide range of risks through our
value chain. In future, we intend to
further enhance the system through
the integration of supplier-self
assessment data and audit data.
Additional content online
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Case study
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In June 2011, the World Gold Council (WGC) unveiled two new draft standards to address ‘conflict gold’ (i.e.
gold that “enables, fuels or finances conflict”):
(cid:2)(cid:3) The Chain of Custody Standard (to identify the origin of gold)
(cid:2)(cid:3) The Conflict-Free Gold Standard (to ensure the exclusion of conflict gold from global supply chains)
These complementary standards provide assurance from extraction through to refining, and will enable gold
mining companies to certify their gold as ‘conflict free’ on a global basis. They will also support gold mining
companies in their efforts to meet mineral traceability and due diligence requirements. This includes those set
out in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected
and High-Risk Areas, as well as Section 1502 of the US Dodd–Frank Wall Street Reform and Consumer
Protection Act. In addition, the standards will help guide companies as to how to monitor and minimise gold
‘leakage’ from the global value chain.
All Gold Fields production originates from its own mining operations – meaning there is only minimal risk of
externally-derived conflict gold entering its value chain. Nonetheless, Gold Fields is playing a leading role in
piloting and ‘stress testing’ the standards. In particular, Gold Fields is voluntarily adopting the standards as
best practice across all of its gold mines, regardless of their relative risk exposure to conflict gold.
Gold Fields supports the development of the draft standards, which are expected to be finalised in mid-2012.
Nonetheless, we took a number of actions to support implementation of the standards during 2011:
(cid:2)(cid:3) The mapping of the ‘journey’ of gold through the Gold Fields value chain in South Africa. This included the
identification of measuring points and a review of relevant documentation to help establish certification
audit controls – from the shaft through to the exit of gold doré from the processing plant. This was
completed for all South Africa operations in November 2011, with the assistance of third-party auditors. A
full ‘walk-through’ of this process was then undertaken at KDC East – with participation from the WGC – to
identify strengths and weaknesses associated with the practical application of the standards at a fully
operational mine
(cid:2)(cid:3) The first pilot application of the standards at the Tarkwa and Damang mines in Ghana in December 2011.
This included a more comprehensive walk-through of the process, which built on Gold Fields efforts at
KDC. This focused on testing the associated assurance framework and related communications materials.
The walk-through highlighted the robustness and transparency of Gold Fields existing assurance
processes and controls
(cid:2)(cid:3) Continued collaboration with the Rand Refinery (34.9% owned by Gold Fields), which refines approximately
75% of all African gold, including all gold from Gold Fields South African and West African operations.
Through this relationship, Gold Fields hopes to contribute to the success of the standards throughout the
entire gold value-chain
www.gold.org
www.oecd.org
www.sec.gov
www.randrefinery.com
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Our security personnel also help to
enforce good safety practices on
our sites by observing, recording
and rectifying examples of poor
practice – and participate in
emergency response activities
where needed.
Where relevant, GFPS personnel
are supported by private security
contractors. This includes, for
example, the presence of G4S
security personnel at our mines in
Ghana. G4S is a signatory to the
UN Global Compact, as well as the
International Code of Conduct for
Private Security Providers.
In addition to our standard security
controls, in 2011 we piloted the
application of Xscann Body Scanner
technology in South Africa. This
low-dose X-ray technology produces
images of sufficient resolution to
detect even very small amounts of
gold on a person – making it a key
deterrent to those tempted to illegally
smuggle gold out of our shafts. The
fact that Xscann uses only very low
X-ray doses means it can be applied
repeatedly at no risk to human health.
We plan to roll out this programme
more fully, depending on the
outcome of its pilot application.
Additional content online
<<<+(cid:4)(cid:12)(cid:18)(cid:31)(cid:14)(cid:8)(cid:7)(cid:18)(cid:31)(cid:19)+(cid:17)(cid:12)+_(cid:16)
www.icoc-psp.org
www.g4s.com.gh/en-gh
158
Securing our future responsibly
5.4.4 Securing people
and assets whilst
respecting human rights
Gold Fields Protection Services
(GFPS) is responsible for the
effective and responsible protection
of our people and assets. All GFPS
personnel receive human rights
training during induction. This
training is based on local legal
requirements, the terms of the
Mining Charter and human rights
best practice. GFPS is a signatory of
the International Code of Conduct
for Private Security Providers, which
commits all signatories to respect
human rights and humanitarian law
in their operations.
The primary duties of the GFPS are to:
(cid:2)(cid:3) Address illegal internal activity,
including gold theft, fraud and
other illicit activities carried out
by employees
(cid:2)(cid:3) Address illegal external activity,
including illegal gold mining
(p149-153), cable theft and
other illicit activities carried out
by third parties
(cid:2)(cid:3) Ensure the safety and security of
our bullion despatches and cash
escorts (including armed escorts
in South Africa)
How does GFPS address
illegal activity within
Gold Fields?
Relevant techniques and
technologies include:
(cid:2)(cid:3) Pre-employment screening
(cid:2)(cid:3) Metal detection systems
(cid:2)(cid:3) Role-specific area
access cards
(cid:2)(cid:3) Biometric access systems
(cid:2)(cid:3) Security data systems to
improve control of access
and movement (such as
‘SecureBase’ at Tarkwa
(cid:2)(cid:3) Centralised CCTV
monitoring
(cid:2)(cid:3) Use of an anonymous,
independently managed
whistleblowing hotline
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
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Securing our future responsibly
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
160
Assurance statements
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
161
Assurance statements
Based on the work performed
by GFIA during the year, the
Senior Manager has presented
the Audit Committee with an
assessment on the effectiveness of
the company’s system of internal
control and risk management,
internal financial controls as well as
the IT control framework. It is GFIA’s
opinion that the internal control
environment and risk management
processes are adequate within the
Gold Fields business and provide
reasonable, though not absolute,
assurance that the objectives of
Gold Fields will be met.
This GFIA written assessment forms
one of the bases for the Audit
Committee’s recommendation in this
regard to the Board.
Shyam Jagwanth
Senior Manager:
Gold Fields Internal Audit
Johannesburg, South Africa
23 March 2012
6.1 Internal
Audit Statement
Gold Fields Internal Audit (GFIA)
is an independent assurance
provider to the Gold Fields Audit
Committee on the effectiveness of
the risk management, control and
governance processes within
Gold Fields. The risk-based annual
audit plan covers the breadth and
depth of the Gold Fields value chain
and, together with the Internal Audit
mandate, is approved by the Audit
Committee annually.
The internal audit activities are
conducted either by a team
of appropriate, qualified and
experienced employees, or through
the engagement of external
practitioners on specialised and
agreed terms. The Internal Audit
team is based centrally, in South
Africa, but services all the
Gold Fields operations globally.
The GFIA Senior Manager provides
quarterly feedback to the Audit
Committee and has a functional
reporting line to the Audit
Committee Chair.
GFIA follows a risk-based audit
methodology, which is in compliance
with the Institute of Internal Auditors’
(IIA) “International Standards
for the Professional Practice of
Internal Auditing”. Furthermore,
GFIA operates a quality assurance
programme that involves performing
detailed quality review assessments
at an activity and functional
level. GFIA’s quality assurance
programme has been assessed as
“generally compliant” with the IIA
standards, the highest rating of the
degree of conformity.
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Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
162
Assurance statements
6.2 Second party
assurance on reporting
Background
This is the second year of
collaboration between Gold Fields
and Maplecroft. Our work focuses
on the joint development of the
Integrated Annual Review 2011
and the development of a leading
Sustainable Development strategy.
Maplecroft recognises that it is not
an independent party.
Methodology
Maplecroft worked closely with
Gold Fields to collect, analyse and
review information and data across
all areas covered in the Integrated
Annual Review 2011. This included:
(cid:2)(cid:3) Field work and site visits in
Australia, Ghana, Peru, the
Philippines and South Africa –
including to mine sites, regional
headquarters and the group
head quarters
(cid:2)(cid:3) Interviews with senior managers,
discipline experts and other
relevant Gold Fields employees
across the operational,
sustainability and financial
disciplines and in all regions
The validity of original data was not
checked at source by Maplecroft
although we did follow up and
check to ensure consistency and
to understand trends and reasons
for improvements or changes. We
completed a rigorous peer review of
all data and documentation within
Maplecroft to ensure the accurate
and comprehensive representation
of original data, any anomalies
or gaps in data that could not
be resolved by Maplecroft were
referred back to relevant employees
within Gold Fields for clarification
and later audit by an independent
third party organisation, in this
case, KPMG.
We also prepared drafts of all text
and worked closely with discipline
experts in the refinement of report
content (including clarification,
review and feedback) to ensure the
information presented is fair, accurate
and in line with the expectations
of stakeholders.
All work completed by Maplecroft is
informed by best practice initiatives
and standards. These include the
integrated reporting guidance
included in the King III Code. We are
also informed by the United Nations
Global Compact, the United Nations
Millennium Development Goals, the
Global Reporting Initiative (GRI)
G3.1 Guidelines, the GRI Mining and
Metals Sector Supplement, the ICMM
principles and World Gold Council
Responsible Gold criteria as well as
the AA 1000 assurance standard.
AA 1000 principles
2. Completeness
Our inspection of documents,
as well as our engagement with
and enquiry of discipline experts
did not identify any material
shortfalls with respect
to completeness of reporting.
Indeed, Gold Fields has proactively
sought to identify and report on
potentially challenging and sensitive
dilemmas, risks and responsibilities
in respect of the following relevant
and material issues:
(cid:2)(cid:3) The strategic need to stabilise
production in South Africa and
reduce NCE margins (p11-14,
46-49, 78-81)
(cid:2)(cid:3) Challenges around energy
pricing in Australia, Ghana and
South Africa (p16-17, 68)
(cid:2)(cid:3) Potential future challenges
around Acid Mine Drainage in the
Wits Water Basin (p63-65)
We believe Gold Fields has
achieved broad compliance with
the AA 1000 principles of materiality,
completeness and responsiveness.
(cid:2)(cid:3) Hardening, or potentially
hardening, fiscal regimes in
Australia, Ghana, Peru and South
Africa (p16, 155-156)
1. Materiality
In line with the recommendations
made in the King III Code around
integrated reporting, this report
discloses and explains an
integrated and coherent framework
for the analysis of Gold Fields
strategy, risks, performance and
sustainability. In our view, this report
directly and transparently addresses
Gold Fields top 10 risks (p38-39).
The Gold Fields Annual Review
also discloses and examines
relevant and material stakeholder
issues (p40-43).
The report provides a comprehensive
overview of all that Gold Fields is
doing to manage these and other
issues proficiently and responsibly.
(cid:2)(cid:3) Management of illegal artisanal
and small-scale mining in
Ghana (p149-153)
3. Responsiveness
Gold Fields carries out a wide range
of stakeholder engagement activity,
both at strategic (i.e. head office)
and operational (i.e. mine, project
or exploration camp) levels. It is our
view that these interactions have
done much to inform the content and
form of this report. This includes, for
example, ongoing and enhanced
emphasis on:
(cid:2)(cid:3) Integrated reporting and
management practices
(cid:2)(cid:3) Risk identification, management
and mitigation
(cid:2)(cid:3) The understanding of concerns
relevant and material to investors
as stakeholders
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
163
Assurance statements
We believe this report represents a
relevant and complete statement of
the integrated performance of
Gold Fields. In our view, the
Gold Fields statement that it has
applied the GRI G3.1 guidelines at
level A+ is also fairly stated.
Professor Alyson Warhurst
Dr Kevin Franklin
Gus Macfarlane
Maplecroft, United Kingdom
23 March 2012
www.maplecroft.com
6.2.1 Recommendations
Key areas for further improvement:
1. Sustainability data
There were some challenges in
relation to data-gathering due to
the implementation of a new and
ambitious online system for the
reporting of data relevant to the
Global Reporting Initiative. It is
recommended that feedback from
the latest reporting period be used
to help inform further improvements
to the system in terms of continuity
of definitions, accuracy of input,
utility of output and methodological
continuity. It is anticipated that this
will further enhance the system
in terms of efficiency, accuracy
and standardisation of output.
Nonetheless, data gathering was
found to be conscientious and exact.
Beyond this, it is recommended that
Gold Fields moves towards a fully
integrated data reporting system
that will satisfy all of its internal and
external reporting needs, without
duplicating input efforts on the
part of discipline experts. This will
deliver improvements in terms of
consistency of data, efficiency and
internal buy-in.
2. A more direct relationship
between stakeholder
engagement and reporting
It is recommended that
Gold Fields seeks expert opinion
from third-party stakeholders on (a)
the specific issues being reported
on; and (b) how well these issues are
being reported on. This includes, for
example independent assessment of
Gold Fields cited risks. The outcome
of such engagement should be used
to inform the development of future
reports in terms of reporting focus,
as well as direct referencing in the
form of quotes, articles, etc.
3. Greater detail around
local engagement
As with the Integrated Annual Report
2010, the Integrated Annual Review
2011 provides a good overview of
stakeholder engagement at group-
and region-level. It is recommended
that further effort is made to report
more fully on issues raised by
stakeholders at each operation –
and to follow progress in the
addressing of these concerns over
time. A step has already been made
in this direction with respect to the
Far Southeast project in the
Philippines (p106-107).
4. Increased emphasis on the
impact of socio-economic
development spending
Gold Fields has made good progress
in the more accurate reporting of its
socio-economic development spend
(p142-143). It is recommended that
increased effort not be made to
develop a strong methodology to
assess the actual impact of such
spending, report on this more fully
in future Integrated Annual Reviews
and integrate this into project
assessment procedures.
5. Increased implementation of
risk-based reporting
The wide breadth of issues covered
in the Integrated Annual Review
2011 – as well as the detail offered
– means it is likely to remain a
substantial and comprehensive
document. In this context, it is
recommended that Gold Fields
moves further towards explicit
risk-based reporting to help
prioritise what information should be
included in the hard copy and what
information can live online. Although
steps have already been made in this
direction, there is further room to go
in future iterations of the Integrated
Annual Review.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
164
Assurance statements
6.3 Independent Assurance
Report to the Directors of
Gold Fields Limited
Report on Selected
Sustainability Information
We have undertaken a limited
assurance engagement on selected
sustainability information, as
described below and presented
in the Integrated Annual Report of
Gold Fields Limited (Gold Fields) for
the year ended 31 December 2011
(the Report), as set out on the pages
indicated below.
Subject matter and
related assurance
The subject matter of our
engagement and related assurance
is as follows:
1) In compliance with the
International Council of Mining
and Metals’ (ICMM) Sustainable
Development Framework:
Assurance Procedure (ICMM
Assurance Procedure), Subject
Matters 4 (selected performance
data) and 5 (self-declared
application level in accordance
with the Global Reporting
Initiative (GRI) G3.1 Guidelines)
as described below:
(a) Limited assurance on Subject
Matter 4, on page 167 of
the Report:
(cid:2)(cid:3) Social and Labour Indicators
- HDSA (percentage
in management), Total
procurement spend from BEE
entities, Procurement spend
from BEE entities (in line with
the mining charter categories
of capital goods, services
& consumable goods) and
Social Economic Development
spend (SED) in ZAR.
(cid:2)(cid:3) Health and Safety Indicators
– Number of cases of
Silicosis diagnosed, Number
of noise induced hearing
loss cases diagnosed
(NIHL), Number of chronic
obstructive airways diseases
cases reported and treated
(COAD), Cardio respiratory
Tuberculosis (number of
new cases reported and
treated), Number of cases of
respiratory diseases reported
and treated, Number of cases
of Malaria tested positive per
annum, Number of employees
in HAART programme
(cumulative), Percentage of
workforce on the voluntary
counselling and testing
(VCT) programme, Lost time
injury frequency rate (LTIFR),
Medically treatment injury
frequency rate (MTIFR) and
Number of fatalities.
(cid:2)(cid:3) Environmental Indicators –
Number of environmental
incidents (level 3 and above)
reported, CO2 Equivalent
Emissions Scope 1-3 (in
Tonnes), Average quality of
water discharged in
milli-Siemens/metre (MS/m),
Electricity (MWh), Total
water consumption per annum
from all sources (in Ml) and
Diesel (TJ).
(b) Limited assurance on
Gold Fields’ self-declaration
of the GRI A+ application level
– Subject Matter 5, on page 3 of
the Report.
2) In compliance with the Broad-
Based Socio-Economic
Empowerment Charter for
the South African Mining and
Minerals Industry (BBSEEC) and
related Scorecard:
(c) Limited assurance on selected
Mining Charter elements, on
pages 155 and 167 of the
Report, prepared in compliance
with the BBSEEC (2002) and
related Scorecard (2004):
Historically Disadvantaged
South African’s (HDSA’s) in
Management: Percentage of
employees who are classified as
designated groups and who are
employed at management levels;
Number of houses to be built as
part of the housing and hostel
upgrade programme; Number
of rooms completed as part of
the housing and hostel upgrade
programme; and Community
Development: Rand Value Spend
on approved SLP projects.
(d) Limited assurance on selected
Mining Charter elements, on
pages 155 and 167 of the
Report, prepared in compliance
with the Amendment to the
BBSEEC (2010) and related
Scorecard (2010):
HDSA ownership: Meaningful
economic participation and full
shareholder rights in line with
the Mining Charter definitions
and measurement; Housing and
living conditions: Occupancy
rate; Total procurement spend
from BEE entities; Procurement
and Enterprise Development:
Procurement spend from BEE
entities, in line with the Mining
Charter categories of capital
goods, services & consumable
goods; and Implement approved
community projects.
Directors’ Responsibilities
The Directors are responsible for
the preparation and presentation of
the Report as well as the information
and assessments contained within it,
and for determining the company’s
objectives in respect of sustainable
development performance, including
the identification of stakeholders
and stakeholder reporting
requirements, the identification of
material issues, for commitments
with respect to sustainability
performance, for establishing
and maintaining appropriate
performance management and
internal control systems from which
the reported information has been
derived, and the selection of the
sustainability performance indicators
which form the subject matter of our
assurance engagement.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Management are also responsible
for the selection and application of
the following reporting criteria used
in the evaluation of the respective
subject matter:
We believe the evidence we have
obtained is sufficient and appropriate
to provide a basis for our limited
assurance conclusions.
165
Assurance statements
(cid:2)(cid:3) Conducting an application
level check on the Report to
evaluate whether all disclosure
requirements of the GRI A+
application level have been
adhered to.
(cid:2)(cid:3) Evaluating whether the
information presented in the
Report is consistent with our
findings, overall knowledge and
experience of sustainability
management and performance at
Gold Fields.
Conclusions
In relation to the Report for the year
ended 31 December 2011, we report
(a) On the selected performance
data on which we are required to
express limited assurance
Based on our work performed,
nothing has come to our
attention that causes us to
believe that the selected
performance data identified in
(a) above is not fairly stated,
in all material respects, in
accordance with the GRI G3.1
Guidelines.
(b) On Gold Fields’ self-declaration
on the GRI A+ application level
on which we are required to
express limited assurance
Based on the procedures
performed, we concur with the
assessment made by Gold
Fields, that the Integrated Annual
Report for 31 December 2011
is consistent with the GRI G3.1
application level A+.
(c) On the selected mining charter
elements on which we are
required to express limited
assurance
Summary of work performed
Our work included the following
evidence-gathering procedures:
(cid:2)(cid:3) Interviewing management and
senior executives at group level
to evaluate the application of
the GRI G3.1 Guidelines, the
Broad Based Socio-Economic
Empowerment Charters (2002
and 2010) and related Scorecards
and to obtain an understanding
of the internal control environment
relative to the reported
sustainability information.
(cid:2)(cid:3) Inspecting documentation at
corporate level to corroborate
the statements of management
and senior executives in our
interviews.
(cid:2)(cid:3) Understanding the risk
assessment process and the
information systems which
inform the related sustainability
reporting processes.
(cid:2)(cid:3) Testing the processes and
systems at group level and site
level which generate, collate,
aggregate, monitor and report
the selected sustainability
information.
(cid:2)(cid:3) Performing site work at Gold
Fields’ Driefontein, Kloof, Beatrix,
South Deep, Tarkwa and Damang
operations (which represents
the most material contribution
to the selected sustainability
performance information – ICMM
Subject Matter 4) and also
performing desk top work on
the St. Ives, Agnew and Cerro
Corona operations.
(cid:2)(cid:3) Performing site work at Gold
Based on our work performed,
Fields’ Driefontein, Kloof, Beatrix
and South Deep in terms of
selected elements from the
Broad Based Socio-Economic
Empowerment Charters
(2002 and 2010) and related
Scorecards.
nothing has come to our attention
that causes us to believe that the
selected mining charter elements
identified in (c) above have not
been prepared, in all material
respects, in compliance with
the BBSEEC (2002) and related
Scorecard (2004).
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
(cid:2)(cid:3) (a), Gold Fields’ reported
performance during the
given reporting period for the
identified material SD risks
and opportunities (ICMM
Subject Matter 4): the GRI
G3.1 Guidelines.
(cid:2)(cid:3) (b), Gold Fields’ self declared
A+ application level of the GRI
G3.1 Guidelines in relation to
subject matter 5 of the ICMM
Assurance Procedure: the GRI
G3.1 Guidelines for the A+
application level.
(cid:2)(cid:3) (c), selected mining charter
elements: the BBSEEC (2002)
and related Scorecard (2004).
(cid:2)(cid:3) (d), selected mining charter
elements: the Amendment to
the BBSEEC (2010) and related
Scorecard (2010).
Our Responsibility
Our responsibility is to express
assurance conclusions on the
subject matter in (a), (b), (c),
and (d) based on our work
performed. We conducted our
engagement in accordance with
the International Standard on
Assurance Engagements (ISAE)
3000, Assurance Engagements
other than the Audits or Reviews
of Historical Financial Information,
issued by the International Auditing
and Assurance Standards Board.
That Standard requires that we plan
and perform our engagement to
obtain assurance about whether
the selected information is free from
material misstatement.
Our procedures selected depend on
our judgment including the risks of
material misstatement of the selected
sustainability information in the
Report, whether due to fraud or error.
In making our risk assessments,
we considered internal controls
relevant to Gold Fields’ preparation
of the Report. In a limited assurance
engagement, the evidence gathering
procedures are less than where
reasonable assurance is expressed.
166
Assurance statements
(d) On the selected mining charter
elements on which we are
required to express limited
assurance
The implementation of systems and
approaches that Gold Fields is using
to manage its material safety risks
and opportunities.
Based on our work performed,
nothing has come to our
attention that causes us to
believe that the selected mining
charter elements identified in (d)
above, have not been prepared,
in all material respects, in
compliance with the Amendment
to the BBSEEC (2010) and
related Scorecard (2010).
Report on the ICMM
Assurance Procedure
We are required to report our
findings on the International
Council of Mining and Metals’
(ICMM) Sustainable Development
Framework: Assurance Procedure
(ICMM Assurance Procedure) in
respect of:
1 The alignment of Gold Fields’
sustainability policies to
the ICMM 10 Sustainable
Development (SD) Principles and
any mandatory requirements set
out in ICMM Position Statements
(ICMM Subject Matter 1).
2 The reporting of Gold Fields’
material sustainable development
risks and opportunities based
on a review of its business and
the views and expectations of
its stakeholders (ICMM Subject
Matter 2).
3 The implementation of systems
and approaches that Gold Fields
is using to manage its material
safety risks and opportunities
(ICMM Subject Matter 3).
Directors’ Responsibilities
The Directors are responsible for:
The alignment of Gold Fields’
sustainability policies to the ICMM
10 SD Principles and any mandatory
requirements set out in ICMM
Position Statements.
The reporting of Gold Fields’
material sustainable development
risks and opportunities based on a
review of its business and the views
and expectations of its stakeholders.
Our Responsibility
Our engagement included reporting
on the ICMM Assurance Procedure
in respect of 1, 2 and 3 above
based on the knowledge obtained in
our evidence gathering procedures
in our assurance engagement on
the subject matters in (a) and (b)
set out in our ‘Report on Selected
Sustainability Information’ above.
Findings
Based on our evidence gathering
procedures in our assurance
engagement for the year ended
31 December 2011 on the subject
matter in (a) and (b) set out in our
‘Report on Selected Sustainability
Information’ above, nothing has
come to our attention that causes us
to believe that:
1 Gold Fields’ sustainability
policies are not aligned with the
ICMM 10 SD Principles and any
mandatory requirements set out
in ICMM Position Statements.
2 Gold Fields has not reported
material sustainable
development risks and
opportunities based on a
review of its business and the
views and expectations of its
stakeholders.
3 Gold Fields has not implemented
systems and approaches to
manage its material safety risks
and opportunities.
Independence, Expertise and
Limitation of Liability
We have complied with the
International Federation of
Accountants’ Code of Ethics
for Professional Accountants,
which includes comprehensive
independence and other
requirements founded on
fundamental principles of integrity,
objectivity, professional competence
and due care, confidentiality and
professional behaviour.
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
Our engagement was conducted by
a multidisciplinary team of health,
safety, social, environmental and
assurance specialists with extensive
experience in sustainability reporting.
Our work has been undertaken to
enable us to express the assurance
conclusions on the subject matters
in (a), (b), (c), and (d) in our
‘Report on Selected Sustainability
Information’ together with findings
on 1, 2 and 3 in our ‘Report on
the ICMM Assurance Procedure’
to the Directors of Gold Fields
in accordance with the terms of
our engagement, and for no other
purpose. We do not accept or
assume liability to any party other
than Gold Fields, for our work, for
this report, or for the conclusions we
have reached.
KPMG Services (Pty) Limited
Per PD Naidoo
Director
Johannesburg
23 March 2012
KPMG Crescent
85 Empire Road
Parktown
Johannesburg
2193
Per I Kramer
Director
Johannesburg
23 March 2012
KPMG Crescent
85 Empire Road
Parktown
Johannesburg
2193
167
Assurance statements
Figure 1: Group operating statistics
Parameter
Environment
Unit
Average quality of water discharged in milli-Siemens/meter
mS/m
CO2 equivalent emissions, Scope 1-3
Electricity
Tonnes CO2-e
MWh
Number of environmental incidents - Level 3 and above
Level 3 and above
Total water consumption per annum from all sources
Diesel
Health
Ml
TJ
Number of cases of Silicosis diagnosed
Number of cases diagnosed
Number of cases of Noise Induced Hearing Loss diagnosed
Number of cases diagnosed
Number of cases of chronic obstructive airways diseases
reported and treated
Number of cases reported
and treated
Cardio respiratory Tuberculosis
Number of cases of Malaria tested positive per annum
Number of new cases
reported and treated
Number of cases tested
positive for Malaria
Data
77
6.09 million
5,469,784
5
78,236
5,440
107
139
66
642
215
Number of cases of respiratory diseases reported and treated Number of cases reported
3,894
Number of employees in HAART programme (cumulative)
and treated
Cumulative number
of employees
Percentage of workforce on the voluntary counselling and
testing (VCT) programme
Percentage of the workforce
on the VCT programme
Safety
LTIFR
MTIFR
Number of Fatalities
Social
Rate
Rate
Number
3,523
10.70%
4.69
5.68
20
Total socio economic development (SED) spend in Rand
Rand
387.3 million
Mining Charter elements
Percentage HDSA in Management (DL-FL) who are classified
as designated groups and who are employed at management
levels (BBSEEC, 2002 and 2010)
Number of houses to be built as part of the housing and
hostel upgrade programme
Number of rooms completed as part of the housing and
hostel upgrade programme (BBSEEC, 2002)
Senior %
Middle %
Junior %
Total %
Number of houses to be built
30%
41%
43%
43%
100
Number of rooms completed
541
Rand Value spent on approved SLP projects (BBSEEC, 2002)
Rand
Total procurement spend from BEE entities (BBSEEC, 2010)
Rand
BEE Procurement Spend (BBSEEC, 2010): Capital, Services
and Consumables
Capital goods %
Services %
Consumer goods %
Housing and living conditions: Occupancy rate (BBSEEC, 2010) Rate
Implement approved community projects (BBSEEC, 2010)
List of approved projects
18 million
3,455,068,747
47%
46%
46%
1.45
Tailings Cleanup
Futyana Bakery
Living Gold
Simunye Clinic
Nkululeko Creche
Eradication of Alien Invaders
Bekkersdal Flagship Project
Brick making
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
168
Assurance statements
Gold Fields – Integrated Annual Review for the 12 months ended 31 December 2011
a
c
i
r
f
A
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,
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This report is printed on Triple Green, which is chlorine-free and biodegradable, comprises 60 percent sugar cane fibre and meets the standard
of sustainable forestation.
“If we cannot mine safely,
we will not mine”
Gold Fields Safety Value
150 Helen Road
Sandown
Sandton, 2196
Johannesburg
Gauteng
Private Bag X30500
Houghton, 2041
South Africa
Telephone: (+27) (11) 562 9700
Facsimile: (+27) (11) 562 9838
Acknowledgments
Prepared and produced by Gold Fields
in partnership with Maplecroft
Design: Maplecroft
Printing: Bastion Graphics
© Gold Fields 2012. All rights reserved
Gold Fields: Annual Report - For the 12 months ended 31 December 2011