Integrated Annual Report
for the year ended 31 December 2015
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To be the global leader
in sustainable gold mining
1.1 About this report
Our 2015 Integrated Annual Report
comprises the following volumes:
❯ The Integrated Annual Report (IAR) 2015,
which examines the integrated nature of
our operational, financial and sustainability
performance
❯ The Annual Financial Report 2015, which
fulfils our statutory financial reporting
requirements
❯ The Mineral Resources and Mineral
Reserves Overview 2015, which provides
detailed technical and operational
information on our mines and growth
projects
❯ Gold Fields Global Reporting Initiative
(GRI) Content Index for the IAR 2015
The aim of our integrated approach is
to enable our stakeholders, including
investors, to make a more informed
assessment of the value of Gold Fields and
its prospects. The IAR also forms part of our
Communication on Progress to the United
Nations Global Compact. A summary of our
adherence to the GRI, the 10 Principles of
the United Nations Global Compact and the
10 Principles of the International Council on
Mining & Metals (ICMM) and its mandatory
requirements of the position statements are
presented online.
Forward looking statements
Readers are referred to the forward looking
statements on p148.
About Gold Fields
Gold Fields Limited is an unhedged,
globally diversified producer of gold with
eight operating mines in Australia, Ghana,
Peru and South Africa with attributable
annual gold production of approximately
2.2 million ounces. It has attributable
Mineral Reserves of around 46 million
ounces and Mineral Resources of around
102 million ounces. Attributable copper
Mineral Reserves total 532 million pounds
and Mineral Resources 910 million
pounds. Gold Fields has a primary listing
on the JSE Limited, with secondary
listings on the New York Stock Exchange
(NYSE) and the Swiss Exchange (SWX).
How to read this integrated Annual report:
GOLD FIELDS AR 2015 PROOF 2_3 MARCH 2016
Integrated Annual Report
for the year ended 31 December 2015
Mineral Resource and Mineral Reserve
Supplement to the Integrated Annual Report
for the year ended 31 December 2015
To be the global leader
in sustainable gold mining
To be the global leader
in sustainable gold mining
Integrated Annual Report
Mineral Resources and
Reserves Supplement
GOLD FIELDS FINANCIAL REPORT 2015 SHELL 01_02 FEBRUARY 2016
Annual Financial Statements
for the year ended 31 December 2015
GRI G4 Content Index
for the year ended 31 December 2015
Download this QR code from
your smartphone to gain quick
access to our website
To be the global leader
in sustainable gold mining
To be the global leader
in sustainable gold mining
Annual Financial Report
Global Reporting
Initiative (GRI) Content
Index
The Gold Fields Integrated Annual Report 2015 www.goldfields.com
Contents
1
IFC
2
4
5
8
10
12
2
14
16
31
39
42
3
52
57
4
60
61
68
5
90
92
6
122
126
132
7
138
139
143
Our business
1.1 About this report
1.2 Our operating environment
1.3 Gold Fields DNA
1.4 Our value creation model
1.5 Gold Fields annual performance dashboard
1.6 Total value distribution
1.7 Group performance scorecard 2015
Leadership, governance and
materiality
2.1 Vision of the Chairperson
2.2 CEO Report
2.3 Corporate governance
2.4 Operating context
2.5 Risk and materiality
Financial focus
3.1 Introduction
3.2 Strategic focus areas
Business optimisation
4.1 Introduction
4.2 Operational performance overview
4.3 Strategic focus areas
Social licence to operate
5.1 Introduction
5.2 Strategic focus area
Focus on people
6.1 Driving a high-performance culture
6.2 Strategic focus areas
6.3 Remuneration and benefits
Assurance
7.1 First party: Internal audit statement
7.2 Independent Assurance Provider’s Report
to the Directors of Gold Fields Limited
7.3 Key sustainability performance data
147
Administration and corporate information
Scope and boundaries of
this report
This is Gold Fields’ 2015 IAR.
It covers the reporting period from
1 January 2015 to 31 December
2015. The previous IAR was
published in March 2015 and
covered the financial reporting
period from 1 January 2014 to
31 December 2014.
This IAR provides an overview of
Gold Fields’ eight global operations
in Australia, Ghana, Peru and South
Africa, as well as our exploration and
business development activities.
Detail on the exact location of each
operation and project can be found
on the global map on page 2.
We use an integrated approach to
reporting that examines our
operational, financial and
sustainability performance. All
non-financial data for 2013 exclude
the Yilgarn South assets we acquired
that year, unless otherwise indicated.
All 2014 and 2015 non-financial data
are inclusive of the Yilgarn South
assets. Furthermore, all 2012 data,
where stated, cover only the
continued operations of Gold Fields,
i.e. they exclude the contributions
from the Sibanye Gold assets, which
were unbundled from Gold Fields in
February 2013. This report has been
compiled in accordance with the
GRI’s G4 Guidelines and the
International Integrated Reporting
Council Framework. Gold Fields also
references a broad range of
additional codes, frameworks and
standards in compiling the report,
the full list of which can be found on
page 35. We believe the Integrated
Annual Report, together with
additional documents held online,
complies with the requirements of
GRI G4 Core Reporting Guidelines.
An average exchange rate for 2015
of R12.68 and A$0.72 to the
US Dollar have been used in this
report. For 2016 forecasts exchange
rates of R14.14 and A$0.73 to the
US Dollar have been used.
Assurance
Our auditors, KPMG, have provided
reasonable assurance on selected
sustainability information in this
report, which is prepared in
accordance with the GRI G4
guidelines. As a member of the
ICMM we are committed to obtaining
assurance in line with the ICMM
Sustainable Development
Framework: Assurance Procedure.
KPMG has provided assurance on the
four subject matters of the ICMM
(ICMM subject matter 5 is not
applicable due to Gold Fields’
transition to GRI G4 Core). The key
sustainability performance data for
assurance by KPMG in 2015 can be
found on page 143.
Board approval
The Gold Fields Board of Directors
considers that this IAR complies in all
material respects with the relevant
statutory requirements of the various
regulations governing disclosure and
reporting by Gold Fields and that the
annual financial statements comply in
all material respects with the South
African Companies Act No 71 of
2008, as amended, as well as with
International Financial Reporting
Standards. As such, the Board
approves the content of the IAR
2015, including the Annual Financial
Report 2015.
Cheryl Carolus
Chairperson of the Board
22 March 2016
www.goldfields.com
http://www.linkedin.com/company/gold-fields-ltd-?trk=top-nav-home
Send us your feedback
To ensure that we report on issues that matter to our stakeholders please provide any feedback and questions to:
media@goldfields.com, sustainability@goldfields.com or visit www.goldfields.com to download the feedback form.
1
The Gold Fields Integrated Annual Report 2015 The Gold Fields Integrated Annual Report 2015
1.2 Our operating environment
Key
Mines
Corporate Office
▲ Regional Offices
Projects
Far Southeast (Philippines)
Salares Norte (Chile)
Arctic Platinum project (Finland)
Status
Scoping study
Scoping study
For disposal
Cerro Corona
Lima
▲
Salares Norte (Chile)
Americas region
Gold Fields presence in the Americas region consists of
the Cerro Corona mine in Peru and the Salares Norte project
in Chile
2015
13%
Production
contribution to
Group
Safety
(TRIFR)1 score
All-in Cost
US$ per ounce3
Net cash inflow 2
US$m
1.2
1.0
0.8
0.6
0.4
0.2
0.0
15
14
2015:
0 fatalities
777
/oz
800
700
600
500
400
300
200
100
0
West Africa region
Gold Fields West Africa region consists of two mines in
Ghana, Tarkwa and Damang
Safety
(TRIFR)1 score
2015:
1 fatality
1.2
1.0
0.8
0.6
0.4
0.2
0.0
15
14
All-in Cost
US$ per ounce
1,049
/oz
1,200
1,000
800
600
400
200
0
150
120
90
60
30
0
15
14
2015:
US$35m
15
14
34%
2015
34%
Production
contribution to
Group
Net cash inflow 2
US$m
150
120
90
60
30
0
15
14
2015:
US$44m
15
14
1 TRIFR - Total Recordable Injury Frequency Rate ( Injuries per 1 million hours worked), including employees and contractors
2 Net cash flow from operating activities after taking account of net capital expenditure and environmental payments
3 Per gold - equivalent ounce
4 The two fatalities listed were workplace accidents. A third fatality occurred involving a member of the protection services team at South Deep, who was shot and killed
during a robbery at the mine
2
Arctic Platinum project (Finland)
The Gold Fields Integrated Annual Report 2015
Far Southeast
Tarkwa
Damang
▲
Accra
South Deep
¨ Johannesburg
Agnew
Granny Smith
Darlot
Perth
▲
St Ives
Australia region
The Australia region consists of four mines in Western
Australia - Agnew, Darlot, Granny Smith and St Ives - and the
Far Southeast project in the Philippines
2015
44%
Production
contribution to
Group
Safety
(TRIFR)1 score
All-in Cost
US$ per ounce
Net cash inflow 2
US$m
20
15
10
5
0
15
14
2015:
0 fatalities
912
/oz
1,200
1,000
800
600
400
200
0
300
250
200
150
100
50
0
15
14
2015:
US$255m
15
14
South Africa region
The South Deep mine, which is still in a ramp-up phase, is the
only operating asset in the South Africa region
Safety
(TRIFR)1 score
2015:
2 fatalities4
5
4
3
2
1
0
15
14
All-in Cost
US$ per ounce
1,559
/oz
2,000
1,500
1,000
500
0
2015
9%
9%
Production
contribution to
Group
Net cash outflow 2
US$m
2015:
US$80m
15
14
0
(20)
(40)
(60)
(80)
(100)
(120)
15
14
3
1.3 Gold Fields DNA
Our Vision
T
o
b
e
t
h
e
We are an international company
with a global portfolio of assets,
the location of which has been
informed by our global growth
strategy.
...le
g
l
o
b
al...
We focus solely
on gold mining.
This is our area
of expertise and
we believe in
the long-term value
of gold.
. g o l d m inin g
We focus on delivering sustainable value
- not just now but in the future. This means
responsibly managing our environmental and
social impact, and planning the business so that
we can continue to deliver value to our
stakeholders long into the future.
.
.
underpinned by
Our Values
.
.
r .
e
d
a
Being a leader
means focusing on
excellence and
delivering value to
our shareholders,
employees and host
communities.
...in
s
u
s
t
a
i
n
a
b
l
e
.
.
.
Safety
If we cannot
mine safely,
we will not mine
Integrity
We act with
honesty, fairness and
transparency
Respect
We treat all
stakeholders with trust,
dignity and respect
Innovation
We encourage
innovation and
entrepreneurial spirit
Delivery
We strive for excellence
and do what we
say we will do
Responsibility
We responsibly
manage our impact on
the environment and
host communities
to deliver on our
Stakeholder Charters
Employee
Charter
Investor
Charter
A safe, winning and
productive team
A quality portfolio of assets,
providing superior returns on gold
Society & Community
Charter
The most trusted and
valued mining partner
❯ To build a quality
portfolio of productive mines
❯ To provide superior returns
❯ To deliver on our commitments
❯ To build strong relationships and trust
❯ To create and share value
❯ To measure our actions and impact
❯ To deliver on our commitments
❯ To be a company of which employees
can be proud
❯ To celebrate achievement
❯ To treat employees with respect and
to work with them to ensure their
health and safety
❯ To provide the right development and
support for employees to succeed
❯ With employees’ help, to make
Gold Fields the best place to work
4
The Gold Fields Integrated Annual Report 2015
1.4 Our value creation model
How Gold Fields creates and distributes value
Gold Fields is able to create and distribute value to its stakeholders by
achieving its overarching strategic objective, which is to deliver a sustainable
free cash flow margin of 15% at a long-term planning gold price of US$1,300/
oz. This means we will not only invest to achieve this year’s targets but also
those in the years to follow.
A wide range of internal and external
factors – or inputs - have either had
a direct impact on or influenced the
development of this strategy. Many
of these inputs pose a risk to the
Group, and can be directly linked to
the top 10 risks on our business risk
register (p46), while others are an
opportunity.
At a macro level, we continually
consider the global geopolitical
climate and macroeconomic trends
as well as the socio-economic and
political environment in the specific
jurisdictions where we operate. In
recent years, gold price volatility and
a decline in prices have had a direct
impact on how we steer the
business strategically, and currently
pose a key business risk.
Furthermore, the level of exchange
rates in regions in which we operate
have a material influence on our
business.
Certain factors that are more directly
linked to our business include the
contributions and expectations of our
shareholders, host communities and
employees and contractors. The
public and fiscal policies of host
governments, and their stance on
the mining industry, is a further
important factor.
Our business uses a number of
capitals and resources including
natural, manufactured, human, social
and financial capital.
All of these inputs come together to
inform our strategy, which in turn is
executed by:
❯
❯
Improving the quality of our
portfolio: Having a quality
portfolio of assets allows us to
generate the cash needed
to meet our objectives.
A combination of business
optimisation and active risk
management allows us to grow
and improve the portfolio of
assets.
Focusing on delivery: In
addition to having a quality
portfolio of assets we also
require an absolute focus on
delivery. This is enabled by
driving a high-performance
culture, ensuring we have
superior processes in place and
employing and retaining the right
people in the right jobs.
The successful execution of our
strategy results in revenue creation,
and from this we are able to deliver
value to a number of stakeholders
and invest in host communities and
countries. We pay interest to
financial institutions, salaries to
employees, payments to suppliers
and taxes and royalties to
governments.
Once these payments are made, the
net cash remaining is used to reduce
our debt, pay dividends to
shareholders and invest in growth
– three of our most critical strategic
objectives.
This entire value generation and
distribution process is underpinned
by certain non-negotiable
fundamentals. These include
adherence to our safety ethos of ‘If
we cannot mine safely, we will not
mine’; securing and maintaining our
social licence to operate; meeting
our environmental responsibilities;
and, ensuring we have the necessary
licences in place to meet all
regulatory compliances. The Gold
Fields values, which inform the way
in which we work, also underpin all
aspects of our business.
For a graphic illustration
of our business model,
refer to the pages that
follow
5
The Gold Fields Integrated Annual Report 2015
1.4 Our value creation model (continued)
Factors influencing our strategy
External
Socio-economic and political environment
Exchange rates
Geographical environment
Gold and copper price
Macro-economic trends
Host governments
Host communities
Mining, water and other licences
▼
Business
Optimisation
▼
Active Risk
Management
h
g
u
o
r
h
T
▼
Improving the quality
of our portfolio
Our Strategy
To deliver a sustainable
free cash flow margin
of 15% at a gold
price of US$1,300/oz
➨
EXECUTED BY
TO DELIVER
Focusing
on delivery
▼
h
g
u
o
r
h
T
▼
High -
Performance
Culture
▼
Superior
Processes
▼
The right
people in the
right jobs
Social licence to operate
Values:
Safety
Integrity
Internal
Asset base
Our people
Our suppliers
Our vision
Our balance sheet
Our shareholders
6
The Gold Fields Integrated Annual Report 2015 GOLD
=
REVENUE
Strategic priorities
US$123m in
Reduce debt
net cash
generated
US$73 million
debt reduction
Dividends to
shareholders
25 SA
cents/share
Invest in growth
US$89 million brownfields
exploration and project
development spend
Total value distribution
Interest and dividends
paid to investors
US$117m
Supplier payments
US$1,663m
Salaries
US$435m
Taxes and royalties
to government
US$196m
Community impact
Community investments: US$14 million
Host community workforce employment: 10,009 people
Host community procurement: US$514 million
Environmental impact
Water withdrawal: 35,247Mℓ
CO2 emissions: 1.75m tonnes
Mining waste: 167 tonnes
Energy usage: 11.2m GJ
Underpinned by:
Fundamental Non-negotiables
Environmental responsibilities
Zero harm
✓
Regulatory compliances
Respect
Innovation
Delivery
Responsibility
7
The Gold Fields Integrated Annual Report 2015 1.5 Gold Fields annual performance
dashboard
Financial
Category
Gold price received (US$/oz)
Revenue (US$m)
Operating profit (US$m)
Headline earnings/(loss) (US$m)
Normalised earnings (US$m)
Capital expenditure (US$m)
Net cash flow (US$m)1
Free cash flow margin (%)
Dividend (SA cents/share)
Total net debt (US$m)
Debt/EBITDA2 ratio
1
2013
1,386
2,906
1,239
(81)
58
739
(235)
N/A
22
1,735
1.50
2015
1,140
2,545
1,089
(28)
45
634
123
8
25
1,380
1.38
2014
1,249
2,869
1,191
27
85
609
235
13
40
1,453
1.30
■
■
■
■
■
■
■
■
■
■
■
■ 2015 Performance drop against 2014 ■ 2015 Performance on par with 2014 ■ 2015 Performance improvement on 2014 or achievement in line
with strategy
2
Business optimisation
Category
TRIFR (rate per million)
Fatalities
Gold produced – attributable (Moz)
All-in Sustaining Cost (US$/oz)
All-in Cost (US$/oz)
Attributable Gold Mineral Resources (Moz)
Attributable Gold Mineral Reserves (Moz)
Attributable Copper Mineral Resources (Mlb)
Attributable Copper Mineral Reserves (Mlb)
Brownfields exploration (US$m)
Brownfields exploration – metres drilled
2015
3.40
43
2.16
1,007
1,026
102.210
46.064
910
532
72
651,189
2014
2013
■
■
■
■
■
■
■
■
■
■
■
4.04
3
2.22
1,053
1,087
108.843
48.123
1,001
620
58
349,511
4.14
2
2.02
1,202
1,312
113.398
48.608
1,119
708
32
250,138
■ 2015 Performance drop against 2014 ■ 2015 Performance on par with 2014 ■ 2015 Performance improvement 2014 or achievement in line
with strategy
1 Net cash flow from operating activities after taking account of net capital expenditure and environmental payments
2 EBITDA – Earnings before interest, taxation, depreciation and amortisation
3 Three of the four fatalities were workplace accidents, while the fourth fatality was a member of the protection services team at South Deep who was shot and killed
during a robbery at the mine
8
The Gold Fields Integrated Annual Report 2015 1.5 Gold Fields annual performance
dashboard
People
Category
Total employees
Contractors
HDSA employees in SA (%)1
Female employees (%)
Employee wages and benefits (US$m)
Ratio of basic salary men to women
Employee turnover (%)
3
2013
10,167
6,685
70
11
595
1.20
10
2015
9,052
7,798
71
14
435
1.09
8
2014
8,954
6,486
71
14
468
1.10
20
■
■
■
■
■
■
■
■ 2015 Performance drop against 2014 ■ 2015 Performance on par with 2014 ■ 2015 Performance improvement on 2014 or achievement in line
with strategy
Licence/Social licence to operate
Category
2015
Total value distribution (US$m)
SED spending (US$m)
Workforce from host communities (%)
In-country procurement (US$bn)
Host community procurement (US$m)
Environmental incidents (Level 3 and above)
Water withdrawal (Mℓ)
Water recycled/reused (Mℓ)
Electricity (MWh)
Diesel (TJ)
CO2 emissions (’000 tonnes)3
Mining waste (’000 tonnes)
Closure costs provisions (US$m)
2,425
13.7
59
1.27
514
5
35,247
43,120
1,322,353
6,930
1,753
167,357
353
4
2014
2013
2,650
17.42
57
1.44
600
4
30,207
42,409
2,980
17.22
–
1.44
430
3
30,302
33,453
1,338,075
1,382,106
6,066
1,694
5,509
1,731
138,522
190,007
391
355
■
■
■
■
■
■
■
■
■
■
■
■
■
■ 2015 Performance drop against 2014 ■ 2015 Performance on par with 2014 ■ 2015 Performance improvement on 2014 or achievement in line
with strategy
1 In terms of the Employment Equity definition, which includes white women as HDSA’s (Historically Disadvantaged South Africans)
2 Restated to include spending from the South Deep Community and Education Trusts
3 Scope 1, 2, 3 emissions
9
The Gold Fields Integrated Annual Report 2015 1.6 Total value distribution
Gold Fields generates significant value for all the societies in which it operates
– some of which can be quantified and some of which cannot. The most
important means by which Gold Fields generates quantifiable value is
outlined below:
National value distribution by region and type 2015
(US$m)
Govern-
ment
Business
Employees/
contractors
Capital
providers
SED
National
value
distribution
Americas
Australia
South Africa
West Africa
Corporate
44
75
11
71
5
175
676
175
628
9
33
8
137
129
112
24
1
42
2
–
4
0
5
14
94
264
889
314
827
131
Total Gold Fields
196
1,663¹
435
14
117
2,425
1 South Deep does not yet pay tax as it is in a loss-making position
2 This includes spending from the South Deep Community and Education Trusts
National value distribution in our four regions
Americas 2015 (US$m)
West Africa 2015 (US$m)
n Government
n Business
n Employees/contractors
n SED
n Capital providers
Total
44
175
33
8
4
264
n Government
n Business
n Employees/contractors
n SED
n Capital providers
Total
71
628
112
2
14
827
South Africa 2015 (US$m)
Australia 2015 (US$m)
n Government
n Business
n Employees/contractors
n SED
n Capital providers
Total
1
175
129
4
5
314
n Government
n Business
n Employees/contractors
n SED
n Capital providers
Total
75
676
137
1
0
889
10
The Gold Fields Integrated Annual Report 2015
Stakeholder value distribution
Government
Business
Employees/
contractors
Socio-economic
development
Capital
providers
Payments include
Payments include
Payments include
Payments include
Payments include
Mining royalties and land-use
payments, Income taxes,
Taxes, duties and levies
related to the procurement of
goods and services. Dividends
Payments to business,
including both operational and
capital procurements
Payments to employees and
contractors, such as wages,
benefits and bonus payments
(including shares and payroll
taxes)
SED spending, including on
infrastructure, health and
wellbeing, education and
training, local environmental
initiatives and donations
Payments to the providers of
capital, including interest and
dividend payments to
shareholders
Why these
stakeholders matter
and what we
contributed in 2015
Why these
stakeholders matter
and what we
contributed in 2015
Why these
stakeholders matter
and what we
contributed in 2015
Why these
stakeholders matter
and what we
contributed in 2015
Why these
stakeholders matter
and what we
contributed in 2015
Governments provide us with
access to ore bodies by
granting mining and other
licences. They also deliver the
infrastructure necessary to
build and maintain our mines,
including roads, electricity
and water supply:
❯ In 2015, we paid
governments
US$196 million (2014:
US$194 million) in taxes
and royalties, 8% of total
value distribution
(2014: 7%)
❯ In addition, the Ghanaian
government received
US$11 million in dividends
relating to its 10%
shareholding in Gold Fields
Ghana
Our supply chain businesses
provide the equipment and
services needed to develop
and maintain our operations:
❯ In 2015, we paid
US$1,663 million to
suppliers and contractors,
representing 69% of total
value creation (2014:
US$1,835 million/69%)
❯ Of the total 2015
procurement expenditure,
US$1,268 million, or 76%,
was spent on businesses
based in operating
countries (2014:
US$1,410 million/76%)
❯ Within this figure,
US$514 million, or 35%,
of procurement was spent
on suppliers and
contractors from host
communities (2014:
US$600 million/39%)
(p110)
The technical skills,
experience, and manpower of
our people drive the
day-to-day operations of our
business, while their
intellectual capital contributes
to our strategy:
❯ In 2015, Gold Fields paid
US$435 million (2014:
US$468 million) to
employees in terms of
salaries, dividends and
benefits, representing
18% of total value
distribution (2014: 18%)
❯ Gold Fields continues to
provide employees (where
legislated) with additional
benefits such as
retirement savings,
healthcare assistance, life
and disability insurance,
housing assistance and
personal accident cover
Host communities are the
source of a large portion of
our workforce and provide us
with our social licence to
operate:
❯ In 2015, we paid out
US$13.7 million (2014:
US$17.4 million) in terms
of SED investment
❯ Independently, the South
Deep Trusts spent
R24.3 million
(US$1.9 million) in 2015
(2014: R10.7 million
(US$1.0 million))
❯ In 2015, 59% of our
workforce were drawn
from host communities
(2014: 57%)
❯ See page 110 for an
analysis of our host
community employment
and procurement as well
as other benefits and
investment in communities
Financial institutions,
shareholders and bond
holders invest with us, thus
enabling us to fund the
development, maintenance
and growth of our operations:
❯ In 2015, Gold Fields paid
US$117 million (2014:
US$137 million) to the
providers of debt and
equity capital, mainly in
the form of interest and
dividends. This made up
5% of our total value
distribution (2014: 5%)
❯ Net debt was reduced by
a further US$73 million to
US$1,380 million during
2015
11
The Gold Fields Integrated Annual Report 2015 1.7 Group performance
scorecard 2015
The Group’s performance for the year under review was measured against
the focus areas shown in this 2015 Group performance scorecard.
Our performance against the objectives is reported in this IAR.
S
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12
The Gold Fields Integrated Annual Report 2015
2
Leadership, governance and
materiality
2.1 Vision of the Chairperson
2.2 CEO Report
2.3 Corporate governance
2.4 Operating context
2.5 Risk and materiality
p14
p16
p31
p39
p42
13
13
The Gold Fields Integrated Annual Report 2015 2.1 Vision of the Chairperson
Being a global company, we deal with a
range of stakeholders across the multiple
jurisdictions in which we operate and
through these engagements we generally
find solutions that are best for our
business and our stakeholders
❯
Cheryl Carolus – Chairperson
The past year has been another
challenging period for the global gold
industry. After peaking around
US$1,300/oz in January 2015, the
US Dollar gold price steadily
decreased through 2015, to end off
the year around the US$1,050/oz
level. Fortunately, our actions in
recent years placed us in a stronger
position to withstand this further fall
in the gold price. In addition, our
globally diversified portfolio has
allowed us to benefit from commodity
currency depreciation against the
US Dollar.
During 2015, we further reduced our
All-in Cost (AIC) to US$1,026/oz,
placing Gold Fields in the bottom half
of the industry cost curve. In 2012 AIC
averaged US$1,537/oz, which means
we have cut costs by one-third in
three years – a remarkable
achievement. This allowed the Group
to generate US$123 million of net
cash flow from operations, which has
enabled us to deliver on our
commitments of paying dividends and
improving the balance sheet.
In 2015, we continued to optimise our
strong international portfolio and
focused on fixing the base at South
Deep. We are pleased to have seen
some early signs of improvement at
South Deep during the second half of
the year. Underpinning this was the
strength of the international
operations, which produced
1.96 million attributable ounces at an
average AIC of below US$950/oz. In
Australia, our biggest region, we
expect the current level of exploration
expenditure to continue in order to
sustain and potentially grow
production. Our strategy towards
growth, which is a preference for
acquisitions of producing assets over
greenfields exploration, remains intact
and we continue to evaluate value-
accretive opportunities.
While we believe in the long-term
value of gold, we must continue our
efforts on modernising all aspects of
our business in order to survive
volatile and ever-changing market
conditions. We commend our CEO,
Nick Holland, on his recent
presentation on The Gold Mine of the
Future, and strongly believe that this
changing mind-set bodes well for the
long-term future of Gold Fields.
Being a global company, we deal
with a range of stakeholders across
the multiple jurisdictions in which we
operate and through these
engagements we generally find
solutions that are best for our
business and our stakeholders.
When it comes to the safety and
wellbeing of Gold Fields’ employees
and contractors there is never a time to
be complacent or rest on our laurels
despite the undoubted progress that
has been made. Tragically four fatalities
occurred during the year – at our South
Deep mine in South Africa and the
Tarkwa mine in Ghana. Three of these
were workplace accidents, the fourth
was a member of our protection
services who was shot and killed
during a robbery at South Deep. My
heartfelt condolences go out, once
again, to the relatives, friends and
colleagues of Kennedy Katongo, Albert
14
The Gold Fields Integrated Annual Report 2015 Chiungo, Sbongiseni Ngqoleka and
Clement Aidoo.
In honour of their memory, and those
who died at our mines before them,
this Board will continue to press
management on the achievement of
Zero Harm at all our operations.
Similarly, reducing the exposure of our
employees to occupational and
non-occupational diseases such as
Silicosis, Tuberculosis, HIV/Aids, Noise
Induced Hearing Loss and Malaria
must remain a priority.
With regards to the high-profile
Silicosis court case, in which Gold
Fields is a co-respondent, it is worth
noting that further significant
progress has been made in
underground dust management and
related work at South Deep over the
past few years. The past year has
been spent with our peer companies
in an intensive engagement process
with all stakeholders to find a
comprehensive solution to the
occupational lung disease challenge
that is both fair to past, present and
future employees, and sustainable to
the companies and the industry.
Stakeholder engagement, beyond
the regular interaction with our
shareholders and investors, is
becoming an increasingly critical issue
and the Board devotes a large amount
of time to ensure that Gold Fields’
management deals appropriately with
the challenges, issues and concerns
of the key stakeholders in our host
governments, amongst our workforce
and in our host communities. During
2015, Gold Fields’ total value
distribution to our stakeholders – as
measured by World Gold Council
(WGC) standards – was almost
US$2.43 billion in the form of
payments to governments, capital
providers, communities, business
suppliers and employees.
Communities adjacent to the mines we
operate grant us our social licence to
operate and increasingly have to be
consulted on mining operations on
their doorsteps. Unfortunately, the
mining industry has not always been
successful in addressing the rightful
aspirations of these communities to
see greater social and economic
benefits from the mines.
This can no longer be the modus
operandi of the industry. We need to
intensify engagement with host
communities, understand their
aspirations and implement strategies
and projects to successfully and
collaboratively meet them without
undermining the economic viability of
our mines. Gold Fields has listened and
is painfully aware of the wide trust gap
that still exists between these
communities and us. In response, we
are implementing a range of initiatives,
in addition to work already ongoing,
ranging from strengthening the
capacity of our community relations
teams to upskilling small businesses in
our host communities for them to be
able to supply goods and services to
our mines.
In addition, we have supported the
ability of the South Deep Trusts as
well as Foundations in Peru, Ghana
and Australia to distribute funds
more effectively to host community
projects. Gold Fields is making
significant strides in putting
community contribution on a more
sustainable footing – but
undoubtedly there is always more
that needs to be done.
Globally, our operations are
confronted by a range of external
regulatory, political, labour and price
dynamics that will impact on their
future business performances. None
more so than those initiated by
governments, which through their
policies, regulations and taxes, have
the ability to create the environment
necessary for businesses to prosper.
The industry around the world is also
facing high electricity tariffs, which
are exacerbated by regular power
outages, as well as water shortages.
This is most acute at our Ghanaian
and South African mines and we
have implemented measures to
improve energy efficiencies and
supply at these operations, as well
as securing ongoing water supplies.
As a committed corporate citizen,
Gold Fields is more than willing to play
its role in addressing these challenges
and find solutions that benefit all
stakeholders. We can only do so if our
stakeholders engage with us in open
dialogue and genuine partnerships
and if additional regulatory, fiscal and
cost imposts, which will be difficult to
absorb by the embattled mining
industry, are avoided. In fact, in some
cases fiscal relief is required to sustain
our industry for the benefit of all
stakeholders.
As directors of this Company one of
our key responsibilities is to ensure
that the corporate governance
systems at Gold Fields are in line
with the ever-changing and more
stringent rules and regulations that
are being rolled out by regulators
across the globe. The Gold Fields
Board is committed to high levels of
corporate governance and statutory
compliance and will review policies
and procedures when required.
In conclusion, I would like to
welcome Steven Reid to the Board.
He joined in February 2016 and
brings with him 35 years of
experience in the mining industry.
I would also like to express my
gratitude to my fellow directors and
executive management, led by our
CEO, Nick Holland. Most importantly,
I want to thank every employee at
Gold Fields for their hard work and
dedication to the Company. They are
integral to its success and it is
thanks to their efforts that
Gold Fields is now in a position to
withstand the low gold price
environment and flourish when the
gold price does start to recover.
Cheryl Carolus
Chairperson
15
The Gold Fields Integrated Annual Report 2015 2.2 CEO Report
Despite the 45% decline in the price of
gold between 2011 and 2015,
Gold Fields is today in much better
shape generating substantially more
cash than when the gold price was at
its peak
❯
Nick Holland – Chief Executive Officer
Dear Shareholders
The global gold mining industry has
operated under the shadow of a
falling gold price since September
2011, when it was trading at a
record high of about US$1,900/oz.
Since then gold has lost about 45% of
its value and traded at an intraday low
of US$1,045/oz on 3 December 2015.
Subsequently, the gold price has
recovered to levels of around
US$1,200/oz. Weaker currencies in
commodity-exporting nations provide
a cushion to the cash flows of
companies operating in these
countries. The weaker Australian Dollar
and South African Rand have improved
the current prospects of Gold Fields
despite lower US Dollar gold prices,
with up to two-thirds of our
production benefiting from the
softer exchange rates.
When Gold Fields started on its
strategic transformation journey in
the final quarter of 2012, the gold
price was still trading between
US$1,700/oz and US$1,800/oz. The
core objective of the transformation
process was to address investor
perception that gold mining
companies, including Gold Fields,
were not providing investors with the
expected leverage to the then
prevailing high gold price. This was
to be achieved by turning Gold Fields
into a lean, focused and globally
diversified gold mining company that
generates substantial free cash flow.
In turn, this would enable Gold Fields
to meet the legitimate expectations
of all of its stakeholders, in particular,
to provide its shareholders with
superior leverage to the price of gold.
Little did we know at the time that
the industry was facing its first year
in the multi-year decline in the price
of gold. What we can say with
certainty is that it has proven
fortuitous that we embarked on our
transformation journey when we did.
Not only was our pre-emptive
restructuring the right thing to do to
start rekindling investor interest and
confidence in Gold Fields and the
gold mining sector generally, but it
provided Gold Fields with a built-in
safety cushion which has enabled us
to withstand the lower gold prices
experienced since then.
The success of our restructuring
journey is reflected in our operational
and financial performance during
2015, the highlights of which are
described below. It also reflects in
the progress that we have made with
our key strategic priorities for 2015,
which were:
❯ Setting up South Deep for
long-term success
❯ Cash flow and margin – making
money at current lower gold prices
❯ Dividends – paying between 25%
and 35% of normalised earnings
❯ Balance sheet – further reducing
our net debt to EBITDA ratio
❯ Growth through brownfields
exploration and opportunistic,
value-accretive acquisitions
It is fair to say that, despite the 45%
decline in the price of gold between
2011 and 2015, Gold Fields is today
in much better shape generating
substantially more cash than when
the gold price was at its peak. While
this is reassuring in the current low
price environment, it also positions
Gold Fields for enhanced cash
generation when the gold price
eventually starts to appreciate again,
which it undoubtedly will.
16
The Gold Fields Integrated Annual Report 2015 The ability to generate cash is critical in distributing the benefits from mining that our stakeholders rightfully expect. These include:
❯ Shareholders and debt providers, who are seeking a return on their invested capital through interest and dividend payments
❯ Our employees, whose work is rewarded through salaries and other benefits
❯ Contractors and suppliers, from whom we procure goods and services
❯ The governments and regulators, who grant us our mining licences and who benefit from our taxes and royalties
❯ Communities, whose support is critical for our social licence to operate and who benefit through jobs and procurement
as well as our social investment programmes
Performance highlights 2015 vs 2014
2015
2014
TRIFR
Attributable production
All-in Sustaining Costs (AISC)
All-in Costs (AIC)
Net cash flow1
Free cash flow (FCF) margin
Net debt
Net debt: EBITDA
Dividends
Total value distribution
Energy spend
Water withdrawal
Total CO2 emissions (Scope 1, 2 and 3)
1 Net cash flow from operating activities after taking account of net capital expenditure and environmental payments
3.40/million hours worked
2.16Moz
US$1,007/oz
US$1,026/oz
US$123 million
8%
US$1,380 million
1.38
R0.25 per share
US$2,425 million
US$312 million
35,247 Mℓ
1,753,163 tonnes
4.04/million hours worked
2.22Moz
US$1,053/oz
US$1,087/oz
US$235 million
13%
US$1,453 million
1.30
R0.40 per share
US$2,650 million
US$367 million
30,207 Mℓ
1,694,043 tonnes
❯ The Group’s Total Recordable
Injury Frequency Rate (TRIFR)
improved by almost 16% to
3.4 recordable injuries per million
hours worked, though this strong
safety performance was
overshadowed by the four fatalities
reported in 2015
❯ Gold Fields recorded a strong
operational performance in 2015
with attributable production of
2.16 million gold equivalent
ounces, broadly in line with guidance
for the full year of 2.17 million ounces
and 3% below the 2.22 million
ounces reported in 2014
❯ Strong cost management across
the Group resulted in an
outstanding cost performance with
AIC of US$1,026/oz being 5%
below guidance for the year of
US$1,075/oz and 6% below the
AIC of US$1,087/oz reported in
2014. If South Deep, which is still
in ramp-up, is stripped out then
the Group’s AIC for the year would
have been US$944/oz (2014:
US$1,020/oz), which
demonstrates the robustness of
the rest of the portfolio
❯ Despite a 9% decline in the
average gold price received from
US$1,249/oz in 2014 to
US$1,140/oz in 2015, net cash
flow from operating activities –
after taking account of net capital
expenditure and environmental
payments – amounted to
US$123 million in 2015 compared
with US$235 million in 2014
❯ The Group’s free cash flow margin
for 2015 was 8% despite the fact
that, at US$1,140/oz the actual
annualised gold price received was
12% below the long-term planning
price of US$1,300/oz. If the price
received for the year was normalised
to US$1,300/oz, then the free cash
flow margin would have been 15%
– in line with our stated target
❯ Normalised earnings for 2015
totalled US$45 million compared
with US$85 million in 2014
❯ As a result of the strong cash
generation during the year, net
debt was reduced by a further
US$73 million to US$1,380 million
(31 December 2014:
US$1,453 million), stabilising the
Group’s net debt to EBITDA ratio
from 1.30 at the end of 2014 to
1.38 at the end of 2015
❯ A final dividend of R0.21 per share
was declared. Together with the
interim dividend of R0.04 per share
for the six months ended 30 June
2015 this brings the total dividend
for the year to R0.25 per share. At
34% of normalised earnings, this is
in line with the Group’s policy to
pay out between 25% – 35% of
normalised earnings as dividends
❯ Gold Fields generated over
US$2.43 billion in value measured
in terms of spending on business
suppliers and contractors,
economic development spending,
wages and salaries, taxes and
royalties as well as interest and
dividend payments to capital
providers. This was slightly below
the total value creation of
US$2.65 billion in 2014, as we
reduced our capital and
operational expenditures
❯ While energy consumption and
water withdrawal increased by 7%
and 17% respectively in 2015 –
with a concomitant rise in carbon
emissions – we also achieved
energy savings of around
US$30 million amid greater
operational energy efficiencies.
Water reuse and recycling
improved by 1.7%
17
The Gold Fields Integrated Annual Report 2015 2.2 CEO report (continued)
Group performance
scorecard
In 2015, Gold Fields adopted a
Group performance scorecard that
incorporated the strategic priorities
listed above and seeks to instil the
right culture and behaviours amongst
our workforce, driven by the strategic
imperative of cash generation by
the business.
By integrating all of the key value
drivers into the business, the
scorecard also aims to enhance the
Group's sustainability. The scorecard
consists of four key performance
areas and elements against which
we measure our performance. The
four key performance areas are:
financial performance; business
optimisation; people; and, our social
licence to operate. A brief overview
of each area, broken down by the
respective elements follows.
a) Financial performance
The first key performance area in
the Group scorecard is financial
performance, as measured by cash
flow generation and debt reduction as
well as improving investor confidence.
The impetus to improve the financial
performance of the Group lies in the
strategic shift introduced in 2012, of
replacing the then industry-wide
prevailing production growth
philosophy, of ounces for the sake of
ounces, with a rigorous new focus
on growing the margin and improving
free cash flow per ounce.
This fundamental shift in strategy is
embodied in our overarching
strategic objective of generating a
15% FCF margin at a gold price of
US$1,300/oz, which has become
the core commercial driver and
guiding principle underpinning
everything we do – from exploration
to production.
Why US$1,300/oz? Because we
believe this is a sensible long-term
price for bullion. The premise is that
when the gold price trades above
US$1,300/oz, the free cash flow
margin will grow commensurately.
Conversely, when prices trade below
US$1,300/oz, as we have seen since
2012, the inclusion of the 15% free
cash flow margin at a gold price of
US$1,300/oz provides Gold Fields with
a safety cushion down to our cash
break-even level of approximately
US$1,050/oz. The bottom-line is that
the Group is focused on cash
generation at all levels of the price cycle
and this drives our strategies, activities
and culture.
The Group’s free cash flow margin
for 2015 was 8% despite the fact
that, at US$1,140/oz, the actual gold
price received was 12% below the
long-term planning price of
US$1,300/oz.
Net cash flow
Gold Fields today is in much better
shape than it was in 2012, when
measured by net cash flow (cash flow
from operating activities after taking
account of net capital expenditure and
environmental payments). Despite the
31% decline in the average annual
price of gold between 2012 and 2015,
Gold Fields’ ability to generate cash
has improved substantially. During
2015 this was also aided by the
weakening of the South African Rand
and the Australian Dollar against the
US Dollar.
❯ In 2012 Gold Fields (then including
Sibanye Gold) had negative net
cash flow of US$280 million
despite an all-time high average
gold price for the year of
US$1,656/oz
❯ In 2013, the first full year of the
transformation process, Gold Fields
reduced its negative net cash flow
to US$235 million despite a 16%
decline in the average gold price to
US$1,386/oz during the year and
incurring restructuring costs
❯ In 2014, Gold Fields generated
US$235 million of net cash, a
positive swing of US$470 million,
despite the average gold price
received once again falling by
10% to US$1,249/oz for the year.
The Group’s free cash flow
margin improved to a positive
margin of 13%
❯ In 2015, Gold Fields generated
US$123 million of net cash despite
the average gold price received
again declining – by 9% – to
US$1,140/oz. The free cash flow
margin was 8% for the year
Cost reductions amid lower gold price
and stable production
Strong focus on cash generation (net cash flow1)
(Ounces)
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
(US$/oz)
(US$m)
1,600
1,400
1,200
1,000
800
600
400
200
0
250
150
50
0
(50)
(150)
(250)
) 4
9
2
2
(
)
5
4
(
8
3
4
5
5
6
3
6
4
5
0
) 3
9
2
(
5
7
7
4
(US$/oz)
2,000
1,500
1,000
500
0
(500)
(1,000)
(1,500)
(2,000)
Q1
Q2 Q3
2013
Q4 Q1
Attributable gold production
(ounces)
Q4
Q2 Q3
2014
Gold price
(US$/oz)
Q1
Q2 Q3
2015
All-in Costs
(US$/oz)
Q4
Q1
Q2 Q3
2013
Q4 Q1
Q2 Q3
2014
Q4
Q1
Q2 Q3
2015
Q4
Net cash flow
(US$m)
Gold price
(US$/oz)
1 Net cash flow from operating activities after taking account of net capital
expenditure and environmental payments
18
The Gold Fields Integrated Annual Report 2015
Focus on cost
Central to our ability to generate free
cash flow is a commitment to
aggressive cost management. This
continued to be reflected in the 6%
reduction in AIC during 2015, which
brings the cumulative reduction in
our AIC since 2012 to 33% in
nominal terms.
During 2015, we were also able to
beat our cost guidance. Our original
guidance for AISC and AIC for 2015
was US$1,055/oz and US$1,075/oz
respectively, while our actual costs
for the year were US$1,007/oz and
US$1,026/oz respectively, an
improvement of 5% each on
guidance.
While the bulk of the cost reduction
initiatives were implemented during
2013 and 2014, as described in our
2014 Integrated Annual Report (IAR),
we continue to revisit every aspect of
our operations to ensure the
sustainability of previously captured
cost reductions, and to ensure that
new opportunities for cost reductions
are achieved. Amid the continued
decline in the gold price in 2015 our
focus shifted to reducing cash costs
and trimming non-essential capital
and we were careful not to cut our
sustaining and growth capital
expenditure critical to maintaining the
long-term integrity of our ore bodies.
Over the past three years our total
annual capital expenditure was
US$739 million in 2013,
US$609 million in 2014 and
US$634 million in 2015.
It is worth recalling the core elements
of our cost reduction programme
implemented between 2013 and
2015. They included the following:
❯ Trimming costs through elimination
of inefficiencies and productivity
improvements
❯ The elimination of marginal mining
at all of our operations
❯ The restructuring of all of our
corporate, regional and operational
structures
❯ The stabilisation of our workforce
at 9,052 employees and 7,798
contractors
❯ The ongoing rationalisation and
prioritisation of capital expenditure
and, where appropriate, the
deferral of capital investment
without negatively impacting the
short, medium and long-term
sustainability of our mines
❯ The cancellation of near-mine and
greenfields growth projects that
demonstrated inadequate returns
❯ The closure of the Group’s
greenfields exploration and project
development division and, where
appropriate, the sale of projects in
the project pipeline
A key driver in reducing the Group’s
AISC and AIC is the South Deep
mine in South Africa, which is still in
build-up and not yet at steady-state
levels of production. If South Deep is
excluded from the Group’s AISC and
AIC for 2015, then the AISC and AIC
would have been US$930/oz and
US$944/oz respectively, placing
Gold Fields among the lowest-cost
gold producers worldwide. The
objective is for South Deep to reach
cash break-even by the end of 2016.
Debt reduction
Gold Fields has long maintained the
position that its debt comfort zone is
approximately 1.0 times net debt to
EBITDA (Earnings before interest,
taxes, royalties, depreciation and
amortisation). Following the
unbundling of Sibanye Gold and the
acquisition of the Yilgarn South assets
in 2013, this ratio increased to
approximately 1.5 times at the end of
2013. During 2015, net debt was
reduced by US$73 million to
US$1,380 million by the end of the
year on the back of lowering the debt
by US$282 million during 2014. The
net debt to EBITDA ratio at end-2015
was 1.38 compared with 1.30 at the
end of 2014. Although debt was again
reduced in 2015, the lower gold price
more than offset these gains on the
net debt to EBITDA ratio.
In March 2016, Gold Fields
successfully completed a R2.3 billion
(US$150 million) equity raising by
way of a private placement of an
additional 5% of its shares to
institutional investors. The equity
raising was significantly
oversubscribed and the proceeds
were used to fund the February 2016
buy-back of US$148 million of the
US$1 billion 2020 bond.
The effect of these transactions will be
a reduction in the net debt to EBITDA
ratio from 1.38x as at 31 December
2015 to 1.21x, which gets Gold Fields
closer to achieving one of its key
strategic objectives of a net debt to
EBITDA ratio of 1.0x (p57). The
repayment of debt, together with
dividend payments, will remain the top
financial priority for the Company.
Improving investor confidence
In Gold Fields’ 2014 IAR, the Group
published its Investor Charter for the
first time. The Charter embodies
three core commitments aimed at
regaining and growing investor
confidence in Gold Fields:
❯ To build a quality portfolio of
productive mines
❯ To provide superior returns
❯ To deliver on our promises
Gold Fields’ portfolio has undergone a
fundamental change since 2013. We
spun off the Sibanye Gold assets to
shareholders, eliminated marginal
mining as a practice at all of our assets,
stopped all projects in our growth
pipeline that did not provide an
adequate return and, in October 2013,
acquired the Yilgarn South assets in
Western Australia from Barrick Gold.
The latter deal has proved a model for
the kind of value-accretive acquisition
we are seeking in future, as we
managed to pay off the US$262 million
consideration for the three mines in Q3
2015, two years after the acquisition.
The portfolio of operating assets is
consistently reviewed in line with our
portfolio management strategy (p76).
During 2016, we expect to decide
the long-term future of our Damang
mine in Ghana and Darlot mine in
Australia.
As mentioned before, we have
reduced the AIC by 33% over that
period while turning around the cash
flow position of the Group with net
cash generated of US$235 million in
19
The Gold Fields Integrated Annual Report 2015 2.2 CEO report (continued)
2014 and US$123 million in 2015,
despite significant declines in the
gold price received.
Gold Fields has also made significant
progress in its ability to deliver on its
guidance and has, since 2013,
consistently met or exceeded its
Group production and cost guidance.
One operating asset in the Gold
Fields Group that still has to be
brought to account fully is the South
Deep mine in South Africa. Here
we are targeting cash breakeven by
the end of 2016 with long-term
production metrics to be published
early in 2017.
During 2015, we made considerable
progress in ‘getting the basics right’
at South Deep with improvements in
the three key performance areas that
we are focusing on: people, fleet
and mining methodologies. As a
result, the production and cash burn
position of the project have improved
markedly through the second half
of 2015.
We certainly believe that we have put
the building blocks in place to restore
the confidence of our large shareholder
base and attract the long-term
investors that seek value and long-term
leverage to the gold price.
b) Business optimisation
Underpinning the financial
performance of the business is Gold
Fields’ commitment to running its
operations safely, efficiently and
cost-effectively without undermining
the long-term sustainability of our
mines. We measure the success of
business optimisation by looking at
our progress on safety and wellness;
the performance of our portfolio of
assets; the implementation of our
growth strategy and setting up the
South Deep mine for long-term
success.
Safety and wellness
Safety is management’s first priority in
running our operations, and it is critical
that we continuously emphasise that
our first value is ‘if we cannot mine
20
safely we will not mine’. Nevertheless,
we reported three mining-related
fatalities and one fatal shooting during
2015 and my condolences once again
go out to the families, friends and
colleagues of the deceased.
Three fatalities occurred at the South
Deep mine in South Africa and one
at the Tarkwa mine in Ghana:
❯ In March, Kennedy Katongo, a
boilermaker, was injured at a
station tip. He succumbed to his
injuries in hospital three days later
❯ Alberto Chiungo, a contracted
locomotive operator, was fatally
wounded in May, when he was
caught between the loco and a
hopper during tramming
operations
❯ In August, Sbongiseni Ngqoleka, a
security contractor, was shot and
killed by armed robbers targeting
copper cables at South Deep. Two
other security personnel were
injured in the same attack
❯ In December, a spotter at Tarkwa,
Clement Aidoo, was struck and
fatally injured by a truck when it
reversed after dumping its load of
material
South Deep’s two fatal mine
accidents and another serious
accident at the mine led to Section
54 orders being issued by the
Department of Mineral Resources,
placing a moratorium on mine-
related activities across the mine and
effectively stopping production for
a total of about 18 days. We fully
support these orders and during
the year also conducted a
comprehensive mine-wide review of
all safety protocols, procedures and
standards at South Deep in line
with the mandate to improve
the mechanised mining culture
at the project. Many of the
recommendations arising from
the review have already been
implemented and are having a visible
impact on our safety performance.
The fatal accident at Tarkwa, the first
at our Ghanaian operations in almost
four years, has also led to a review of
truck loading and driving procedures.
The fatalities were an undoubted
setback on our path to Zero Harm.
However, our TRIFR continued to
improve during 2015 – by almost 16%
to 3.4 recordable incidents per million
hours worked – demonstrating that
the numerous regional safety
programmes being implemented are
yielding positive results.
The Group has also intensified
operation-specific health and wellness
programmes, focusing on improving
the physical and mental health of our
employees. These are having a
significant impact as the 53% decline
in Noise Induced Hearing Loss
submissions and the 40% reduction
in the number of Silicosis cases
submitted last year illustrates.
Quality portfolio of assets
In 2015, Gold Fields consolidated its
position as a focused, leaner business
by pro-actively managing its portfolio
of operating and growth assets. This
active portfolio management
approach requires an ongoing
strategic review of all existing assets
as well as potential acquisition targets
against our strategic imperatives. The
aim is to improve the quality of our
overall portfolio measured by the
improvement in cash generation and
sustainability of operations. It implies
that we are prepared to trade existing
assets for better, new assets.
The most obvious manifestation of
this was the 2013 unbundling of the
Group’s conventional, deep-level
underground mines in South Africa
to create Sibanye Gold and the
subsequent acquisition of Barrick
Gold’s Yilgarn South assets in
Western Australia. Gold Fields’
portfolio is now characterised by
modern, fully mechanised open-pit
and underground mining, with
diversified production spread across
three continents.
In this context, Gold Fields continued
to focus on improving the cash-
generation performance of its
The Gold Fields Integrated Annual Report 2015 existing operations. During 2015, this
included:
❯ Protecting the commercial
sustainability of its mines by
avoiding high-grading and
stripping and investing in ore
development on an ongoing basis
❯ Brownfields exploration for
life-of-mine extensions
❯ Production and strategic planning
based on the delivery of a 15%
free cash flow margin at a gold
price of US$1,300/oz
To ensure that our business has a
strong future, we have made
continued exploration and
development of our mines’
underground and surface ore bodies a
strategic priority. These are among the
last activities we would cut, even in a
sustained low gold price environment
and costs associated with maintaining
the integrity of our ore bodies is built
into the mines’ cash-flow models.
Should gold prices go down to levels
of around US$1,000/oz or lower for a
sustained period of time, we would
need to look at a new operating and
planning protocol at these lower
prices to protect the integrity of our
ore bodies.
Growth
Growth at Gold Fields is not just a
matter of increasing the Group’s
Mineral Resources and Mineral
Reserves or boosting the production
profile. It is about growing cash flow
per ounce and per share in the
medium and long term. Since 2013,
this has resulted in:
❯ The cessation of all early
greenfields exploration activity
❯ Refocusing from greenfields
exploration to lower risk, near-mine
exploration to improve the quality
of ore feed and provide longevity
to our operations
❯ Disposing of growth projects that
are marginal, located in higher-risk
locations and/or are primarily
focused on metals other than gold
❯ Focusing on portfolio-enhancing,
value-accretive acquisitions
Gold Fields believes that at the
current point in the price cycle
near-mine exploration offers the best
route to low-cost ounce replacement
that can generate cash in the short
and medium term at our Australian
operations, which have a history of
reserve replacement. In 2015, Gold
Fields raised its total near-mine
exploration expenditure by 20% to
US$72 million, on top of the
US$60 million and US$32 million
spent in 2014 and 2013 respectively,
in pursuit of this strategy. Much of
this activity was focused on the
Australia region, where the mines in
the Gold Fields portfolio spent
A$91 million (US$69 million) in 2015.
This builds on the A$64 million
(US$58 million) spent in 2014 and
A$34 million (US$32 million) in 2013.
To build on the work undertaken in
2015 we have budgeted A$86 million
(US$63 million) for 2016.
This is part of a multi-year strategy to
both replace and increase reserves
and resources at the operations in
Australia. In addition to exploration
drilling to extend current ore bodies,
activity was also focused on
developing early-stage generative
targets on the prospective leases.
Some successes can be recorded:
❯ St Ives’ Invincible mine has already
produced over 131,000 ounces
❯ Work at Agnew has shown good
potential at the Cinderella and FBH
ore bodies
❯ Exploration at Granny Smith has
indicated further mineralisation at
depth at the existing Wallaby
underground mine
❯ Multiple targets have been
identified across the lease at Darlot
but more work needs to be done
to scope these ore bodies
At our Damang mine in Ghana, work
is continuing to evaluate the long-
term growth potential of the mine.
The mine has a good ore body at
depth under the original pit that will
require a push-back to expose.
We expect to announce a decision
by mid-2016.
In 2015 we continued the disposal of
projects that are not aligned with our
Group objectives: the Woodjam
project in Canada was sold, while
the Arctic Platinum project in Finland
remains earmarked for sale.
We continue to drill our Salares Norte
project in northern Chile to assess its
longer-term potential.
The Far Southeast project in the
Philippines has also been retained
in our portfolio and we maintain
optionality on this project.
Gold Fields is also open to the
possibility of further value-accretive
transactions similar to our acquisition
of the Yilgarn South assets in 2013.
South Deep
After a difficult 2014 and the
introduction of a new management
team, we took the decision at the
start of 2015 to take a step back and
‘get the basics right’ at South Deep
to ensure a stronger foundation for
sustainable growth in the future. The
first six months of the year came with
its own challenges as the new
management team adopted a
strategy of embedding an improved
safety and productivity culture as it
set the mine up for the long-term.
However, the second half of the year
showed some early encouraging
indicators of improvement.
Production in the second half was
64% higher at 123,000 ounces
than in the first half, with total
production for the year coming
in at 198,000 ounces (2014:
200,500 ounces). In Q4, aided in
part by the rising Rand gold price,
the cash outflow from the project
was limited to R57 million down
from R266 million in Q3.
21
The Gold Fields Integrated Annual Report 2015 2.2 CEO report (continued)
We remain committed to our target
of achieving a breakeven cash
position by the end of 2016. Further,
Gold Fields will provide an updated
production ramp-up schedule early
in 2017, once our ‘back to basics’
programme has had more time to
be bedded down.
The three main focus areas at South
Deep have been:
People: To augment the current
skills base, South Deep recruited an
additional 164 skilled employees
during 2015, mostly from the
platinum sector, which has a similar
mechanised mining skills set. The
recruitment of identified critical skills
was 98% completed by the end of
2015. Importantly, most of the core
mining and engineering positions
have now been filled. This has been
supported by intensified training
programmes for our existing staff,
backed by the signing of a three-year
wage deal with trade unions in
March 2015. This will govern wages
and other working conditions until
March 2018 and should give South
Deep a degree of labour stability as
the mine builds up.
Fleet: During 2015, the South Deep
machinery and vehicle fleet were
optimised and a total of 24
Category 1 machines were delivered
to the mine during the year, with all
machines, except one,
commissioned before year-end.
An additional 24 machines will be
acquired during 2016. These fleet
acquisitions will mean that South
Deep would have replaced more
than half of its fleet by the end of
2016, which should have a positive
impact on availability and utilisation.
The maintenance capacity at South
Deep improved during the year
through the implementation of
supplier maintenance contracts in
corridor 2 (approximately 35% of
total mining), as well as the
commissioning of the 93 level
workshop.
Mining method: During 2014 and
2015, South Deep management, in
collaboration with a team of leading
international and local geotechnical
22
experts, reviewed the de-stress
mining method. A strategic mine
design change in the de-stress
methodology and a conversion from
low profile (2.5 metres vertical height)
to high profile (5.0 metres vertical
height) de-stress mining commenced
in the September quarter. By
year-end about 70% of the mine was
employing this approach, which,
even at this early stage, has already
contributed to simplifying and
derisking the mining process. The
transition to high profile de-stress is
expected to continue until the early
part of 2018.
c) People
The profile of our workforce was
profoundly impacted during the initial
years of our transformation journey
(2012 – 2014) with large-scale
reductions in the number of
employees and contractors.
However, since then, our human
resource base has stabilised with
9,052 employees and
7,798 contractors on our books
at the end of 2015.
With the shift towards mechanisation
and automation, we have found that
in addition to the continued
development and training of our
workforce, it is also important to
recruit the appropriate skills at our
mines. At South Deep in 2015 we
employed an additional
164 mechanised mining skills.
However, our strategy remains to
grow our own people through
focused internal training efforts.
During 2015, we spent over
US$12.4 million globally on training
and development – on top of
recruiting the best mining skills to
supplement the existing talent pool.
Since the restructuring, our smaller,
yet more skilled, workforce has
ensured that Gold Fields works more
efficiently to improve productivities.
The key to this is that employees are
incentivised to deliver against clearly
defined performance targets that
directly support the achievement of
business objectives.
Our remuneration strategy is evolving
to attract and retain these skills, and
our people development approach is
being adjusted to ensure we build a
robust internal skills pipeline that can
supply the skills that the business
needs, now and in the future.
Furthermore, we continue to
entrench a high-performance culture
that encourages people to meet and
exceed their performance targets.
Finally, employees need a work
environment that supports optimal
functioning and ensures they are
safe, healthy, balanced and
productive.
The People strategy is reflected in our
Group scorecard objectives for 2015:
❯ Training, development and talent
management
❯ Employee engagement
❯ Performance management
A large portion of our workforce
in Ghana and South Africa is
represented by a number of trade
unions. We successfully engaged
with these trade unions during 2015
and concluded wage deals in both
countries. In South Africa we opted
out of the centralised wage
negotiations and moved to
company-level negotiations to reflect
the different skills set at South Deep.
In April, we signed a three-year
comprehensive wage deal that
recognises the mechanised mining
requirements of the project as we
take South Deep to full production.
In Ghana, talks with the trade unions
continued into 2016. A deal was
concluded in Q1 2016, which
resulted in employees in Ghana
receiving a back-dated 5% salary
increase for 2015.
d) Social licence to operate
Despite a third year of adverse
market conditions in 2015,
Gold Fields continued to distribute
value to a wide range of
stakeholders, including employees,
host governments, host
communities, businesses and
suppliers as well as the providers
of risk capital.
In 2015, our total value distribution
– reported according to World
Gold Council methodology –
was US$2.43 billion
(2014: US$2.65 billion), with 69%
going to businesses and suppliers
The Gold Fields Integrated Annual Report 2015 (2014: 69%), 8% to governments
(2014: 7%), 18% to employees
(2014: 18%), 5% to capital providers
(2014: 5%) and 0.5% on socio-
economic development programmes
(2014: 1%) – mostly in host
communities. The slight decline in
the overall value distribution was
largely due to a cutback in spending
with business suppliers and partners
amid lower operational expenditures.
The success of our business is critically
dependent on the relationship with a
number of key external stakeholders
that determine both our regulatory and
our social licences to operate:
governments at national, regional and
local level and, above all, the
communities that host our mines.
These stakeholders determine both our
regulatory licence and social licence to
operate, and we therefore devote
considerable resources and energies in
securing and maintaining these
licences. This is not merely a
compliance-based approach but one
that seeks to ensure that we win the
long-term support of governments and
communities through the sustainable
development of our mines and
projects.
A number of elements are critical in
achieving the support of these
stakeholders: improved community
relations and the related development
of Shared Value projects and other
investment projects in these
communities, as well as the
responsible management of
environmental resources, particularly
water. These resources, if not
managed sustainably, can have an
adverse impact on the environment
or create social tensions with host
communities, thus threatening our
licences to operate.
Improved community relations
The communities in which we
operate are directly and often
exclusively dependent on the
sustainability and growth of our
mines. One of the biggest challenges
facing mining companies is building
relationships and trust with these
host communities, without which
there is potential for operational
disruption, project delays and
cancellations.
It takes substantial time, effort and
resources to establish and maintain a
strong social licence to operate.
Increasingly, our ability to grow
Gold Fields through the expansion of
existing mines and the development
of new projects is determined by our
ability to build strong relationships
and trust with communities in our
operating areas.
Gold Fields has invested heavily in
communities through social
investment projects and, more
recently, through Shared Value
projects (see p118). However, it is
evident that mining companies need
to expand and deepen their
investment in and engagement with
host communities, who have found
their voice and are rightfully seeking a
greater share of the benefits of mining.
In response Gold Fields has
implemented a range of initiatives, in
addition to the work already being
done, including:
❯ Boosting the capacity of our
community relations teams
❯ Working with peer companies to
jointly address community needs,
such as the alliance with Sibanye
Gold in the Westonaria
municipality, home to our South
Deep mine in South Africa
❯ Supporting the ability of the South
Deep Trusts as well as foundations
in Peru, Ghana and Australia to
deliver benefits to host
communities more effectively
❯ Expanding the quantity and quality
of Shared Value projects
At South Deep in particular, we have
intensified our community investment
work after we commissioned
independent surveys among our host
communities in Westonaria, which
revealed a significant relationship gap
between the mine and these
communities.
Based on these findings, South
Deep has strengthened and
restructured its community relations
and stakeholder engagement
capacity. At the same time, the
community investment programmes
are increasingly focused on sourcing
goods and services from enterprises
in these communities and increasing
local employment opportunities. This
will require a significant investment in
training and skills development, but
is an investment that is essential for
our long-term sustainability.
Host community procurement and
employment are critical pillars of our
community investment strategies at all
our operations in developing countries.
At present host community
employment accounts for 29% of our
workforce in Peru, 50% at South Deep
and 67% at our Ghanaian operations.
The respective numbers for host
community procurement spend are
7%, 10% and 9% respectively. In
Australia 90% of our workforce and
66% of procurement is from Western
Australia, which is classified as the
host region. Gold Fields will continue
to look at ways to increase local
employment and procurement
opportunities in 2016.
Shared Value
Our contribution to host communities
is on a more sustainable footing now
that we have implemented the
Shared Value approach to structure
part of our investments in community
projects with a focus on social and
economic benefits rather than just
social spend. We are gaining
valuable experience with each
project that we are undertaking.
To date, our regions have
implemented five Shared Value
projects ranging from the promotion
of mathematics and science
education among South Deep’s host
communities to multilateral water
management projects at Cerro
Corona and increased sourcing from
community suppliers at all our mines.
Our Ghanaian mines are working
with government to build a tar road
to connect our two mines and
adjacent communities.
Reducing energy and carbon
emissions
Energy remains a major performance
driver at 22% of Group operating
costs in 2015, having risen from 18%
in 2013, amid increasing energy
demand and supply constraints in all
of our operating regions. Unless we
act to find more cost effective and
alternative energy sources, this trend
23
The Gold Fields Integrated Annual Report 2015 2.2 CEO report (continued)
will continue in future. As part of the
Integrated Energy and Carbon
Management strategy, implemented
in 2013, each of our regions has set
energy reduction targets, which
have already delivered around
US$30 million in cumulative savings
from 2013 to 2015 (against plans).
This equates to energy savings of
around 7% against our business
plans over the period and had the
additional benefit of leading to 9%
savings in our CO2-equivalent
emissions.
At the same time, the regions have
been tasked with securing access to
future energy sources. In Ghana,
where our mines were asked by the
government to reduce their electricity
consumption by 25% – 30% during
2015, the operations have reached
an agreement with a private utility
that will deliver the bulk of their
energy requirements within the next
two years. In Peru and Australia, new
long-term supply agreements have
been signed with utilities.
While South Deep has a long-
standing agreement with the
state-owned utility to implement
load-curtailment programmes, we
have solicited proposals for an
on-site 40MW photovoltaic solar
plant. Other non-carbon energy
projects we are developing include a
gas plant at our Granny Smith mine
in Australia to replace the diesel
power station. We also remain
committed to our goal of 20%
renewable energy generation at all
new projects. Greater use of
renewables creates power price and
supply stability and has the added
benefit of reducing our carbon
footprint, which is one of Gold Fields’
key environmental priorities.
Enhanced water management
Responsible water management
remains a vital component of
Gold Fields’ licence to operate and
social licence at all our operations
and projects as water is becoming
an increasingly scarce and expensive
commodity globally. Managing the
risks around current and anticipated
water security, which includes the
quantity and quality of supply as well
as associated costs, is essential to
24
ensure sustainable production for
existing operations and the future
viability of projects.
The Group water management
guideline, implemented in 2014,
focused on water stewardship,
including identifying opportunities to
enhance water reuse, recycling and
conservation practices at all
operations. In 2015, the operations
focused on identifying projects to
support these objectives and by
year-end a total of 20 initiatives were
listed, such as the use of in-pit tailings
at our St Ives and Tarkwa mines. A
number of these initiatives are already
being implemented and they are
expected to deliver multiple benefits.
These include cost savings, reduced
impact in water scarce areas,
improved regulatory compliance,
identification and mitigation of
water-related risks, reduction of mine
closure liabilities and enhancing
Gold Fields’ social licence to operate.
Operational overview
Australia
During 2015, the Group’s four mines
in Western Australia – St Ives, Agnew,
Darlot and Granny Smith – collectively
delivered a strong operational
performance, with gold production of
988,000 ounces at an AIC of
A$1,211/oz (US$912/oz), which was
in line with full year guidance for the
region of 983,000 ounces at an AIC
of A$1,210/oz (US$965/oz). AIC in
2014 was A$1,124/oz (US$1,015/oz).
Compared to 2014, production
decreased by 4% from
1,031,000 ounces mainly as a result
of planned lower production from
Granny Smith, Agnew and Darlot,
offset by higher production from
St Ives. Both St Ives and Granny
Smith exceeded their guidance for
the year, compensating for Darlot and
Agnew, both of which did not achieve
their guidance.
Net operating costs in the region
decreased by 7% from A$799 million
(US$721 million) to A$747 million
(US$562 million), mainly due to good
cost control, while capital expenditure
increased from A$304 million
(US$274 million) to A$373 million
(US$281 million) mainly as a result
of the opening up and development
of new ore sources at the various
mines as well as higher expenditure
on near-mine exploration across the
region.
The region reported net cash inflow
of A$338 million (US$255 million)
during 2015.
Ghana
Gold Fields’ two mines in Ghana,
Tarkwa and Damang, produced a
strong operational performance in
2015 with total managed gold
production of 753,900 ounces which
was 2% higher than the 736,000
ounces produced in 2014.
Strong cost management ensured a
7% decrease in net operating costs
from US$551 million in 2014 to
US$513 million in 2015, while capital
expenditure increased from
US$190 million in 2014 to
US$221 million in 2015. As a
consequence, AIC for the region of
US$1,049/oz was 4% better than
the US$1,094/oz reported in 2014
and 13% ahead of guidance.
The aggregate performance of the
region was outstanding, underpinned
by the strong showing of Tarkwa and
despite the significant operational
challenges faced by Damang. The
region as a whole reported net cash
inflow of US$44 million during 2015
of which Tarkwa contributed
US$76 million while Damang had a
negative cash flow of US$32 million
for the year.
Damang's reduced output and
higher costs have prompted
Gold Fields to evaluate various future
options for the mine. We expect to
complete this work before the middle
of 2016 and announce a decision on
the mine's future then.
Peru
Despite the significant decline in the
price of copper during 2015, Cerro
Corona in Peru recorded a relatively
good performance with total
managed gold equivalent production
of 295,600 ounces in 2015, 6%
ahead of guidance. However, it was
9% lower than the 326,600 ounces
The Gold Fields Integrated Annual Report 2015 produced in 2014, as a result of the
lower copper price and a planned
decline in gold and copper grades.
Net operating costs decreased by
9% from US$158 million in 2014 to
US$145 million in 2015, mainly due
to good cost management and
lower ore tonnes mined, while
capital expenditure increased from
US$51 million in 2014 to
US$65 million in 2015. The region
reported net cash inflow of
US$35 million during 2015.
Total AIC amounted to US$718/oz in
2015 compared with US$316/oz in
2014 due to lower gold sold, lower
by-product credits and higher capital
expenditure, partially offset by lower net
operating costs. On a gold equivalent
only basis AIC rose from US$702/oz in
2014 to US$777/oz in 2015.
South Africa
At the South Deep mine production
remained steady during 2015 with
production of 198,000 ounces
compared with 200,500 ounces in
2014, mainly due to lower grades,
partially offset by increased volumes.
Higher wage hikes and rises in other
operating costs led to net operating
costs increasing by 13% from
R2.66 billion (US$246 million) in 2014
to R3 billion (US$237 million) in 2015.
Capital expenditure at South Deep
decreased from R994 million
(US$92 million) in 2014 to
R848 million (US$67 million) in 2015.
AIC of R635,622/kg (US$1,559/oz)
in 2015 compared with AIC of
R602,363/kg (US$1,732/oz) in 2014
due to lower gold sold and higher
operating costs, partially offset by
lower capital expenditure.
South Deep’s net cash outflow
reduced sharply from US$116 million
in 2014 to US$80 million in 2015.
Progress on the re-basing of the
South Deep mine can be found on
pages 21 and 73.
Stakeholder relations
Gold Fields’ prosperity in the short
and longer term is – as I have stated
before – critically dependent on
societal acceptance. This can only be
achieved through transparent and
mutually beneficial relationships with
governments at all levels (national,
regional and local), organised labour
and host communities, who might
disrupt our operations. Our corporate
and regional management teams have
been tasked with intensifying
stakeholder engagements in 2016 to
ensure that we operate in a business
environment that allows us to operate
profitably to the benefit of these
stakeholders and others. As part of
this, we have completed an extensive
relationship assessment exercise at
South Deep and are starting this
progress in Ghana and Peru in 2016.
The appeal to governments is
particularly urgent in South Africa
and Ghana, where pending
legislation and regulations have the
potential to adversely affect the
mining sector. In Peru, poor relations
with communities and activists are
threatening the growth of the entire
mining sector and all stakeholders
need to work together to address
these challenges.
In South Africa, Gold Fields has
dedicated substantial human and
capital resources towards meeting
the targets of the 2010 Mining
Charter, including the equity
empowerment target of 26%
ownership. We will commit similar
resources in achieving the continued
transformation of the sector to make
South Deep truly representative of
the South African population.
True transformation will take time and
cannot happen without the financial
backing of investors, many of whom
have fled the sector over the past
few years amid poor returns on their
capital. We welcome the South
African government’s commitment to
engaging with the sector openly and
honestly through Project Phakisa to
devise an action plan for further
growth and transformation that
encourages renewed investment
in the industry.
However, as it drafts critical policy
based on these engagements we
urge government to avoid additional
fiscal or regulatory burdens that will
inevitably further stifle the growth of
the sector. Directly, and through the
Chamber of Mines, we are engaging
the South African government on
three key issues in 2016: the review
of the Mining Charter; the once-
empowered, always-empowered
principle in Black Economic
Empowerment ownership of mining
companies; and, the finalisation of
amendments to the Mineral and
Petroleum Resources Development
Act.
In Ghana, our appeal to government
is to finalise and implement the
long-awaited investment agreement
that is critical for Gold Fields to
achieve a level investment playing
field with its peers in the country.
Other investments in the sector
would also be supported by a
level playing field and without it, we
fear, the much-needed economic
growth linked to mining in Ghana
will not occur.
In Peru, the mining industry is
working closely with government to
find joint solutions to the social and
environmental issues that appear to
be the root causes for the distrust
towards the sector by communities.
Engagement with these communities
and their representative organisations
will have to be the critical next step.
I would like to reiterate a commitment
I have made on a number of
occasions. For the mining sector to
benefit all its stakeholders we have to
work in partnership to grow the
mining economy – to expand, not
shrink, the ‘mining pie’. Distributing
smaller slices of a shrinking mining
pie will inevitably lead to a gradual
decline in the industry.
Strategic priorities and
guidance for 2016
The 2016 Group scorecard is
displayed on the next page.
The pillars of Gold Fields strategy are
firmly in place and have successfully
guided the transformation of the
Group over the past three years. We
do not envisage major changes to
this strategy in the year ahead,
though there has been a shift in
emphasis in some of the key
performance areas, which has led to
an adjustment to some of the
measurements.
25
The Gold Fields Integrated Annual Report 2015 2.2 CEO report (continued)
Group scorecard
Debt reduction
Continue to use cash
generation to pay off net debt
Creating and sustaining
Shared value
Develop three-year
procurement and local
employment plans for
South Africa, Ghana and
Peru
Improved
community relations
Develop and implement
community engagement
strategies in each region
Mine closure and
water management
Put integrated post-
closure water
management plans
in place in all regions
Manage climate
change risk
Undertake a risk-based
gap analysis to further assess
operational vulnerability to
climate change
Improve quality and growth
of our asset portfolio
Grow mineable resources that
maintain growth in FCF/oz and the
average reserve life per operation
through exploration and portfolio
management (acquisition, joint
venture and/or disposal)
Energy cost management
Implement action plans as
detailed in the 2015 energy
security plan and upgrade
energy efficiency plans
26
Sustainable free
cash flow margin
Meet production
and cost guidance
Financial
Social
licence to
operate
People
Business
optimisation
Technology and
innovation
Design a technology
strategy for each region
with a three-year
implementation plan
Improved investor and
analyst confidence
Position our share price
above the median of our peer
group
Performance
management
Measure, incentivise and
motivate employees to
deliver high-performance
results
Improved talent
management
Ensure the right people
in the right jobs at the
right time and deliver
effective training
programmes for the
appropriate supply of
skills
Communication
and engagement
Improve engagement
by implementing a
two-way
communication
platform
Improved talent and
management skills
Create strong people
managers who are able to
attract, motivate and
manage a diverse
workforce
Create a condusive
work environment
Review the Employee
Value Proposition for each
region
Rebase South Deep
to deliver
Achieve a cash neutral or cash
positive position by end of
2016 and develop a framework
and system, as well as
capacity to manage and
execute business improvement
projects
Improved safety
practices
Implement and track
behavioural-based safety
programmes throughout
Gold Fields
The Gold Fields Integrated Annual Report 2015 Gold Fields’ strategic review for 2016
takes into account a continued
depressed gold price and our
budgets have been built around an
anticipated average gold prices of
US$1,100/oz, A$1,500/oz and
R500,00/kg. This places renewed
emphasis on business optimisation
as a priority for our operations and
we are guiding on an AIC of between
US$1,035/oz – US$1,045/oz and an
AISC of between US$1,000/oz –
US$1,010/oz for 2016 compared
with the 2015 actuals of
US$1,026/oz and US$1,007/oz
respectively. Capital expenditure for
the year is forecast at US$602 million
(2015: US$634 million).
Our production guidance for the year
is 2.05 – 2.10 million ounces, a
decline of at least 3% on the
2.16 million ounces achieved in
2015. Notable changes in 2016
include a reduction in production
from the Australian region to
901,000 ounces; the negative impact
of the lower copper price on Cerro
Corona; lower production from
Damang; and a 30% increase at
South Deep to 257,000 ounces.
The main expected contributors to
lower production in Australia in 2016
are as follows:
❯ At Granny Smith, mining of lower
grade areas of the mine on Zones
90 and 100
❯ At St Ives, closure of Athena
underground mine and
outperformance on grade from
Neptune ore in early 2015 at
St Ives
❯ Deeper mining at Agnew and
timing to access the new high
grade FBH and Cinderella ore
bodies
❯ Limited mining planned at Darlot
pending further exploration
success during the current year
The 30% increase in production from
South Deep is expected to be driven
mainly by an increase in available
working places, an increase in
productivity, fleet replacement and
grade improvements.
Our portfolio of mines will continue
to be evaluated in line with the
operations' abilities to contribute
towards the growth of the average
reserve life per mine and free cash
flow per ounce. In particular, we
anticipate decisions on the long-term
future of our Damang mine in Ghana
and the Darlot mine in Australia.
Growth will be driven, in the main,
through brownfields exploration at
our mines though we are also
aggressively looking at value-
accretive acquisitions.
An important addition to our 2016
scorecard is Technology and
Innovation, with our regions having
been tasked to develop and
implement three-year technology
plans in 2016. Gold Fields’ size still
suggests that we do not necessarily
have to be pioneers of research and
development in technology but fast
adopters of best practice. However,
recent advances in digitisation,
automation and mechanisation make
it critical that we develop strategies
to implement new technologies and
partner with IT companies and
Original Equipment Manufacturers
(OEMs) that are leaders in the field.
We have appointed a new member
to our Executive Committee (ExCo)
to oversee our progress in this area.
Integrated thinking
As I discussed last year, the
sustainability of our business is
ensured by understanding the
linkages between all of the inputs
and outputs of our operations,
enabling us to maximise the benefits
for all stakeholders and reduce the
risks to the business. Integrated
thinking underpins this approach and
while many of our processes and
linkages are formalised they are not
as fully articulated in our integrated
reporting. This will be one of my
priorities in 2016; the objective will
be to explain in greater detail how
integrated thinking is factored into
our business decisions. Our
integrated reporting will be an output
of this thinking.
vote of thanks
I would like to express my gratitude
to my fellow directors, led by our
Chairperson, Cheryl Carolus. Their
sound experience and guidance to
the executive management team
ensured that Gold Fields is reaping
the rewards of its transformation
strategy, whose implementation
demanded so much of their time,
energy and wealth of experience.
I would also like to welcome Steven
Reid to the Board. He joined in
February 2016 and brings with him
35 years of experience in the
mining industry.
The composition of the ExCo
remained steady since January
2015, when Avishkar Nagaser joined
as Head of Investor Relations. The
ExCo team provided the renewed
energy, input and experience to see
the Group through the sometimes
difficult and painful restructuring and
is now ensuring that we stay the
course. Subsequent to year-end we
have appointed Richard Butcher as
Executive Vice-President Technical.
He joined us from Australia’s MMG
and will bring 30 years’ experience
in technical services in the mining
industry to this new ExCo position.
Finally, I would like to express my
sincere gratitude to all the employees
of Gold Fields who continue to
astound me with the resilience,
commitment and long hours they put
in to ensure the operational and
financial success of the Group. The
Gold Fields team rivals any of our
peers in terms of experience,
technical ability and, above all,
enthusiasm and energy. I am proud
to lead them.
Nick Holland
CEO
27
The Gold Fields Integrated Annual Report 2015 2.2 CEO report (continued)
The mine of the future – looking ahead
This is a summary of a presentation Gold Fields’ CEO, Nick Holland, gave at the Future Mining Conference 2015 hosted
by the Australian Institute of Mining & Metallurgy in Sydney in November last year. The full presentation can be found on
our website at www.goldfields.co.za/pdf/presentations/2015/gold_fields_mine_of_the_future_28102015.pdf
Gold mining remains relevant and
valuable in today’s global economy.
But for mines to prosper in the long
term they have to transform
themselves into mines of the future
– mines that are sustainable and
create value for all their stakeholders.
Gold mining’s contribution to the
global economy is significant: 60% of
the top 30 gold-producing countries
are in the low or lower-middle
income bracket. Over US$171 billion
per annum is added to total GDP
from mining. The global gold mining
industry employs 4.2 million people
directly and indirectly, with a 5 – 10
dependency ratio for each direct
employee. Despite what the gold
bears think and say, gold has
continued to be a safe haven during
times of world crises, from the oil
shock of 1975, the Soviet/Afghan
war and Iranian revolution in the early
1980s, the stock market crash in
1987 and the latest financial crisis
that started in 2008.
However, of late the industry has
been confronted by a number of
headwinds, which present significant
risks to its long-term wellbeing.
Today it takes an average of 18 years
from discovery of gold to first
production compared to 10 years a
decade ago. While the grade of gold
has fallen 3% per annum since
2000 and prices are dropping, cost
inflation is ever-present. Both
governments and communities are
demanding greater benefits and
incidents of clashes with local
communities have risen 22% per
year over the past 10 years.
Throw in a gold price that has
declined by around 35% since its
peak in September 2011, and it is
not surprising that the sector has
seen shareholder value slump by
between 50% – 80% since 2007.
At Gold Fields, we recognised that
a new recipe is required for the
Company – and the industry – to
overcome these challenges. The
gold mine of the future has to be
set-up, structured and managed
differently from what it is today if it is
to remain relevant and value-adding
to all its stakeholders. This will
require a focus on four key areas:
operating practices and technology,
talent and leadership, partnerships
with key stakeholders and industry
partners as well as governance and
transparency.
The key operational challenges
confronting gold mining can be
grouped under five major headings:
❯ Embracing digital mining,
advanced analytics and new
software technologies
❯ Mining on demand, being the
ability to run agile production
schedules
❯ Converting conventional mining
practices to mechanisation and
automation
❯ Improving the economics of low
grade and residual ore bodies
❯ Embracing energy and water
efficiencies
Optimising existing technologies and
new technologies will provide the
solutions to these challenges, but
adoption by the industry has been
slow, particularly in developing
countries. Mines in Australia on the
other hand have been rolling out new
technologies with a significant impact
on costs, productivities and safety. If
mines in other countries want to be
sustainable they will have to follow
this course.
A further feature of the mining
industry’s technological
transformation will be ever-closer
co-operation with OEMs. These
OEMs develop and operate best-of-
class technologies and equipment at
various levels of automation. It
makes sense for mines to contract
OEMs to utilise their expertise. This is
particularly critical in South Africa’s
gold industry, where the next big
mining drive will have to take place in
ever deeper and dangerous
conditions. Technologies such as
remote pillar mining and raise boring
will only be possible in co-operation
with OEMs and technology
companies.
At South Deep, Gold Fields is in
many ways pioneering bulk, deep-
level, mechanised gold mining on
a significant scale. The skills of
operating and optimising of
equipment don’t come easy in
a mining culture that has been
overwhelmingly conventional mining.
But we are making gradual progress
in setting the base for what could
well be South Africa’s last major
gold mine.
A number of technology companies
are working on software advances in
mining, which can be grouped under
the ‘Big Data’ heading, where data
is captured by various sources,
digitised, analysed and finally
leveraged for better decision-making.
This has multiple applications for
mines, such as geological mapping,
geotechnical design, fleet tracking
and operator safety. We believe that
such technologies will provide us
with the edge to fundamentally
change our cost structure and
improve safety. To meet these
technical challenges, the mining
workforce of the future needs to be
highly skilled, specialised and
trained. Mining companies and
universities will need to work
together to develop and train the
personnel required.
28
The Gold Fields Integrated Annual Report 2015 Without a doubt, the mine of the
future will have a high-level skills set
that will lead to a smaller overall
workforce. This creates a dilemma
for many gold miners as adjacent
communities rely on them for jobs
and procurement. We need to find
a new model for community
engagement where we train some
community members for the new
mine, but where we also encourage
the development of the local
economy, so it is not reliant on jobs
or services from mining alone. While
today’s mining CEO manages
assets, tomorrow’s leaders will be
strategists, focusing on coaching
and mentoring, integrated
stakeholder management,
collaborative decision-making and
managing a portfolio of mines.
Operating decision-making will be
devolved down to mine site level.
Forging partnerships, with an
emphasis on joint ownership, risk
management and shared benefits,
will be an essential element of the
mine of the future. One of the trends
already in evidence is that mining
companies are increasingly co-
operating in developing and
managing gold mines to achieve
economies of scale and address
capacity constraints. Whether this
trend will lead to a more formal
consolidation of the gold sector
remains to be seen.
The main benefits mines provide to
society are job creation and paying
taxes and royalties. But increasingly
we are also seeing governments and
miners work together in private-
public partnerships, developing
essential road, power and water
infrastructure and supporting local
governments in building educational
and medical facilities. These
partnerships, I believe, will increase
in size and scope in future.
In so far as communities are
concerned, we believe that the most
direct benefits for communities can
be achieved by implementing Shared
Value projects in these communities,
where they and the mine itself benefit
from the creation of sustainable
value. Should we go further than this
by considering giving communities
direct equity or participation in profit
sharing in the mines in their area?
That is something we, as the
industry, should start debating as it
could certainly assist in earning and
maintaining our future social licences
to operate.
I also believe that our employees and
trade unions need to embrace a
risk-reward relationship with the
mines that will see them sharing the
risks in downtimes and participating
in the rewards of strong earnings
growth in better times. Wage
increases linked to productivity-
based performance are also likely to
become the norm in future.
Another area of focus for the mine
of the future is transparency, in
operational and financial performance,
social development, managing
environmental impact, regulatory
adherence and corporate governance.
The world is becoming more
accountable and as mining
companies, we need to embrace the
change and meet the new standards.
Future gold mines will not succeed
without the support of shareholders,
governments, employees and
communities. They are rightfully
demanding to see the benefit of the
resources we mine. This brings with
it many challenges but through
open engagement and partnerships,
I believe we can create a successful
gold mining company of the future.
❯ Employee in training at South Deep
29
The Gold Fields Integrated Annual Report 2015 30
❯ South Deep processing plant
The Gold Fields Integrated Annual Report 2015 2.3 Corporate governance
Overview
Our vision of global leadership in
sustainable gold mining, and our
ability to fulfil our stakeholder
promises requires the highest levels
of corporate governance. This
means an approach to governance
that supports the proactive and
effective management of those
strategic dynamics that will ultimately
determine our long-term
sustainability, whether operational,
economic, social, environmental or
otherwise.
This approach is essential given the
long-term, capital-intensive nature of
our mining projects, as well as the, at
times, challenging social and political
contexts in which we operate. It
requires us not only to ensure our
business remains profitable but also
to deliver clear economic, social and
environmental benefits to our
stakeholders.
Our management approach is
underpinned by our commitment
to sound and robust corporate
governance standards, which are
essential to our ultimate operational
and strategic success. A key element
of the approach is to ensure that the
Company complies with all laws and
regulations as well as the highest
levels of corporate governance.
Board of Directors
Board overview
The Board of Directors is the highest
governing authority of the Group and
the Board's Charter articulates its
objectives and responsibilities.
Likewise, each of the Board sub-
committees operates in accordance
with its written terms of reference,
which are reviewed on an annual
basis by the various Board
committees. During 2015, the Board
approved the establishment of a
separate Risk Committee (p34).
The Board takes ultimate
responsibility for the Company’s
adherence to sound corporate
governance standards and sees to it
that all business decisions and
judgements are made with
reasonable care, skill and diligence.
In terms of the Memorandum of
Incorporation (MOI), the number of
directors shall not be less than four and
not more than fifteen. The Board
currently comprises 10 directors, two
of whom are executive directors and
eight are 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. Each Board member
offers a range of relevant knowledge,
expertise and technical experience and
business acumen, which enables them
to exercise independent judgement in
Board deliberations and decision-
making. Furthermore, the Nominating
and Governance Committee also
ensures that the Board has adequate
diversity in respect of race, gender,
business, geographic and academic
backgrounds.
The role of non-executive directors,
who are independent of
management, is to protect
shareholders’ interests, including
those of minority shareholders.
Furthermore, they ensure that
individual directors or groups of
directors are subject to appropriate
scrutiny in their decision-making.
The roles of the Chair of the Board
and the CEO are kept separate.
Non-executive director Cheryl
Carolus was the Chair of the Board
and Nick Holland the CEO of Gold
Fields for the entire period under
review.
The Board is kept informed of all
developments relating to the Group,
primarily through the executive
directors, executive management
and the Company Secretary.
Furthermore, the Board stays
up-to-date through a number of
other mechanisms, including
employee climate surveys,
newsletters and internal staff
communication, among others.
Directors are required to declare
personal interests on an annual basis
and conflict of interest declarations
are done quarterly and at Board
meetings. Should a conflict of
interest arise its is dealt with in terms
of the Companies Act by the Board.
The non-executive directors are
entitled to seek independent
professional advice, at the Group’s
expense, on any matters pertaining
to Gold Fields. They also have
unrestricted access to the Group’s
management and access to the
external auditors, when necessary.
A brief curriculum vita for each
Board member is set out on pages
36 – 37 of this report.
Chief Financial Officer
Paul Schmidt was appointed Chief
Financial Officer (CFO) from 1 January
2009. In accordance with the JSE
Limited Listings Requirements, the
Audit Committee considered and
agreed unanimously that the level of
expertise and experience of Paul
Schmidt was satisfactory during 2015.
The Audit Committee was of the
opinion that Mr Schmidt, together with
other members of his financial
management team, had managed the
Group’s financial affairs effectively
during the 2015 financial year.
31
The Gold Fields Integrated Annual Report 2015 2.3 Corporate governance (continued)
Board appointments and
rotation
Directors are appointed through a
formal process, and the Nomination
and Governance Committee assists in
identifying suitable candidates and
evaluating candidates from time to
time. The Chair is appointed on an
annual basis by the Board after a
review of the Chair’s performance
and independence. In line with
recommendations by the King III Code,
the Board carries out a thorough
evaluation of the independence of
directors annually and specifically
where Board members have served on
the Board for nine years or more.
The Nominating and Governance
Committee also develops and
facilitates an induction programme with
management for new members of the
Board to ensure their understanding of
Gold Fields and the business
environment in which it operates.
In accordance with Gold Fields’ MOI,
one-third of all directors (including
executive 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 re-elected
immediately by the shareholders at the
Annual General Meeting.
The Board, assisted by the
Nominating and Governance
Committee, recommends the
eligibility of retiring directors (subject
to availability and their contribution to
the business) for re-appointment.
The MOI can be found on the Gold
Fields website at http://www.
goldfields.co.za/au_standards.php.
The Board appointed Rick Menell as
Deputy Chair, effective 19 August
2015. After year-end Steven Reid
joined the Board as an independent
non-executive director.
32
Directors’ dealings in shares of
Gold Fields
Gold Fields Board members and
employees are informed of closed
and prohibited periods for share
dealings by the Company Secretary.
Closed and prohibited periods
remain in force until final annual and
now bi-annual results are published.
This was done on a quarterly basis
during 2015. Similar closed periods
will be in place should the Company
trade under a cautionary
announcement. Any directors’
dealings (including executive
directors) require the pre-approval of
the Chairperson and the Company
Secretary keeps a register of
such dealings.
Board remuneration
Non-executive Board members are
remunerated for their services as
non-executive Board members, the
separate Committees’ they sit on
annually, and where applicable, travel
expenses to attend Board meetings.
Shareholders approve these fees on
an annual basis at the Company’s
Annual General Meeting.
Further details on non-executive
directors and executive directors’
remuneration can be found on
page 135.
Board of Directors’ Charter
During the year, the Board reviewed
the Board of Directors’ Charter to
align it to the recommendations of
the King III Code of Corporate
Governance (King III). The application
of the King III principles at Gold
Fields can be found on our website
at http://www.goldfields.co.za/au_
standards.php.
The Charter compels directors to
promote the Vision of the Company
while upholding sound principles of
corporate governance. Other
directors’ responsibilities under the
Charter include:
❯ Determining the Company’s Code of
Ethics and conducting its affairs in a
professional manner, upholding the
core values of integrity, transparency
and enterprise
❯ Evaluating, determining and
ensuring the implementation of
corporate strategy and policy
❯ Determining compensation,
development, and other relevant
policies for employees
❯ Developing and setting best-
practice disclosure and reporting
practices that meet the needs of
all stakeholders
❯ Authorising and controlling capital
expenditure and reviewing
investment capital and funding
proposals
❯ Constantly updating the risk
management systems, including
setting management expenditure
authorisation levels and exposure
limit guidelines
❯ Reviewing executive succession
planning and endorsing senior
executive appointments,
organisational changes and
general remuneration policies. In
this, the Board is guided by the
Remuneration Committee as well
as the Nominating and
Governance Committee
Company Secretary
The Company Secretary provides
company secretarial services, oversees
Board governance processes in
relation to the Board (in accordance
with JSE Listings Requirements) and
attends all Board and Board
Committee meetings, other than the
Remuneration Committee. The Board
has access to the Company Secretary,
who guides the directors on their duties
and responsibilities. During the year
under review, the Company Secretary
oversaw ongoing training of the
directors and assisted the Board and
its committees, with annual plans,
agendas, minutes and terms of
reference.
The Gold Fields Integrated Annual Report 2015 The Company Secretary for the year
under review was Lucy Mokoka,
and the Board is satisfied that
Ms Mokoka is competent, qualified
and has the necessary expertise and
experience to fulfil the role. The
Company Secretary is not a director
of the Group and has an arm’s-length
relationship with the Board.
Board attendance
The Board is required to meet at least
four times a year. It convened six times
during 2015 as two special Board
meetings were held to deliberate on
urgent substantive matters. A meeting
of the Board may be conducted by
electronic communication in terms of
the Board Charter.
All directors are provided with the
necessary information through
comprehensive Board packs prepared
by management in advance of each
Board or committee meeting to enable
them to discharge their responsibilities
effectively.
Number of Board meetings, Board Committees meetings and directors’ attendance during the year
Board
Meetings
Special
Board
Meetings
Audit
Committee
Safety,
Health and
Sustainability
Committee
Capital
Projects
Committee
Remuneration
Committee
Social and
Ethics
Committee
Nominating
and
Governance
Committee
4
4
4
4
4
4
4
4
4
4
2
2
2
2
2
2
2
2
2
2
71
–
–
–
7
7
–
7
7
7
4
4
4
4
4
4
4
1
–
–
4
2
–
4
4
4
4
–
–
4
4
4
–
4
4
–
–
4
–
4
4
4
2
4
4
4
4
4
–
4
4
4
4
–
4
–
–
4
–
–
Directors
No. of meetings
per year
CA Carolus2
K Ansah2
AR Hill
NJ Holland
RP Menell
DN Murray
DMJ Ncube2
PA Schmidt
GM Wilson
‘–’ denotes that the Board member is not a member of the Committee
1 This included a second, unscheduled, review meeting of the Integrated Annual Report
2 During the latter part of 2015, it was agreed that certain Board Members attend the following Committees as invitees going forward.
CA Carolus – Capital Projects Committee, K Ansah – Social and Ethics Committee and DMJ Ncube – Safety, Health and Sustainability
Committee
33
The Gold Fields Integrated Annual Report 2015 2.3 Corporate governance (continued)
The Board agenda and meeting
structure focuses on strategy,
sustainable development, finance,
performance monitoring, governance
and other related matters. During the
period under review, the Board
meetings and some committee
meetings were preceded by closed
session meetings of non-executive
directors. The Board members also
attended a multi-day strategy session
on the Company.
Application of King iii within
Gold Fields
The Board’s Charter is aligned to the
King III corporate governance report
and is reviewed annually. King III is
endorsed by the JSE Limited and
certain aspects of King III are
included in the JSE Listing
Requirements. The Board supports
the recommendations on good
governance contained in King III.
The implementation and adherence
to relevant King III principles and
recommendations across Gold Fields
can be found at https://www.
goldfields.co.za/au_standards.php.
Similarly, the Group’s reporting in
terms of Section 3.84 of the JSE
Listings Requirements on Board
Governance processes can be found
at https://www.goldfields.co.za/
au_standards.php.
Board committees
The Board has established a number
of standing committees in
compliance with the South African
Companies Act with delegated
authority from the Board. The
committee members are all
independent non-executive directors,
and the CEO and various members
of management are permanent
invitees to the committee meetings.
Each Board committee is chaired by
an independent non-executive
director.
In February 2016, the Board
reviewed the membership and
structure of the Risk Committee,
which historically was the sole
responsibility of the Audit Committee.
This Committee will continue to
assist the Board in its oversight of
the integrity and effectiveness of the
Gold Fields' risk management
processes. Given the increased
significance of risk management it
was decided to move it under a
standalone subcommittee.
Committees operate in accordance
with written terms of reference
and have a set list of responsibilities.
These are outlined at https://www.
goldfields.com/au_standards.php.
The charters of the Board and the
committees can be found at https://
www.goldfields.co.za/au_standards.
php.
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. In line with the King III
recommendations, the Board
annually reviews the terms of
reference for all committees, and, if
necessary, adopts changes which
are approved by the Board.
The full Directors’ Report is
contained in the Annual Financial
Report on pages 35 – 42.
Board of
Directors
Nominating and
Governance
Committee
Audit
Committee
Remuneration
Committee
Safety, Health
and Sustainable
Development
Committee
Capital Projects
Control and
Review
Committee
Social and
Ethics
Committee
Risk
Committee
Executive
Committee
34
The Gold Fields Integrated Annual Report 2015 Standards, principles and systems
internal and external standards and principles
Internal standards and
principles
Gold Fields has developed a
comprehensive set of internal
standards and principles that
underpin how we do business.
These include:
Our Vision and Values:
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 Group
Board of Directors’ Charter:
The Charter articulates the
objectives and responsibilities
of the Board. Likewise, each of
the Board committees
operates in accordance with
written terms of reference that
are regularly reviewed
Sustainable Development
Framework:
Gold Fields’ Sustainable
Development Framework is
based on best practice, as
well as our operational
requirements. The framework
is governed by an overall
Sustainable Development
Policy
The Group has developed a
range of guidelines that directs
business conduct in those
areas (https://www.goldfields.
com/au_standards.php)
Code of Ethics:
The Gold Fields Code of Ethics
commits and binds every
employee, officer and director
within Gold Fields to
conducting business in an
ethical and fair manner. The
Board’s Audit and Social and
Ethics Committees are tasked
with ensuring the consistent
application of, and adherence
to, the Code. The Code is on
our website at https://www.
goldfields.com/au_ethics.php
Listings requirements
Sustainability standards
Our primary listing is on the
JSE Limited (JSE) and we
are subject to the JSE
Listings Requirements
Gold Fields has a
secondary listing on the
New York Stock Exchange
(NYSE) and therefore, as a
foreign issuer, subject to
the NYSE Listings
Requirements, the
provisions of the US
Securities and Exchange
Commission, as well as the
terms of the Sarbanes-
Oxley Act (2002)
Gold Fields is also listed on
the Swiss Exchange (SWX)
We have implemented
South Africa’s King III
principles and
recommendations
across Gold Fields
Our Sustainable
Development Framework is
guided by the International
Council on Mining and
Metals’ (ICMM) 10
principles on sustainable
development, their
supporting position
statements and external
assurance thereof
We are guided by the
10 principles of the UN
Global Compact (in which
we are a participant),
including their
implementation in our
business activities, and the
annual submission of the
Communication on
Progress Report
All of our eligible operations
conform with the World
Gold Council Conflict-Free
Gold Standard. A copy of
our Conflict-Free Gold
Report, our Statement of
Conformance, together
with the independent
limited assurance opinion
can be viewed online at
https://www.goldfields.
co.za/sus_reporting.php
Our reporting is guided
by the internationally
recognised Global
Reporting Initiative (GRI)
G4-Core Sustainability
Reporting Guidelines,
including the Mining and
Metals Sector Supplement.
Our 2015 GRI submission
can be viewed online at
https://www.goldfields.co.
za/sus_reporting.php
A number of environmental
and safety standards,
including ISO 14001,
OHSAS 18001 and the
International Cynide
Management Code
Business ethics and
standards
Our Code of Ethics is
aligned with national and
international business
ethics and anti-corruption
standards, including the
UN Convention against
Corruption (2003) and the
OECD Convention on
Combating Bribery of
Foreign Public Officials in
International Business
Transactions (1997)
We support the principles
and processes of the
Extractive Industry
Transparency Initiative
(EITI), through our
membership of the ICMM.
Ghana and Peru are the
EITI-compliant countries in
which we operate
King III as well as the
Prevention and Combating
of Corrupt Activities Act
(2004)
The United States’
Sarbanes-Oxley Act (2002),
Dodd-Frank Act (2010) and
the Foreign Corrupt
Practices Act (1977)
All relevant regulations and
legislations in jurisdictions
in which Gold Fields
operates
35
The Gold Fields Integrated Annual Report 2015
2.3 Corporate governance (continued)
2
3
4
5
1
❯
From left: Cheryl Carolus – Chairperson, Richard Menell – Deputy Chair, Kofi Ansah, Alan Hill, David Murray
Directors
Non-executive directors
1. Cheryl A Carolus (57)
Chair
BA Law; Bachelor of Education,
University of the Western Cape
Ms Carolus was appointed a director of
Gold Fields on 10 March 2009 and was
appointed as the Chair on 14 February
2013. She is Executive Chair of Peotona
Group Holdings. She is a director of a
number of other public and private
companies, including Investec and
De Beers, and she also serves pro bono
on non-profit organisations, including the
World Wildlife Fund and The British
Museum. She served as South Africa’s High
Commissioner to the United Kingdom from
2001 to 2004, Chairperson of the South
African National Parks board for six years
and Chairperson of South African Airways
from 2009 to 2012. She was awarded an
honorary doctorate in law from the
University of Cape Town for her contribution
to freedom and human rights. In 2014, she
was awarded the French National Order of
Merit by the Government of France.
2. Richard P Menell (60)
Deputy Chair
BA (Hons), MA (Natural Sciences
Geology), Cambridge; MSc (Mineral
Exploration and Management), Stanford
University, California
Mr Menell was appointed a director of
Gold Fields on 8 October 2008 and was
appointed as Deputy Chair on 19 August
2015. He became a non-executive director
of Sibanye Gold on 1 January 2013.
Mr Menell has over 37 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
Rockwell Diamonds Inc, as well as Senior
Adviser to Credit Suisse. He also serves
as a director of a number of unlisted
companies and non-profit organisations.
3. Kofi Ansah (71)
BSc (Mechanical Engineering), UST
Ghana; MSc (Metallurgy), Georgia
Institute of Technology
Mr Ansah was appointed a director of Gold
Fields in April 2004. He also serves as a
director of Ecobank (Ghana) Limited. From
1984 to 1999, he was the Chief Executive
of the Ghana Minerals Commission. He is
currently a mining and energy consultant.
4. Alan R Hill (73)
BSc (Hons); MPhil (Rock Mechanics),
Leeds University
Mr Hill joined the Board on 21 August
2009. On 2 October 2010, he was
appointed the CEO and executive Chair
of Teranga Gold Corporation and
non-executive Chair in 2013. 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.
5. David N Murray (71)
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 40 years’ experience in the
mining industry and has been CEO of Rio
Tinto Portugal, Rio Tinto Brazil, TVX Gold
Inc, Avgold and Avmin. He also served as
a non-executive director of Ivernia Inc.
36
The Gold Fields Integrated Annual Report 2015
7
9
10
6
8
❯
From left: Donald Ncube, Steven Reid, Gayle Wilson, Nicholas Holland, Paul Schmidt
6. Donald MJ Ncube (68)
BA (Economics) and Political Science,
Fort Hare University; Postgraduate
Diploma in Labour Relations, Strathclyde
University, Scotland; Graduate MSc
(Manpower Studies), University of
Manchester; 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 executive Chair of Badimo
Gas and Managing Director of Vula Mining
Supplies.
7. Steven Reid (60)
Bachelor of Applied Science in Mineral
Engineering (Mining), South Australia
Institute of Technology; MBA, Trium
NYU/LSE/HEC; Directors’ Education
Program, Institute of Corporate Directors
Mr Reid was appointed as a director
of Gold Fields on 1 February 2016.
He has over 35 years’ international
business experience and has held senior
leadership roles in numerous countries.
He has served as a director of Silver
Standard Resources since January 2013
and a director of Eldorado Gold since
May 2013. He served as Chief Operating
Officer of Goldcorp from January 2007
until his retirement in September 2012,
and was the company’s Executive Vice
President, Canada and USA. Before
joining Goldcorp, Mr Reid spent 13 years
at Placer Dome in numerous corporate,
mine management and operating
roles, including country manager for
their Canadian operations. He also
held leadership positions at Kingsgate
Consolidated and Newcrest Mining,
where he was responsible for running the
Asian and Australian operations.
8. Gayle M Wilson (71)
BCom; BCompt (Hons) Unisa; CA(SA)
Ms Wilson was appointed a director on
1 August 2008. She was previously an
audit partner at Ernst & Young for 16 years,
where her main focus was on listed gold
and platinum mining clients. She was lead
partner on the global audit of AngloGold
Ashanti and other mining clients during her
career included Northam Platinum,
Aquarius Platinum, Avmin (now African
Rainbow Minerals) and certain Anglo
Platinum operations.
Executive Directors
9. Nicholas J Holland (57)
Chief Executive Officer (CEO)
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 36 years’
experience in financial management,
of which 26 years were in the mining
industry. Prior to joining Gold Fields,
he was Financial Director and Senior
Manager of Corporate Finance at Gencor.
10. Paul A Schmidt (48)
Chief Financial Officer (CFO)
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 20 years’
experience in the mining industry.
37
The Gold Fields Integrated Annual Report 2015
2.3 Corporate governance (continued)
Compliance and ethics
Gold Fields is committed to acting
responsibly, honestly and with respect
for others. This means going ‘beyond
compliance’ and applying the highest
ethical standards, so the Group can
continue to enjoy the confidence of its
investors, business partners,
employees, host governments and
community members.
Legal, ethical and regulatory
compliance
Regulatory compliance
As Gold Fields operates in various
jurisdictions, the legal and regulatory
environment is an ever changing one
which can lead to complex matters.
In order to manage this effectively
and efficiently, and enhance risk
mitigation strategies, Gold Fields has
established a risk-based Group
compliance programme to provide
the highest levels of assurance for
regulatory compliance. In terms of
the programme, Gold Fields:
❯ Identifies and consistently reviews
all statutes in its operating
jurisdictions and assesses the
exposure to non-compliance and
regulatory risks
❯ Ensures that the internal control
environment is aligned to
prioritised risks encompassed in
statutory requirements
❯ Conducts reviews by Internal Audit
to assess that appropriate
measures are implemented and
that controls are effective to
mitigate and manage risk
A Group compliance index has been
developed to accommodate
changes within the business,
applicable statutes, as well as
compliance and regulatory risks. The
programme and associated internal
controls will be assured by
management, internal audit and
external assurers on an annual basis.
Ethics
Gold Fields has a zero tolerance
approach to any activities that
undermine the legitimate business
environment and all directors and
employees are bound by its Code of
Ethics. The Code articulates Gold
Fields policy with respect to an array
of activities, transactions,
engagements and conduct.
Implementation of the Code is
supported by:
❯ An online ethics portal
❯ Well-defined responsibilities and
accountabilities
❯ Stringent internal reporting
processes
❯ An anonymous whistle-blowing
hotline managed by an
independent third party (Deloitte)
❯ Annual training for all employees,
especially training for those in
high-risk roles
❯ Gold Fields is rolling out training to
suppliers on ethics and regulatory
matters in our various jurisdictions
Breaches of the Code will result in
disciplinary action, which can lead to
dismissal or even criminal prosecutions.
The Code of Ethics can be found on
Gold Fields’ website at www.goldfields.
com/au_ethics.php.
External organisations
Increasingly, the reputational and
operational risks of companies are
tied to external parties who form part
of a company’s value chain and Gold
Fields strives to develop and
maintain strong relationships with
these parties. During 2015, Gold
Fields implemented a due diligence
application to establish the risk
profiles of external suppliers and
contractors by monitoring a range of
local and international databases.
The application concentrates on the
financial, environmental, social,
governance and labour performance
of the external parties.
The outcomes of the screening
exercise are filtered through to
regional risk management processes
and used by the regions to decide
on the appointment of external
suppliers and contractors and, where
applicable, the continuation of
existing relationships.
Gold Fields’ procurement processes
are designed to ensure suppliers
adhere to the Group’s policies and
standards. All agreements entered
into by suppliers and contractors
require suppliers to comply with all
relevant legislation, best practice
standards and Gold Fields policies
and procedures that the Group
adheres to. Furthermore, Gold Fields
has the right to audit the supplier or
contractor’s processes to ensure
compliance. Furthermore, on a
regular basis, all suppliers are
required to attest to their compliance
with all applicable regulations
governing their business.
38
The Gold Fields Integrated Annual Report 2015 2.4 Operating context
Strategic trends
Like other companies, Gold Fields
is subject to a range of external
strategic dynamics that inform
decision-making, and influence both
current and future business
performance. Analysis of three of
these key strategic issues – and how
Gold Fields is responding to them –
is set out below.
Gold supply and demand
Issue
The price of gold has fallen by
around 45% between 2011 and
2015. Since then it has recovered
and in early March 2016 was trading
at levels of around US$1,200/oz –
US$1,250/oz. More than any other
variable, the gold price is the key
dynamic informing our business
strategy and the volatility of the price
over the past few years has been
one of the key reasons for the
restructuring journey on which we
have embarked.
Much of the traditional investor case
for gold as a safe haven has come
under pressure over the past four
years. In 2012, investor demand
eased as it became apparent that
many of the feared economic
worst-case scenarios were unlikely
to materialise. The gold price
subsequently retreated to sub-2011
levels – just as the equity and real
estate markets started to offer
stronger returns. As a result, many
investors sold their physical gold
holdings in 2013 and 2014 –
resulting in a sharp drop in the gold
price.
Central banks’ net gold purchases
(Tonnes)
800
600
400
200
0
(200)
(400)
(600)
(800)
0
8
5
0
2
6
0
9
5
8
9
5
0
0
5
0
9
)
0
2
6
(
)
0
0
5
(
)
0
8
6
(
)
0
7
3
(
)
0
9
4
(
)
0
5
(
)
0
5
2
(
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
Net sales
Net purchases
Source: Metals Focus; GFMS, Thomson Reuters; World Gold Council
Global gold mine production
Annual mine production (Moz)
Peak gold production
6
4 9
2 9
9
3
9
2
9
0
9
9
8
0
9 9
8
7
8
5
8
2
8
1
8
100
95
90
85
80
75
70
2
8
0
8
7
7
1
8
6
7
5
7
4
7
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
Actual production
GFMS forecast
Source: GFMS
The gold price continued to decline
in 2015 by 8% year-on-year amid
slowing demand and fears of an
interest rate hike in the US – which
did not materialise. On balance, the
negative supply and demand trends
have seen the average gold price
received by Gold Fields decline to
US$ 1,140/oz in 2015 from a high
of US1,656/oz in 2012.
While much of the gold price’s
short-term movements are the result
of market sentiment, the longer-term
movements remain underpinned by
supply and demand fundamentals.
An analysis of these fundamentals
confirms our belief that the gold price
will improve over the next few years
though it will undoubtedly experience
more short-term volatility.
According to the World Gold Council,
gold demand was little changed last
year declining from 4,414 tonnes in
2014 to 4,258 tonnes in 2015.
However, in the longer term, key
demand fundamentals are asserting
themselves due to:
❯ Ongoing growth in emerging
market demand for physical gold
– in China, India and other
countries. Jewellery demand in
both countries rebounded in the
second half of last year continuing
a long-term trend which confirmed
the inherent affinity of consumers
in those countries to gold
❯ A continued build-up of gold
reserves by the world’s central
banks (or, at least, maintaining
their current holdings) amid
economic and political uncertainty
and reserve diversification away
from the US Dollar. Net purchases
by central banks and other official
institutions totalled 588 tonnes in
2015, in line with the strong
purchases of around 600 tonnes
per annum for each of the
preceding three years
39
The Gold Fields Integrated Annual Report 2015 2.4 Operating context (continued)
❯ The continued need for a safe
haven asset in times of economic
and political uncertainty. Though
this may not have been as
prevalent a factor over the past five
years as previously used to be the
case, the gold price’s more recent
recovery to levels of around
US$1,250/oz has been driven
amid investor uncertainty in global
stock markets
Long-term gold supply issues will
also act to support a recovery in the
gold price, we believe. According to
the WGC total gold supply declined
by 7% in Q4 2015, due to an
estimated 4% drop in global mine
output, the largest quarterly
reduction since 2008. Total mine
production for 2015 at 3,176 tonnes
was only 1% higher than 2014
production, its slowest annual
increase since 2008.
This trend is set to continue. The
GFMS consultancy predicts a further
drop in mine production in 2016, due
to lower production at more mature
mines, a decline in average grades at
most gold operations and a lack of
new mines coming on stream.
Many analysts believe peak mine
production was reached in 2015
coinciding with a high in gold
discoveries in the mid-1990s and
assuming an average 20-year
development cycle. Goldman Sachs
has stated that there may be only
20 years of known mineable reserves
of gold left.
Response
Gold Fields believes in gold. This
means the Group will continue to
focus on gold mining and will not
hedge, on the basis that we believe:
❯ The supply and demand
fundamentals support a medium-
to long-term recovery in the gold
price
❯ The Group’s portfolio approach
and strategic and mining expertise
should provide returns for gold
investors now and in the future
Gold Fields’ ability to maximise value
can be attributed to its strategic shift
to cash flow generation by:
❯ De-prioritising production volume
❯ Setting cash flow targets and
margins and linking short- and
long-term management incentives
to key deliverable criteria
❯ Closing marginal mining operations
at existing mines and selling
non-strategic growth assets
❯ Stopping all greenfields exploration
and focusing on brownfields
exploration
This strategy, conceived before the
price of gold experienced a serious
drop – means Gold Fields now
enjoys a measure of resilience in the
face of current market conditions.
For example, all production is being
planned around the delivery of a
15% free cash flow margin at a
long-term planning gold price of
US$1,300/oz. This means the Group
is in a relatively strong position to
weather a sustained low gold price
and/or further falls in the price of
gold (should they re-occur). It also
means Gold Fields will be particularly
well-positioned to capture future
upside and deliver superior leverage
to investors when the gold price
recovers. In such circumstances,
Gold Fields is committed to
maintaining discipline when the
market becomes more buoyant, and
to avoiding the temptation of
producing incremental ounces.
This builds on Gold Fields’ existing
commitment to avoid ‘high-grading’
– due to the obvious negative impact
this would have on the sustainability
of its ore bodies. As such, Group
guidance requires all operations to
mine at or below their reserve grade.
Gold Fields is also continuing to
invest in the future of its mines. This
includes the ongoing development
of its ore bodies – and proactive
near-mine exploration. These are
strategic essentials that will in no
way be compromised by the current
price environment.
Social licence to operate
Issue
The nature of the extractive sector
means the industry must pay
particular attention to its social
licence to operate. Unlike other
companies, mining companies are
dependent on their mineral deposits
and cannot relocate to new locations
when facing deteriorating local and/
or national operating environments.
Furthermore, many mines’ lifecycles
can span decades – and mines must
be able to navigate complex social,
economic and political dynamics
over time.
To manage the potential risks, mining
companies need to maximise their
positive local impacts, minimise their
negative local impacts and make
sure that this is communicated to –
and recognised by – host community
stakeholders.
While many companies generate
significant value for their host
societies and governments –
including through the generation of
public revenues – this does not
always benefit those host
communities who bear the brunt
of the direct negative impacts.
Additional and targeted efforts need
to be made to ensure host
communities benefit directly from the
presence of mines and have a direct
interest in their continued and
profitable operation.
Response
Gold Fields understands that it must
satisfy immediate shareholder
requirements for cash generation
while securing the longer-term value
of its assets. As a result, it also
recognises that the long-term
generation of value for shareholders
will ultimately be supported by:
❯ Responsibility: ongoing
investment in responsible
operational standards to avoid
and mitigate negative social and
environmental impacts. This
includes effective water
management, an increasingly
40
The Gold Fields Integrated Annual Report 2015 material issue for most mining
companies and that can, if poorly
managed, have a serious impact
on local communities (p97)
❯ Trust: frank, two-way
communication, realistic
expectation management and
visibly honouring commitments
builds trust. This includes ongoing
engagement on issues such as
indigenous rights, employment
opportunities (p110) and social
transformation.
❯ Understanding: investment in
communities relies on a thorough
understanding of the risks,
community needs and community
perceptions. Since 2014, Gold
Fields has undertaken relational
proximity studies at its South Deep
mine, which have revealed a gap in
the mine’s community investment
programmes. This assessment
survey is being extended to our
Ghanaian and Peruvian operations.
❯ Shared value: the pursuit of
cost-effective, mine-level business
strategies that enhance the value
of our own business and generate
positive social impacts helps to
ensure that interactions with local
stakeholders are firmly based on
mutual interest from the start. Gold
Fields currently has four Shared
Value pilot projects (p118). These
are further supported by Gold
Fields’ broader, ongoing efforts to
recruit employees and contractors
from local communities – and to
source goods and services from
local companies (p110)
These efforts are particularly
important in the low gold price
context, which has significant impact
on employees due to the potential
for retrenchments and on the ability
of the Group to invest in community
development projects.
regulatory issues
Over the past four years the global
gold mining industry has been
severely impacted by falling
commodity prices and rising input
costs. Nonetheless, a forward-
looking regulatory and fiscal
environment should enable us to ride
out these kinds of short-term
fluctuations and achieve sustained
returns over the 15- to 20-year
average life of a mining project. In
many jurisdictions, however, the legal
and tax environment has become
less conducive to the long-term
viability of the mining sector, partly
driven by continued government-
backed resource nationalism.
This has been fuelled by the actions
of governments all over the world,
which views the industry as an easy
target for higher taxes and other
fiscal imposts. As a result the
governments’ share of the ‘mining
pie’ has grown at the expense of
other stakeholders, especially
workers and, crucially, the providers
of capital.
Strategic response
The question is how the trust gap
between mining companies and
governments can best be bridged.
Gold Fields on its own and in
conjunction with its peers in the gold
sector and the wider mining industry,
has sought to address this trust gap
in a number of ways.
❯ In 2013, Gold Fields was one of
the drivers in the World Gold
Council (WGC) to adopt greater
transparency about the real costs
of mining, with the introduction of
new cost metrics, namely All-in
Costs and All-in Sustaining Costs.
This cost reporting is now
entrenched in the sector
❯ A number of recent economic
studies show that, far from being a
sunset industry, the socio-
economic impact of mining
remains significant, particularly in
developing countries. Mining tends
to generate large numbers of
indirect jobs and to enjoy significant
economic multiplier effects
❯ The impact of gold mining goes
beyond economic growth and jobs.
Gold Fields has adopted WGC
methodology on total value
distribution that shows the wider
national impact mining has on the
economy. Over the past three
years, Gold Fields has consistently
distributed between US$2 billion
and US$3 billion to our wide range
of stakeholders – accounting for
around 90% of revenue on average
(p11)
❯ Increasingly, miners are seeking to
have an impact not just on the
national economy, but also on the
local economy of the communities
that live adjacent to the mines.
These communities hold the mines’
social licence to operate and often
do not feel they are receiving a fair
share of the pie. Beyond traditional
socio-economic development
(SED) spend, Gold Fields is actively
promoting employment and
procurement from host
communities. This is starting to
have a positive impact on our host
communities (p110)
Despite all of its perceived
shortcomings, there can be no doubt
that – if executed responsibly –
mining can be a significant force for
sustainable growth. However, this
potential is currently not being
realised, as the key stakeholders
have failed to find common ground
with each other and investors have
fled, denying the industry the capital it
needs to fund sustainable growth.
Gold Fields is actively engaging with
its host governments in Ghana, Peru
and South Africa in addressing the
resource nationalism that, we believe,
prevents the industry from achieving
sustainable growth and broad-based
value distribution.
41
The Gold Fields Integrated Annual Report 2015 2.5 Risk and materiality
The ERM process – which prioritises
risks on the basis of probability and
severity – is based on the following
process:
1. Workplace risk assessments:
Managers carry out ongoing
workplace risk assessments in
accordance with international
standards (for example, ISO
31000 and the SAMREC
guideline)
2. Mine/region reviews: Each
regional and mine ExCo conducts
a review of the top risks and
mitigating strategies on a
quarterly basis
3. Presentation to the Group ExCo:
Each mine manager presents the
top 10 risks and mitigation
actions to Exco during quarterly
business reviews – and mitigating
actions are assessed for
relevance and effectiveness
4. Compilation of Group Risk
Register: The Group Risk
Manager extracts the top risks
from the regional and operational
registers in line with the tolerance
levels set by the Board, and
compiles the Group Risk Register
5. Assessment and moderation:
The risks are assessed and
moderated at a Group-level by
relevant risk owners and ExCo
members
6. ExCo risk meeting: Every six
months, ExCo reviews the top
risks and sets and monitors
Group-wide mitigation strategies
7. Audit Committee review: The
Audit Committee reviews the top
risks and mitigation strategies
twice a year. This work will move
to the reconstituted Risk
Committee during 2016
(AFR – p2).
8. Internal audit review: The internal
audit function assesses progress
against – and adherence to –
mitigation strategies on a regular
basis
The Group heat maps on pages
46 – 49 set out:
❯ The Group’s top 10 risks as well as
top five risks per region, as
identified through the ERM
process (i.e. the Group’s top
operational and strategic risks at
the end of 2015)
❯ Key movements in the top 10
Group risks between 2014 and
2015
❯ Key mitigating strategies to avoid
and/or mitigate the top 10 Group
risks for 2015, and the top five
risks per region
External assessment:
Stakeholder engagement
Proactive and frank stakeholder
engagement plays a vital role in
helping Gold Fields identify its
material issues. All stakeholder
engagement activities are informed
by the AA 1000 principles of:
❯ Inclusivity
❯ Materiality
❯ Responsiveness
Gold Fields’ engagement activities
fall into two categories:
❯ Direct engagement, including
organised dialogues, roundtable
discussions, one-to-one meetings,
internal surveys and regular
engagement with local
communities and other
stakeholders at each operation
and project
Gold Fields uses a set of four
well-defined processes to assess its
risks, opportunities and material
issues:
1. Key risks – and mitigating actions
– are identified using an
Enterprise-wide Risk
Management (ERM) process
2. The Group takes into account the
views and concerns of a wide
group of stakeholders through
direct and indirect stakeholder
engagement processes
3. As part of the integrated reporting
process, the Group conducts
comprehensive interviews with
key management, collects
operational, financial and
sustainability data, and analyses
the short-, medium- and long-
term strategic trends affecting the
business
4. Material sustainability issues are
assessed and prioritised
according to the GRI G4
Guidelines, and comprehensive
internal and external stakeholder
interviews conducted to
determine the relative ranking of
material issues
The outputs from these four
processes have informed the
identification of the risks,
opportunities and material issues
contained in this Integrated Annual
Report (IAR). Key elements of the
four processes are set out alongside.
internal assessment: Enterprise-
wide risk Management (ErM)
Gold Fields’ mature ERM process is
aligned with the ISO 31000
international risk management
standard, as well as the risk
management requirements of South
Africa’s King III Code.
42
The Gold Fields Integrated Annual Report 2015 ❯ Indirect engagement, including
the use of external benchmarks
and standards (such as the UN
Global Compact) that are designed
to reflect and address societal
expectations
❯ Shareholders and potential
investors by the Group investor
relations team, CEO, CFO and
regional EVPs
❯ Materiality assessment process
(p45)
The IAR is prepared on the basis of
this process and is subject to a
rigorous internal assurance process.
The Board – through the Audit
Committee – is ultimately responsible
for the contents of this IAR.
Operational engagement
At an operational-level, all mines
identify, prioritise and directly engage
stakeholder groups that have the
potential to affect their operational,
sustainability or financial
performance.
This includes, for example, ongoing
engagement of:
❯ Employees and their
representatives by our human
resources teams and general
managers
❯ Local communities by our
community relations teams and
general managars
❯ Regulators by our discipline heads
and general managers
❯ Key contractors and suppliers by
our procurement teams, health
and safety managers and
operational personnel
Strategic engagement
At a strategic-level, Gold Fields’
corporate and regional management
teams implement an ongoing
programme of direct and indirect
engagement. This includes ongoing
engagement of:
❯ In-country peer companies by the
regional Executive Vice-Presidents
(EVPs)
❯ Central, regional and local
governments by the Group’s
corporate affairs teams and legal
teams, as well as members of the
Group ExCo and regional EVPs
The outcomes of stakeholder
engagement are integrated into Gold
Fields’ internal reporting processes
– including its quarterly regional
board reports, sustainable
development reports and other
documents. In addition, they inform
Gold Fields’ ERM process, and
external reporting processes.
integrated reporting process
The outputs of the ERM and
stakeholder engagement processes
are analysed alongside the information
collected for the IAR. This includes:
❯ Gold Fields’ operational, financial
and sustainability data generated
through our data management
systems
❯ The output of dedicated integrated
reporting interviews with managers
and executives at operation-,
region- and Group-level
❯ Short-, medium- and long-term
strategic analysis of the external
environment
This is with the aim of:
❯ Gaining greater insight into the
Group’s material issues
❯ Identifying and assessing the
management actions taken in
response to each material issue
– as well as the effectiveness of
such actions
❯ Defining the content of this IAR
Materiality assessment
Gold Fields has carried out a formal
process to assess and prioritise its
material sustainability issues. It has
done so using criteria aligned with
those set out in the GRI G4
Guidelines taking into account the
actual or potential impact of these
issues on Gold Fields and its
stakeholders.
Materiality process
Gold Fields’ GRI G4 materiality
process is based on a series of
iterative assessments using a
common, quantitative scoring
framework. It draws on a range of
internal and external sources, as
outlined below:
1. National and international
legislation and regulation
2. Standards
Internal:
Gold Fields’ Vision and Values;
Sustainable Development
Framework; Stakeholder Charters;
and Code of Ethics
External:
10 Principles of the UN Global
Compact; UN Guiding Principles
on Business and Human Rights;
ICMM 10 Principles on
Sustainable Development; and
ISO 14001 (environment) and
OHSAS 180001 (safety)
management standards
43
The Gold Fields Integrated Annual Report 2015
2.5 risk and materiality (continued)
3. Documentation
Internal:
Gold Fields Board reports; Safety,
Health and Sustainable
Development reporting; and ERM
output documents
External:
Media reports; NGO commentary;
and sector analysis
4. Engagement
Internal:
Engagement around the specific
requirements of the GRI with
senior management
External:
Engagement with external
stakeholders
Each step of the G4 materiality
process is outlined below with the
outcome shown in the table on
the following page.
These steps involve detailed
engagement to determine the ranking
of Gold Fields’ material sustainability
issues. Senior executives at the
Company, including its regional
operations, and representatives of
external stakeholders - including
industry, government, community and
environmental organisations - were
briefed on the GRI process and asked
to evaluate all G4 aspects in terms of
importance to Gold Fields and its
stakeholders. This took the form of a
ranking with 1 being the most critical
to Gold Fields and its stakeholders,
and 10 considered not material at all.
Once these rankings had been made
they were averaged and a score
reached for each aspect. A score
between 1 and 5 means that these
issues are material to Gold Fields.
Scores between 5 and 10 suggest
that internal and external stakeholders
consider these issues of less material
importance to Gold Fields and its
stakeholders. However, this does not
mean that they will not be addressed
by our management team when the
issues arise.
The outcome – depicted in the table
alongside – ranks health and safety,
water management, social licence
to operate and management of
environmental issues as the key GRI
aspects that internal and external
stakeholders consider most material
to Gold Fields and its wider
stakeholder base.
44
❯ Winder house at South Deep
The Gold Fields Integrated Annual Report 2015
Flow from operating environment to risks, materiality and strategy
Prioritised materiality issues
Initial research
and engagement
Development
of initial results
Integration of
feedback
Development
of the final
materiality
results
1
P
E
T
S
2
P
E
T
S
3
P
E
T
S
4
P
E
T
S
❯ Review of current sustainability issues facing the gold mining sector and Gold Fields footprint countries
❯ Preliminary engagement with internal discipline experts
❯ Review of ERM system outputs
❯
Prioritisation of all GRI G4 aspects – in line with the G4 materiality assessment criteria
❯ Presentation of initial results to key internal stakeholders
❯ Presentation of initial results to key external stakeholders
❯ Collation and adjustment of results
❯ The setting of ‘boundaries of impact’ for each GRI G4 aspect
❯
Categorisation and consolidation of GRI G4 aspects into higher-level, Gold Fields-specific ‘issues’
❯ Sign-off of the final assessment results by ExCo
Prioritised material issues
Cluster
Health and safety
Water management
Social licence to operate
Managing environmental issues across the lifecycle
Workforce
Compliance
Government relations
Community value distribution
Total value distribution
Employee development
Industrial relations
Human rights
Energy and carbon management
General grievance mechanisms
Equal remuneration
Human rights due diligence on investments
Supply chain management
Resettlement
Biodiversity
Child/forced labour and freedom of association
Materials
Market regulation
Product impacts
Score
2.3
2.7
2.9
3.2
3.5
3.5
3.7
3.8
3.8
4.0
4.4
4.5
4.6
4.7
5.0
5.1
5.6
5.7
5.8
6.5
6.5
7.0
8.0
45
The Gold Fields Integrated Annual Report 2015
2.5 risk and materiality (continued)
Group and regional risk tables
Gold Fields – Top 10 risks
m
u
m
x
a
M
i
I
Y
T
R
E
V
E
S
6
7
9
5
1
2
3
10
4
8
Minimum
Maximum
PROBABILITY
Top 10 risks in 2015 – Mitigating strategies
2015 riSK
DESCriPTiON
1
2014: 1
South Deep – Failure to
deliver the operational
plan and loss of
investor confidence
MiTiGATiNG
STrATEGiES
❯ Core focus on
getting the basics
right continues to be
implemented during
the year
❯ Working towards cash
breakeven by the end
of 2016
❯ Fit-for-purpose
organisational design
and new management
team appointed with
strong mechanised
mining experience
❯ Introduction and
implementation of a
new regional pillar
design and mining
method (high-profile
de-stress mining)
2
2014: 2
Lower price and
currency volatility
❯ Updated metal prices
used for 2016 and
2017 mine planning
❯ Ongoing portfolio
optimisation to ensure
cash-generation
❯ Business structured to
generate sustainable
free cash flow at a
lower gold price
❯ Business Process
Re-engineering and
continuous focus on
cost control and cash
generation
3
2014: 4
4
2014: 3
5
2014: 6
replacing Mineral
resources and
reserves at
international operations
Failure to achieve
annual operational
production and free
cash flow plans
regulatory uncertainty
in South Africa and
Ghana
❯ Comprehensive
near-mine exploration
programmes in place
❯ M&A strategy to
identify opportunities
❯ Salares Norte, 2016
budget approved for
further drilling
❯ Comprehensive
❯ Supporting the
business planning
cycle implemented
in 2015 to improve
accuracy and delivery
of plans
❯ Operational risk
assessments
conducted –
mitigations in place
to reduce impact of
potential interruptions
Chamber of Mines in
its negotiations and
legal proceedings
regarding BEE
ownership to ensure
the security of mining
licences (AFR – p41)
❯ Lobbying through the
Chamber to influence
the development of the
MPRDA Amendment
Act
❯ Continued compliance
by South Deep with
the provisions of the
Mining Charter and
Social and Labour
Plans
❯ Ongoing engagement
and lobbying with the
Ghana Government to
finalise the Investment
Agreement
Severity
Severity
Severity
Severity
Severity
riSK
rANKiNG
Probability
❯
❯
46
❯
❯
Probability
Probability
❯
❯
❯
❯
Probability
❯
Probability
❯
The Gold Fields Integrated Annual Report 2015 2014 Risks – How we performed in 2015
2014 riSK rATiNG
1
South Deep
– failure to
deliver the
business plan
Despite the significant financial and operational
performance improvement at South Deep during 2015,
this remains the Group’s top risk
2
Lower gold
price and
volatility
3
4
Replacement of
Reserves and
Resources at
international
ops
Non-
achievement of
15% FCF
margin at
US$1,300/oz
The continued decline in both gold and copper prices
during 2015 ensured that this remains a high risk
Since four out of seven international operations reported
lower Reserves (after depletion) in 2015 this is now a
higher risk
Despite the better operational and cost performance in
2015 this risk remains at a high level amid the lower
gold price
5
Loss of social
licence to
operate
Social and economic pressures from communities remain
a pressing issue at our South African, Peruvian and
Ghanaian mines
How we performed1
100
80
60
40
20
0
❯
❯
❯
❯
❯
1
8
1
8
0
8
0
8
2
7
0
7
2
7
3
6
0
6
0
6
1
2015
2
2014
3
4
5
1 The risk rating in this graph is based on our severity and probability
matrix. Both are rated from one to 10 and the result is a product of the
two ratings for each risk.
6
2014: 5
7
2014: 14
8
2014: 9
9
2014: 11
10
2014: 7
Loss of social licence
to operate
Level of debt and debt
service costs
Labour relations at
South Deep
Water discharges/
pollution and supply
Security of power
supply and cost
of energy
❯ Strong focus on paying
down debt through
cash generation from
operations
❯ Targeting a net debt/
EBITDA ratio of 1.0
❯ Restructuring of
existing debt
❯ Enhanced and
ongoing engagement
strategies in place
❯ Robust performance
management
processes being
applied
❯ Implementation
of improved
communication
structures and
channels
❯ Ongoing focus on
growth opportunities
in lower risk mining
destinations
❯ Fit-for-purpose
community relations
structures in
operations and regions
❯ Group review of
community relations
strategies, plans,
progress and
structures
❯ Implementation of
community investment
and Shared Value
projects in Ghana,
Peru and South Africa
❯ Strict and focused
compliance with
environmental
management
requirements in all
regions
❯ All operations are ISO
14001 certificated
❯ Independent
environmental and
legal due diligence
carried out to assess
Group-wide tailings
storage facilities
❯ Integrated post-
closure water
management plans
to be in place for all
regions
❯ Five-year energy and
carbon plans built into
operational plans for
implementation
❯ Continued investigation
into the feasibility of
renewable energy
options
❯ Agreement with Genser
Energy for the supply
of power in Ghana
being implemented and
monitored
❯ Load curtailment
arrangements at South
Deep implemented
❯ South Deep 40MW
solar photovoltaic (PV)
project in RFP phase
Severity
❯
❯
Severity
❯
❯
Probability
Probability
Severity
❯
Probability
❯
Severity
❯
❯
Severity
❯
❯
Probability
Probability
47
The Gold Fields Integrated Annual Report 2015
2.5 risk and materiality (continued)
Group and regional risk tables
Top 5 risks in 2015 – Americas region
Top 5 risks in 2015 – Australia region
1
m
u
m
x
a
M
i
I
Y
T
R
E
V
E
S
3
4
5
1
2
2
3
4
5
PROBABILITY
PROBABILITY
Maximum
Minimum
Maximum
DESCriPTiON WiTH MiTiGATiNG STrATEGiES
riSK
DESCriPTiON WiTH MiTiGATiNG STrATEGiES
Erosion of free cash flow, sustained low copper and gold
prices and cost inflation
❯ Enhanced business planning process and continued delivery of
the operational plan
❯ Improved understanding of operational risks and
implementation of effective mitigation
❯ Continued focus on cost control and reduction measures
Social pressures, conflicts and community expectations
❯ Social pressures around Las Tomas spring relocation, despite
regulatory approval
❯ Pro-active community and stakeholder engagement
❯ Properly planned contingencies in place for conflict
❯ Stringent follow-up and feedback on all community
commitments
❯ Implement contingency plan for a potential social conflict
increase in regulatory scrutiny, sanctioning process and
inspections
❯ Process in place to challenge sanctions and penalties
❯ Strict compliance with regulations through internal auditing and
constant monitoring
Government/political instability
❯ Continued dialogue and engagement with authorities.
❯ Active participation in Peru’s National Chamber of Mining, Oil
and Energy and local Chamber of Commerce
Houses in very serious conditions
❯ Voluntary programme to repair houses in Hualgayoc at high
risk of collapse
1
2
3
4
5
reserve life at all operations
❯ Near-mine exploration spend increased to A$86 million to
delineate further reserves budgeted in 2016
❯ Ongoing business improvement to achieve cost savings,
improve operating margins and improve the Resource cut-off
grade
❯ M&A strategy – opportunities being considered
Failure to achieve delivery against operational plans
❯ Ongoing improvements to mine plan accuracy and operational
delivery
❯ Operational risk assessments conducted to reduce potential
business interruptions
❯ Weekly, monthly and quarterly monitoring of performance
Australian gold price
❯ Ongoing monitoring and review of compliance to annual
operational plans on all sites
❯ Monitor relationship between Australian Dollar and US gold
price
❯ Development and implementation of margin improvement
programmes
Native title at Kambalda
❯ Appeal heard on 25 May 2015 – judgment reserved
❯ Strategy in response to adverse decision, including further
appeal process if required.
Ongoing safety performance
❯ Vital behaviours programme rolled out and producing good
results
❯ Active Visible Felt Leadership training for all managers
❯ Review undertaken to consolidate safety initiatives for 2016
m
u
m
x
a
M
i
I
Y
T
R
E
V
E
S
Minimum
riSK
1
2
3
4
5
48
The Gold Fields Integrated Annual Report 2015 Top 5 risks in 2015 – South African region
Top 5 risks in 2015 – West African region
m
u
m
x
a
M
i
I
Y
T
R
E
V
E
S
Minimum
riSK
1
3
4
2
5
m
u
m
x
a
M
i
I
Y
T
R
E
V
E
S
1
2
3
4
5
PROBABILITY
PROBABILITY
Maximum
Minimum
Maximum
DESCriPTiON WiTH MiTiGATiNG STrATEGiES
riSK
DESCriPTiON WiTH MiTiGATiNG STrATEGiES
1
Failure to achieve the South Deep operational plan and
loss of investor confidence
2
3
4
5
❯ Align planning process with realistic productivities
❯ Core focus on getting the basics right continues to be
implemented
❯ Identification of 68 business improvement projects -
implementation commenced
❯ Improve production output by acquiring additional and
appropriate staff and fleet resources
Geotechnical risk:
❯ Changes in mining method
❯ Seismicity
❯ Secondary support and backfill
❯ Implemented Geotechnical Review Board recommendations,
including revised support strategies, mining sequence, pillar
configuration changes and improved modelling capabilities
❯ Introduction of high profile de-stress stoping
❯ Full plant tailings commissioned and utilised to reduce backfill
backlog
❯ Initiated analysis of secondary support requirements
Union and labour relations
❯ Extensive union engagement and union re-basing strategy
❯ Wage negotiations successfully concluded outside the
Chamber of Mines central bargaining unit
❯ New engagement structures and higher frequency of
engagement
Leadership capabilities
❯ Retention of individuals in leadership positions
❯ Skills deficit addressed through the appointment of 146
people in core disciplines in 2015
Loss of social licence to operate and community activism
❯ Meet Mining Charter and Social and Labour Plan
commitments
❯ Fit-for-purpose community relations and stakeholder
engagement structure in place
❯ Five-year community relations strategy prepared for
implementation in 2016
❯ Implementation of two Shared Value projects focused on
Mathematics and Science education and local community
procurement
❯ Alliance with Sibanye Gold to continue into 2016
❯ Collaboration with South Deep Community Trusts in their
strategy formulation and implementation
❯ Implementing a water management plan at South Deep
❯ Develop stakeholder engagement plan and strategy for the
nearby community of Thusanang
1
2
3
4
5
Tightened fiscal policies by government
❯ Investment Agreement negotiation and implementation
❯ Frequent engagement with government and lobbying via the
Chamber of Mines
❯ Strict adherence to Bank of Ghana foreign exchange
regulations to ensure compliance
Lower gold price, currency fluctuations and increased
input costs
❯ Ongoing implementation of business process re-engineering
initiatives
❯ Evaluate future options for Damang – decision in mid-2016
❯ Cost containment
❯ Fit-for-purpose structure in place with regular reviews
❯ Renegotiate strategic supplier contracts
Erratic power supply and load shedding
❯ Independent Power Purchase Agreement with Genser Energy
❯ Damang and Tarkwa power plants to be commissioned in
2016
❯ Ongoing consultations/engagement with national electricity
authorities
❯ Increase generation capabilities from back-up generators
Loss of environmental and social licence to operate
❯ Consideration of regulatory requirements during planning
processes
❯ Frequent engagement with the Environmental Protection
Agency (EPA)
❯ Community awareness campaigns.
❯ In-depth preparation for EPA’s annual Akoben environmental
audits
increased stakeholder expectations
❯ Working with employees to improve productivity as a
trade-off for real wage rises
❯ Stakeholder engagement
❯ Shared Value rollout
❯ Continued community investment programmes
49
The Gold Fields Integrated Annual Report 2015 The Gold Fields Integrated Annual Report 2015
Focus areas in the 2015 Group
performance scorecard
Financial
Business optimisation
Social licence to operate
People
p51 – 58
p59 – 88
p89 – 120
p121 – 136
50
❯ Storage facility at Cerro Corona
The Gold Fields Integrated Annual Report 2015
3
Financial focus
3.1
Introduction
3.2 Strategic focus areas
❯ Free cash flow
❯ Reducing debt
❯ Dividends
❯ Improving investor confidence
❯ Share price performance
p52
p57
p57
p57
p57
p57
p58
51
3.1 Financial focus – Introduction
Gold Fields' financial strategy has a
singular focus – growing the margin
and free cash flow (FCF) for every
ounce of gold produced. This has
long replaced the traditional focus on
growth in production and reserve
ounces and is aimed at turning the
Group into a focused, lean and
globally diversified gold mining
company that generates significant
FCF and provides investors with
superior leverage to the price of gold,
even when gold is trading at its
current low levels.
Our priorities for the cash we
generate include:
1. Rewarding our shareholders with
dividends
Our policy is to pay out between
25% and 35% of our normalised
earnings as dividends
2. Improving our balance sheet by
paying down debt
Our target is to further and
consistently reduce our net debt
and net debt to Earnings before
interest, taxes, depreciation and
amortisation (EBITDA) ratio
3. Pursuing accretive acquisitions
Our preference is for the
acquisition of in-production
ounces that will contribute
positively to EBITDA and cash
flow from the outset
Our strategy is embodied in our
overarching objective of generating
at least a 15% FCF margin at a
notional long-term planning gold
price of US$1,300/oz, which
translates to an All-in Cost (AIC)
breakeven level of approximately
US$1,050/oz. The Group's FCF
margin for 2015 was 8% despite the
fact that, at US$1,140/oz the actual
annualised gold price received was
12% below the US$1,300/oz
long-term planning price. If the price
received for the year was normalised
to US$1,300/oz, then the free cash
flow margin would have been 15%
– in line with our stated guideline.
Details of the Group’s production
and cost performance are contained
in the Operational Performance
Overview (p61 – 67).
2015 financial performance
During 2015, the ongoing impact of
Gold Fields’ transformation process
was reflected in its positive financial
performance, which enabled the
Group to improve its cash reserves,
balance sheet and debt position and
to continue to reward shareholders
with dividends, despite the lower
gold prices.
The financial highlights for Gold Fields during 2015 were:
Average US$ gold price received
Average A$ gold price received
Average Rand gold price received
Revenue
AIC
AIC excluding South Deep
Net operating costs
Capital expenditure
Net cash flow1
Free cash flow margin
Net debt
Net debt/ EBITDA ratio
Normalised earnings
Total dividend payment
2015
2014
2013
US$1,140/oz
A$1,541/oz
R478,263/kg
US$1,249/oz
US$1,386/oz
A$1,404/oz
R441,981/kg
A$1,446
R434,915/kg
US$2,545 million
US$2,869 million
US$2,906 million
US$1,026/oz
US$944/oz
US$1,087/oz
US$1,020/oz
US$1,312/oz
US$1,040/oz
US$1,456 million
US$1,678 million
US$1,667 million
US$634 million
US$609 million
US$739 million
US$123 million
US$235 million
(US$235 million)
8%
13%
n/a
US$1,380 million
US$1,453 million
US$1,735 million
1.38
1.30
1.50
US$45 million
US$85 million
US$58 million
R0.25/share
R0.40/share
R0.22/share
Dividend as % of normalised earnings
1 Net cash flow from operating activities less net capital expenditure and environmental payments
34%
34%
30%
52
The Gold Fields Integrated Annual Report 2015 During 2015, net revenue decreased
by 11% from US$2,869 million in
2014 to US$2,545 million, as a result
of lower production and the 9% drop
in the average gold price received.
Net operating costs declined by 13%
to US$1,456 million as a result of the
17% weakening in the Rand/US
Dollar and Australian/US Dollar
exchange rates, the lower oil price
and good cost control. (p62)
The Group All-in Sustaining Costs
(AISC) of US$1,007/oz and total AIC
of US$1,026/oz in 2015 compared
with US$1,053/oz and US$1,087/oz
in 2014. These lower costs were due
to lower net operating costs, the
weaker average Rand/US Dollar and
Australian/US Dollar exchanges,
partially offset by lower by-product
credits and higher capital
expenditure. Operating profits fell
from US$1,191 million in 2014 to
US$1,089 million in 2015.
Other salient features during 2015
included:
❯ Asset impairments and write-offs
of US$213 million including
impairments at Darlot
(US$14 million), Damang
(US$36 million), scrapping of
assets no longer in use at Cerro
Corona (US$8 million) and the
Arctic Platinum project in Finland
(US$39 million) as well as
impairments to the Group’s
Gold price in various currencies
(Index: 1 Jan 2015 = 100)
investment in the Far Southeast
project in the Philippines
(US$101 million) and Hummingbird
Resources (US$15 million)
❯ Royalty payments of US$76 million
in 2015 compared with
US$86 million in 2014
❯ A rise in capital expenditure from
US$609 million in 2014 to
US$634 million in 2015
❯ An increase in the taxation charge
to US$247 million (2014:
US$118 million), mainly due to
impairments of deferred tax assets
of US$68 million at Cerro Corona
and US$37 million at Damang,
along with a US$32 million charge
related to the weakening of the
Peruvian Nuevo Sol
As a result of the above, net losses
attributable to the Gold Fields
shareholders amounted to
US$242 million in 2015 compared
with net earnings of US$13 million in
2014 leading to a headline loss of
US$28 million in 2015 compared
with earnings of US$27 million in
2014. Normalised earnings fell
from US$85 million in 2014 to
US$45 million in 2015.
impact of weaker currencies
In Australia and South Africa, Gold
Fields receives its gold revenue in
foreign currency terms. As a result
of a significant weakening in the
Australian Dollar and the South
160
140
120
100
80
J
F
M
A
M
J
J
2015
A
S
O
N
D
J
M
F
2016
US$/oz
A$/oz
R/oz
African Rand during 2015 this
offered the operations in these
countries a measure of protection
against the weaker US Dollar gold
price when converting their revenues
to local currency. The impact has
been computed as follows:
❯ Australia: During 2015 the
Australian Dollar weakened by
17% against the US Dollar and the
average gold price received by our
Australian mines therefore rose
from A$1,404/oz in 2014 to
A$1,541/oz in 2015. Taking into
account the 43,000 ounces drop
in production in the region last
year, this had the impact of
boosting revenue by A$75 million.
❯ South Africa: The South African
Rand weakened by 17% against
the US Dollar during 2015 and the
average Rand gold price received
strengthened from R441,981/kg in
2014 to R478,263/kg in 2015 as a
result. South Deep’s revenues in
2015 benefited by around
R190 million, taking into account
the marginal drop in production.
During Q4 2015, the average Rand
gold price received averaged just
over R500,000/kg, assisting South
Deep to operate cash positively for
the first time in November and
December.
A weaker local currency means that
imported costs rise at the same time,
which can push up the costs of the
heavy equipment, machinery and
other components that we mostly
import at our South African and
Ghanaian operations.
A detailed analysis of our financial
performance is provided in the
Management’s Discussion and
Analysis of the Financial
Statements in the 2015 Annual
Financial Report (p6 – 33).
The Consolidated Income
Statement, Statement of Financial
Position and Cash Flow Statement
– extracted from the Annual
Financial Report 2015 – are
provided on the pages that follow.
53
The Gold Fields Integrated Annual Report 2015 3.1 Financial focus – introduction (continued)
Consolidated income statement
for the year ended 31 December 2015
Figures in millions unless otherwise stated
Revenue
Cost of sales
Net operating profit
Investment income
Finance expense
Loss on financial instruments
Foreign exchange gains
Other costs
Share-based payments
Long-term incentive plan
Exploration expense
Share of results of equity accounted investees after taxation
Restructuring costs
Impairment of investments and assets
Profit on disposal of investments
Profit on disposal of Chucapaca
Loss on disposal of property, plant and equipment
Profit before royalties and taxation
Royalties
Profit before taxation
Mining and income taxation
(Loss)/profit for the year
(Loss)/profit attributable to:
– Owners of the parent
– Non-controlling interest holders
(Loss)/earnings per share attributable to ordinary shareholders of the
Company:
Basic (loss)/earnings per share – cents
Diluted basic (loss)/earnings per share – cents
UNiTED STATES DOLLAr
2015
2014
2 545,4
(2 066,1)
479,3
6,3
(82,9)
(4,7)
9,5
(21,2)
(10,9)
(5,3)
(53,5)
(5,7)
(9,3)
(221,1)
0,1
–
(0,1)
80,5
(76,0)
4,5
(247,1)
(242,6)
(242,1)
(0,5)
(242,6)
(31)
(31)
2 868,8
(2 334,4)
534,4
4,2
(99,2)
(11,5)
8,4
(62,5)
(26,0)
(8,7)
(47,2)
(2,4)
(42,0)
(26,7)
0,5
4,6
(1,3)
224,6
(86,1)
138,5
(118,1)
20,4
12,8
7,6
20,4
2
2
54
The Gold Fields Integrated Annual Report 2015 Consolidated statement of financial position
at 31 December 2015
Figures in millions unless otherwise stated
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Inventories
Equity accounted investees
Investments
Environmental trust funds
Deferred taxation
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets held for sale
Total assets
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital
Share premium
Other reserves
Retained earnings
Non-controlling interest
Total equity
Non-current liabilities
Deferred taxation
Borrowings
Provisions
Long-term incentive plan
Current liabilities
Trade and other payables
Taxation and royalties
Current portion of borrowings
Total equity and liabilities
UNiTED STATES DOLLAr
2015
2014
4 969,6
4 312,4
295,3
132,8
129,1
10,9
35,0
54,1
908,1
298,2
168,9
440,0
1,0
5 764,9
4 895,7
385,7
132,8
252,4
5,5
30,4
62,4
1 092,8
368,3
226,5
458,0
40,0
5 877,7
6 857,7
2 656,1
58,1
3 412,9
(2 262,2)
1 447,3
111,9
2 768,0
2 545,6
487,3
1 761,6
284,1
12,6
564,1
427,6
77,8
58,7
3 538,8
57,9
3 412,9
(1 636,5)
1 704,5
124,5
3 663,3
2 481,3
387,0
1 765,7
320,3
8,3
713,1
509,7
58,2
145,2
5 877,7
6 857,7
55
The Gold Fields Integrated Annual Report 2015 3.1 Financial focus – introduction (continued)
Consolidated statement of cash flows
for the year ended 31 December 2015
Figures in millions unless otherwise stated
UNiTED STATES DOLLAr
2015
743,9
1 005,4
5,9
–
43,6
1 054,9
(86,8)
(76,9)
(118,4)
772,8
(28,9)
(15,1)
(12,1)
(1,7)
(651,5)
(634,1)
3,1
–
(3,0)
–
(17,5)
(88,3)
–
506,0
(594,3)
4,1
(22,1)
458,0
440,0
2014
808,5
1 061,3
3,6
0,1
83,7
1 148,7
(103,8)
(88,8)
(105,3)
850,8
(42,3)
(29,8)
(10,6)
(1,9)
(530,9)
(608,9)
4,9
81,0
(4,4)
6,4
(9,9)
(125,9)
2,0
463,9
(591,8)
151,7
(18,7)
325,0
458,0
Cash flows from operating activities
Cash generated by operations
Interest received
Dividends received
Change in working capital
Cash generated by operating activities
Interest paid
Royalties paid
Taxation paid
Net cash from operations
Dividends paid
– Ordinary shareholders
– Non-controlling interests holders
– South Deep BEE dividend
Cash flows from investing activities
Additions to property, plant and equipment
Proceeds on disposal of property, plant and equipment
Proceeds on disposal of Chucapaca
Purchase of investments
Proceeds on disposal of investments
Environmental trust funds and rehabilitation payments
Cash flows from financing activities
Equity contributions from non-controlling interest holders
Loans raised
Loans repaid
Net cash generated
Effect of exchange rate fluctuation on cash held
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
56
The Gold Fields Integrated Annual Report 2015 3.2 Financial focus – Strategic focus
areas
Free cash flow
During 2015, Gold Fields generated
a US$123 million net cash flow
compared to US$235 million in
2014. This was achieved despite the
fact that the gold price for 2015, at
US$1,140/oz, was 9% lower than
the US$1,249/oz realised in 2014.
Gold Fields has generated positive
net cash flow in all but one of the
past 10 quarters. A free cash flow
(FCF) margin of 8% was achieved
compared with 13% in 2014. This is
a good achievement in view of the
lower gold price received. Indeed, if
the price received is normalised to
our long-term planning price of
US$1,300/oz the FCF margin would
have been 15%.
In fact, to put our net cash flow
generation in context, during 2015
our international mines in Australia,
Ghana and Peru collectively
generated US$334 million of net
cash flow. Of that US$80 million was
re-invested into our developing
South Deep mine in South Africa,
which is not yet at a steady state of
production, and US$73 million was
used to further reduce our debt.
This demonstrates the robustness of
our international portfolio of assets
and the improved cash generating
potential of the portfolio once the
South Deep mine achieves cash
breakeven level, which is targeted
for the end of 2016.
Reducing debt
Owing to the fact that, as a gold
producer, we are essentially a price
taker for the primary product that we
produce, we have long held the
position that our debt comfort zone
is a net debt to EBITDA ratio of
approximately 1.0 times.
During 2015 our net debt decreased
by US$73 million from US$1,453 million
at the end of December 2014 to
US$1,380 million at the end of
December 2015, which resulted in a
net debt to EBITDA ratio of 1.38.
This is in addition to the reduction of
our net debt by US$282 million to
US$1,453 million during 2014.
Net debt as a percentage of
enterprise value increased to 39%
at the end of December 2015,
compared to 24% at the end of
December 2014, amid the decline in
our market value during the year.
The net debt reduction during 2014
and 2015, together with the
agreement reached with our group
of bankers in 2014, to amend
and extend the maturity date of
commitments totalling
US$745 million, by two years to
November 2017, on the same terms,
has significantly improved the
Group’s solvency and liquidity.
At the end of 2015, Gold Fields had
committed and uncommitted loan
facilities totalling US$2,648 billion
and R3.947 billion, of which
US$0.844 billion and R3.695 billion
respectively are unutilised. The
facilities will mature between 2017
and 2020, unless they are refinanced
before their maturity dates.
Subsequent to year-end Gold Fields
made a tender offer to buy back
US$200 million of our US$1 billion
2020 bond as the bonds were trading
at a discount on the secondary
market. Upon expiry of the tender
offer on 25 February 2016 Gold Fields
opted to accept US$148 million of the
bonds tendered at a price of 88% of
the notional value. This resulted in a
reduction in net debt of approximately
US$18 million. Gold Fields intends
holding the bonds acquired until their
maturity date.
This debt buy back was funded
through a successful R2.3 billion
(US$150 million) equity raising, by way
of a private placement to institutional
investors on 18 March 2016. The
effect of these transactions will be a
reduction in the net debt to EBITDA
ratio from 1.38x as at 31 December
2015 to 1.21x and gets us closer to
our strategic objective of reducing the
ratio to 1.0x, though the timing of
achieving this objective also depends
on the gold price.
Dividends
Gold Fields has a long and well-
established ‘dividends first’ policy of
rewarding shareholders by paying
out between 25% – 35% of
normalised earnings as dividends.
This policy is viewed as an important
element of Gold Fields’ investment
case and we have consistently
honoured this commitment with an
average payout of approximately
30% of normalised earnings every
year over the past six years, one of
the highest pay-outs in the global
gold mining sector.
Our strong cash generation during
2015 has enabled the Group to
declare a final dividend of
21 SA cents per share for 2015.
Together with the interim dividend of
4 SA cents per share (for the first six
months of the year ended 30 June
2015), this brings the total dividend
for the year to 25 SA cents per
share, which translates to 34% of
normalised earnings for the year.
Improving investor and
analyst confidence
We seek to position Gold Fields as a
focused, lean and globally diversified
gold mining company that generates
significant free cash flow, and
provides investors with superior
leverage to the price of gold.
Gold Fields today is a significantly
smaller, more focused and global
company than it was before 2013.
With the unbundling of our
conventional South African mines
into Sibanye Gold in 2013 we have
created a company that is today
exclusively focused on mechanised
mining. Shareholders have also
benefited from the creation of
Sibanye Gold, whose share price has
outperformed that of most other
gold counters on the Johannesburg
Stock Exchange.
Gold Fields’ re-organisation was
further enhanced by the successful
restructuring and rightsizing of our
corporate, regional and operational
structures over the past three years,
together with the reduction of our
workforce around the world.
57
The Gold Fields Integrated Annual Report 2015 3.2 Financial focus – Strategic focus areas (continued)
Over the past three years, Gold
Fields has successfully transformed
itself into a company that
consistently generates FCF despite
the steady declines in the price of
gold during this time. In 2012 and
2013, Gold Fields had net cash
outflows of US$280 million and
US$235 million respectively. In 2014,
despite a 10% decline in the average
gold price from US$1,386/oz in 2013
to US$1,249/oz, cash flow from
operating activities – after taking
account of net capital expenditure
and environmental payments –
improved from an outflow of
US$235 million to an inflow of
US$235 million, a positive swing of
US$470 million. In 2015, we
managed to generate US$123 million
in net cash flow from operating
activities, despite a further 9%
decline in the gold price
from US$1,249/oz in 2014 to
US$1,140/oz in 2015.
The one outstanding issue that
remains to be fully addressed, is to
deliver the South Deep mine in South
Africa and release the intrinsic value
of the asset, which has the world’s
second largest gold ore body. The
achievement of cash breakeven for
South Deep, which is targeted for
the end of 2016, is expected to not
only further enhance the Group’s
capacity to improve FCF generation
but, in particular, to further improve
market confidence in Gold Fields.
A detailed update on the financial,
operational and development
performance of South Deep during
2015 is provided on page 73.
Share price performance (Feb 2013 – Feb 2016)
(Index: 11 Feb 2013 = 100)
Share price performance (Jan 2015 – Feb 2016)
(Index: 1 Jan 2015 = 100)
150
100
50
0
2013
2014
2015
2016
200
150
100
50
0
J
F M A M J
J
A
S O N
D
J
F M
2015
2016
Combined Gold Fields + Sibanye
Philadelphia Gold index
Gold price
JSE Gold index
Gold Fields
Philadelphia Gold index
Gold price
JSE Gold index
Share price performance
Gold Fields has made a commitment
to its investors to offer leverage to
the gold price. This commitment was
one of the main reasons why, in
2012, Gold Fields embarked on its
major restructuring drive to enhance
cash flows.
Since then Gold Fields has
fundamentally transformed its
business and become a focused,
modern, mechanised mining
operation, significantly reducing its
cost base and thus offering greater
cash returns. A key pillar of this
transformation was the unbundling of
Gold Fields’ legacy mines in South
Africa into Sibanye Gold – this was
announced on 1 November 2012
and took effect on the stock
exchanges on which Gold Fields is
listed on 11 February 2013.
This transformation has, however,
coincided with a slide in the gold
price from levels of around
US$1,650/oz at the beginning of
2013 to approximately US$1,050/oz
at the end of 2015. By the end of
February 2016, the price had
recovered to around US$1,200/oz.
The long-term share price
performance of both Gold Fields and
Sibanye Gold has validated this
transformation journey. Just before
the announcement of the Sibanye
Gold unbundling on 28 November
2012, the Gold Fields share price was
trading at R102.73/share. Since then
Sibanye’s share price in particular has
performed strongly, rising by 320% to
R57/share over the period. The
combined share price of Gold Fields
and Sibanye Gold on 29 February
2016 was valued at R122.56/share
– an increase of 19.3% on its
pre-announcement level.
Over the same period of time the
gold price declined by 25.8%, the
JSE gold index – representing gold
miners listed on the JSE – fell by
5.3%, and the Philadelphia gold
index – representing gold miners
listed on the New York Stock
Exchange – decreased by 57%.
This represents a significant market
endorsement of the Gold Fields’
transformation decision.
Between 1 January 2015 and
29 February 2016, the Gold Fields
share price improved by just over
25%, once again outperforming the
gold price, which showed a 3.4%
gain. The Philadelphia gold index still
traded in negative territory, down
7%, but the JSE gold index has
improved by 81% as JSE-listed gold
miners received a boost by the
stronger Rand gold price.
58
The Gold Fields Integrated Annual Report 2015 4
p60
Focus on business optimisation
4.1 Introduction
4.2 Operational performance overview
4.3 Strategic focus areas
❯ Safety and wellness
❯ South Deep
❯ Quality portfolio of assets
❯ Growth in 2015
❯ Mineral Resource and Mineral
Reserve Statement
❯ Technology and innovation
p61
p68
p68
p73
p75
p77
p82
p88
❯ Processing plant at Damang
59
4.1 Business optimisation –
Introduction
Introduction
In 2015, Gold Fields consolidated its
position as a more focused, leaner
business and its portfolio is now
characterised by modern, fully
mechanised open-pit and
underground mining operations, with
diversified production spread across
eight mines in four countries.
This supports our broader strategy
focused on disciplined spending and
cash-generation rather than ounces
for ounces sake, enhancing the
Company’s ability to generate free
cash flow and delivering investors
value over and above the price of
gold through its dividend policy and
share price performance. As a result
of this proactive strategy, Gold Fields
has been in a favourable position to
weather current low gold prices.
Key operating statistics
Gold produced – attributable ('000 ounces)
Revenue (US$m)
AISC (US$/oz)
AIC (US$/oz)
Gold price (US$/oz)
Operating profit (US$m)
Operating costs (US$m)
Headline earnings (losses) (US$m)
Normalised earnings (US$m)
Net cash flow (outflow) (US$m)
Free cash flow margin (%)
1 Continuing operations
During 2015, Gold Fields continued
to focus on improving the cash-
generation performance of its
existing operations. This included:
❯ The avoidance of marginal ounce
mining, whilst protecting the
commercial sustainability of its
mines by eschewing high-grading
and investing in ore development
on an ongoing basis
❯ Enhanced cost-efficiency at all of
its operations
❯ Production and strategic planning
based on the delivery of healthy
free cash flow margins at lower
gold prices
❯ A back-to-basics strategy at the
South Deep mine, which is
showing early benefits in improving
its operational performance
Similarly, Gold Fields focused on life
extensions of its operations and the
sustained cash flow margin per
ounce of gold produced. This
process of active portfolio
management in 2015 resulted in:
❯ The continued focus on low-risk,
near-mine exploration activities as
opposed to early greenfields
exploration, which saw resources
increase by 13% in Australia
❯ Examining further cash-generative
acquisition opportunities aligned
with Gold Fields’ core
competencies
❯ The continued disposal of growth
projects that are marginal and
primarily focused on metals other
than gold
2015
2,159
2,545
1,007
1,026
1,140
1,089
1,431
(28)
45
123
8
2014
2,219
2,869
1,053
1,087
1,249
1,191
1,685
27
85
235
13
20131
2,022
2,906
1,202
1,312
1,386
1,239
1,679
(71)
58
(235)
n/a
20121
2,031
3,531
1,310
1,537
1,656
1,879
1,674
350
409
(280)
n/a
60
The Gold Fields Integrated Annual Report 2015 4.2 Business optimisation –
Operational performance overview
Group production and guidance
2016 Guidance
2015 Actual
2015 Guidance
2014 Actual
Prod
(Moz)
AISC
(US$/oz)
AIC
(US$/oz)
Prod
(Moz)
AISC
(US$/oz)
AIC
(US$/oz)
Prod
(Moz)
AISC
(US$/oz)
AIC
(US$/oz)
Prod
(Moz)
AISC
(US$/oz)
AIC
(US$/oz)
2.05
– 2.10
1,000
– 1,010
1,035
– 1,045
2.16
1,007
1,026
2.17
1,055
1,075
2.22
1,053
1,087
In 2015, Gold Fields’ attributable
gold production declined by 2.7%
to 2.16 million ounces (2014:
2.22 million ounces). This reflected:
❯ Higher production at St Ives in
Australia, South Deep in South
Africa and at Tarkwa in Ghana
❯ Lower production at Granny
Smith, Agnew, Darlot in Australia,
at Damang in Ghana and Cerro
Corona in Peru
Central to Gold Fields’ strategy of
growing our margin and maximising
FCF, is a relentless focus on
managing costs on an AIC basis.
During 2015, the Group recorded
AIC of US$1,026/oz, from
attributable gold equivalent
production of 2.16 million ounces.
Compared with 2014, the Group’s
AIC improved by 6% from
US$1,087/oz. If the South Deep
mine, which is not yet at steady-state
levels of production, is excluded from
the results for 2015, then the Group’s
AIC was US$944/oz.
The overall drop in Gold Fields’ costs
over the last three years is mainly
due to lower operating costs,
improved rationalisation and
restructuring as well as prioritisation
of growth capital expenditure
allocation.
Over the past few years, Gold Fields
has implemented a number of
cost-focused initiatives that
continued into 2015 and were pivotal
to lowering the Group’s cost base.
Production
What Gold Fields
guided for 2015:
2.17 million attributable gold
equivalent ounces
What Gold Fields
achieved in 2015:
2.16 million attributable gold
equivalent ounces
Costs
What Gold Fields
guided for 2015:
AISC of US$1,055/oz;
AIC of US$1,075/oz
What Gold Fields
achieved in 2015:
AISC of US$1,007/oz;
AIC of US$1,026/oz
Group and regional managed production
Australia
Peru
Ghana
South Africa
Group
2015
Actual
988.0
295.6
753.9
198.0
2,235.6
2015
%
44.2
13.2
33.7
8.9
100
2014
Actual
1,031.1
326.6
736.0
200.5
2,294.2
2014
%
44.9
14.2
32.1
8.7
100
These included:
❯ Stopping of marginal mining at all
of the Group’s mines
❯ The restructuring and rightsizing of
our corporate, regional and
operational structures, focused on
relocating operational responsibility
and accountability in the regions
and at the operations. Our overall
corporate costs have been reduced
to approximately US$10/oz,
which is amongst the lowest in the
industry
❯ A 12% reduction in our global
workforce between 2013 and
2015
❯ Restructuring of the Group’s
Growth and International Projects
division in late 2013 and the
divestment of associated
greenfields growth projects that
did not meet the Group’s 15% FCF
margin criteria
❯ The cancellation of all on- or
near-mine growth projects that
demonstrated inadequate returns
❯ The ongoing rationalisation and
prioritisation of capital expenditure
and the deferral of non-essential
capital, while not affecting the
sustainability of our mines’ ore
bodies
61
The Gold Fields Integrated Annual Report 2015 4.2 Business optimisation – Operational performance overview
(continued)
While the bulk of these initiatives
were initiated and implemented
during 2013 and 2014,
consolidations of the gains made
continued into and throughout 2015
through ongoing business process
re-engineering and general cost
savings. In particular the following
initiatives were implemented:
❯ The further rationalisation of our
growth portfolio during 2015 with
the sale of Gold Fields’ 51%
interest in the Woodjam project in
British Columbia (p77). The Group
is also looking to divest its holding
in the Arctic Platinum project in
Finland (p87)
❯ The stabilisation of our workforce
in 2015 after a net reduction of
12% in the preceding three years.
During 2015 Gold Fields had to
retrench 148 staff, led by
67 retrenchments each at our
Ghanaian and Australian
operations. However, at South
Deep we recruited 164 critical
skills in line with the rebasing
strategy at the mine
❯ Unlike in previous years, Gold
Fields did not cut back its capital
expenditure. With a focus on
extending the life of our ore bodies
at all our international mines we
raised overall Group capital
expenditure to US$634 million in
2015 from US$609 million in 2014.
Regional capital expenditure
included:
❯ Australia: Our Australian mines
increased capital expenditure from
A$304 million (US$274 million) in
2014 to A$372 million
(US$281 million) in 2015, largely
as a result of the rise in near-mine
exploration spending to A$91 million
(US$65 million) in 2015 (2014:
A$60 million (US$54 million))
❯ South Africa: Capital expenditure at
South Deep decreased from
R994 million (US$92 million) to
R848 million (US$67 million), despite
acquiring a number of new heavy
underground vehicles in 2015
❯ South America: At Cerro Corona
capital expenditure increased from
US$51 million to US$65 million amid
ongoing construction of new tailings
dams raises
❯ West Africa: Capital expenditure
increased from US$190 million in
2014 to US$221 million in 2015,
largely the result of new equipment
acquisition at Tarkwa
Effect of oil prices on AiC
For Gold Fields, the impact of the
lower oil price during 2015 was not
significant. This is because in Ghana
and Peru fuel price stability
mechanisms are followed by
government and short-term variations
in prices are not always passed onto
consumers and industry. All other
things being equal the impact of a
decrease of US$10 per barrel of Brent
crude on AIC is a reduction of US$18/oz
for Ghana, A$6/oz (US$5/oz) for
Australia and US$7/oz for Peru.
The Australian operations entered
into a hedge at a base price of
US$99.10 per barrel of Brent crude on
10 September 2014. On 26 November
2014, an additional hedge at a base
price of US$78.45 per barrel of Brent
crude was entered into. This resulted
in 100% of diesel requirements for the
March 2015 quarter and 75% of diesel
requirements for the remaining nine
months (April to December) of 2015
for Australia being hedged.
62
❯ Borehole drilling at our Australian operation
The Gold Fields Integrated Annual Report 2015 Group regional performance – overview
Americas region
Gold only produced (koz)
Copper produced (tonnes)
Gold-equivalent produced (koz)
AIC/AISC (US$/oz)
AIC/AISC gold-equivalent ounces (US$/oz)
2016
Guidance
2015
Actual
2015
Guidance
150
28
260
790
860
158.8
28.7
295.6
718
777
147
28
280
800
915
2014
Actual
150.8
32.3
326.6
316
702
Despite the significant 28% decline
in the price of copper during 2015,
Cerro Corona in Peru recorded a
relatively good performance with
total managed gold equivalent
production of 295,600 ounces which
was 6% better than the guidance for
2015 of 280,000 ounces. It was,
however, 9% lower than the
326,600 ounces produced in 2014,
mainly as a result of the lower copper
price (as a consequence of its
impact on gold-equivalent
production) and a planned decline in
gold and copper grades, as per the
life-of-mine plan.
Net operating costs decreased by
9% from US$160 million in 2014 to
US$145 million in 2015 mainly the
result of the lower Nuevo Sol
exchange rate against the US Dollar,
good cost management and lower
ore tonnes mined. Capital
expenditure increased from
US$51 million in 2014 to
US$65 million in 2015, mainly
related to the ongoing construction
of the tailings storage facility as well
as the construction of a new camp
as the existing camp will be flooded
later in 2016, as the tailings dam
expands.
AISC and AIC amounted to
US$718/oz in 2015 compared with
US$316/oz in 2014 – and, on a gold
equivalent basis, US$777/oz in 2015
compared with US$702/oz in 2014
– due to lower gold sold, lower
by-product credits and higher capital
expenditure, partially offset by lower
net operating costs.
The region reported net cash inflow
of US$35 million during 2015.
2016 Guidance:
❯ Gold only production: 150,000
ounces
❯ Copper production: 28,000 tonnes
❯ Gold equivalent production:
260,000 ounces
❯ AIC/AISC: US$790/oz
❯ AIC/AISC (gold-equivalent
production): US$860/oz
❯ Tailing Storage Facility at Cerro Corona
63
The Gold Fields Integrated Annual Report 2015 4.2 Business optimisation – Operational performance overview
(continued)
Australia region
St Ives
Agnew
Darlot
Granny Smith
Region
2016 Guidance
2015 Actual
2015 Guidance
2014 Actual
Prod
(Koz)
AIC/
AISC
(A$/oz)
1,380
(US$1,010)
1,350
(US$990)
1,660
(US$1,215)
1,170
(US$855)
1,330
(US$970)
350
223
58
270
901
Prod
(Koz)
371.9
236.6
AIC/
AISC
(A$/oz)
1,287
(US$969)
1,276
(US$959)
1,403
(US$1,057)
78.4
301.1
988.0
1,016
(US$764)
1,211
(US$912)
Prod
(Koz)
AIC/
AISC
(A$/oz)
1,300
(US$1,040)
1,190
(US$950)
350
260
1,420
(US$1,130)
83
1,050
(US$840)
1,210
(US$965)
290
983
Prod
(Koz)
AIC/AISC
(A$/oz)
361.7
270.7
83.6
315.2
1,031.1
1,289
(US$1,164)
1,096
(US$990)
1,353
(US$1,222)
896
(US$809)
1,124
(US$1,015)
Total AIC for the region of A$1,211/oz
(US$912/oz) in 2015 compared with
A$1,124/oz (US$1,015/oz) in 2014.
The region reported net cash inflow
of US$255 million during 2015. The
lower value of the Australian Dollar
against the US Dollar had a beneficial
impact on the region's performance
as the average gold price received
rose from A$1,404/oz in 2014 to
A$1,541/oz in 2015. Taking into
account the 43,100 ounce drop in
production in the region, this had
the impact of boosting revenue by
A$75 million.
Mine performances
St Ives had an outstanding year as it
started to make the transition from a
predominantly underground mine to
a predominantly open pit mine. Gold
production increased by 3% from
361,700 ounces in 2014 to
371,900 ounces in 2015, against
guidance of 350,000 ounces for the
full year. The increase in production
was mainly due to higher grades
mined from the new high grade
Invincible open pit, partially offset by
lower production from the Athena
underground mine which is
scheduled to close in early 2016.
Net operating costs decreased by
6% from A$313 million (US$282
million) in 2014 to A$293 million
(US$220 million) due to good cost
control. Total AIC of A$1,287/oz
(US$969/oz) in 2015 compared with
A$1,289/oz (US$1,164/oz) in 2014,
which was 1% better than guidance
of A$1,300/oz for the year.
The good cost performance at
St Ives was mainly due to the higher
production as well as tight cost
control, partially offset by higher
capital expenditure of A$152 million.
The higher capital expenditure was
associated with increased
exploration across the site; the
development of the Invincible open
pit mine; and the commencement
of the stripping campaigns at the
Neptune and A5 pits. These two pits
are expected to complement the
Invincible Pit as St Ives moves
towards being a predominantly open
pit operation after the closure of the
Athena underground mine.
St Ives generated net free cash flow
of US$119 million for the year.
A brief review of the mine's
brownfields exploration activity
during 2015 is on page 79.
During 2015 the Group's four mines
in Western Australia – St Ives,
Agnew, Darlot and Granny Smith –
collectively delivered a strong
operational performance, with gold
production of 988,000 ounces at an
AIC of A$1,211/oz (US$912/oz),
which was broadly in line with full
year guidance for the region of
983,000 ounces at an AIC of
A$1,210/oz (US$965/oz).
Compared to 2014, production
decreased by 4% from
1,031,100 ounces mainly as a result
of planned lower production from
Granny Smith, Agnew and Darlot,
offset by higher production from
St Ives. Both St Ives and Granny
Smith exceeded their guidance for
the year, compensating for Darlot
and Agnew, both of which delivered
below guidance.
Net operating costs in the region
decreased by 7% from A$799 million
(US$721 million) to A$747 million
(US$562 million), mainly due to
tight cost control, while capital
expenditure increased from
A$304 million (US$274 million) to
A$373 million (US$281 million)
following the opening up and
development of new ore sources
at the mines as well as higher
expenditure on near-mine exploration
across the region.
64
The Gold Fields Integrated Annual Report 2015 2016 Guidance:
❯ Gold production: 350,000 ounces
❯ AISC/AIC: A$1,380/oz
capital developments associated
with accessing the FBH and
Cinderella deposits.
A brief review of the mine's
brownfields exploration activity
during 2015 is on page 79.
(US$1,010/oz)
At Agnew, gold production
decreased by 13% from
270,700 ounces in 2014 to
236,600 ounces in 2015. The
reduced production was mainly due
to lower tonnes mined as well as
lower grades. The change to
sequence was caused mainly by
challenging geotechnical conditions
at Waroonga's Kim ore body, where
ground conditions necessitated
rehabilitation and extra ground
support. This resulted in slower rates
of mining in some higher grade areas
and the consequent substitution of
higher grade tonnages with lower
grade areas elsewhere in the
Waroonga complex.
Waroonga is in transition as the Kim
load matures. During the year the
new drive from the Kim decline to
the high grade Fitzroy, Bengal and
Hastings (FBH) ore bodies was
completed and development
activities commenced. Production
from FBH is scheduled to increase
during 2016. In addition, decline
development started to the
Cinderella ore body in the New
Holland complex. Cinderella
straddles the tenement boundary
between New Holland and
Waroonga and will be accessed
through the existing New Holland
infrastructure.
The lower production combined with
good cost control resulted in the net
operating costs decreasing from
A$191 million (US$173 million) in 2014
to A$188 million (US$141 million) in
2015. Total AIC for Agnew of
A$1,276/oz (US$959/oz) in 2015
compared with A$1,096/oz
(US$990/oz) in 2014, due to lower
gold production and higher capital
expenditure, partially offset by the
lower net operating costs. The higher
capital expenditure of A$97 million
was as a result of increased
expenditure on exploration as well as
Despite the difficult production
issues, Agnew generated
US$47 million of net free cash
during 2015.
A brief review of the mine's
brownfields exploration activity
during 2015 is on page 79.
2016 Guidance:
❯ Gold production: 223,000 ounces
❯ AISC/AIC: A$1,350/oz
(US$990/oz)
Darlot had a challenging year due to
the constraints of mining in scattered
remnant areas over a relatively large
footprint, while developing towards
the higher grade Lords South Lower
virgin ore body. As a consequence
gold production decreased by 6%
from 83,600 ounces in 2014 to
78,400 ounces in 2015 due to lower
tonnes mined and processed. This
was partially offset by higher grades
mined in the new Lords South Lower
deposit, where production
commenced during the second half
of the year.
Notwithstanding the difficulties
associated with mining in remnant
areas, Darlot is continuing its
strategy of self-funding a meaningful
exploration programme in order to
extend the mine's life and to find a
‘game changer’, which is targeted to
return the mine to a 15% free cash
flow margin.
Net operating costs decreased by
15% from A$93 million (US$84
million) in 2014 to A$79 million
(US$59 million) in 2015. Total AIC of
A$1,403/oz (US$1,057/oz) in 2015
compared with A$1,353/oz
(US$1,222/oz) in 2014, due to lower
gold output and higher capital
expenditure of A$27 million, partially
offset by lower operating costs.
Darlot generated US$11 million of
net free cash flow for the year.
2016 Guidance:
❯ Gold production: 58,000 ounces
❯ AISC/AIC: A$1,660/oz
(US$1,215/oz)
Granny Smith enjoyed another
strong operational performance
during 2015. Production guidance
anticipated a 5% decline in gold
production from the 315,200 ounces
in 2014 to 301,100 ounces in 2015,
but the mine managed to beat the
guidance by 4% instead.
The mine generated US$111 million
of net free cash for the year.
Attention to cost control and
efficiencies realised through a margin
improvement programme resulted in
a 7% decrease in net operating
costs from A$202 million
(US$183 million) in 2014 to
A$188 million (US$141 million) in
2015. Total AIC of A$1,016/oz
(US$764/oz) in 2015 compared with
A$896/oz (US$809/oz) in 2014 due
to the lower gold production and
higher capital expenditure, with these
effects being partially offset by the
lower operating costs.
The higher capital expenditure of
A$96 million was due to a record
programme of mine development
and a very substantial increase in
exploration activity. The mine
development programme saw 5.4km
of horizontal capital development
advanced (2014: 2.2km), providing
access to lower ore horizons at the
Wallaby mine. These zones will
provide the bulk of the operation's
ore for 2016.
A brief review of the mine's
brownfields exploration activity
during 2015 is on page 80.
2016 Guidance:
❯ Gold production: 270,000 ounces
❯ AISC/AIC: A$1,170/oz
(US$855/oz)
65
The Gold Fields Integrated Annual Report 2015 4.2 Business optimisation – Operational performance overview
(continued)
South Africa region
Gold only produced (kg/(koz))
AISC (R/kg (US$/oz))
AIC (R/kg (US$/oz))
2016
Guidance
8,000
(257)
550,000
(1,200)
575,000
(1,250)
2015
Actual
6,160
(198.0)
607,429
(1,490)
635,622
(1,559)
2015
Guidance
7,100
(228.0)
520,000
(1,400)
545,000
(1,470)
2014
Actual
6,237
(200.5)
538,254
(1,548)
602,363
(1,732)
At the South Deep mine, production
remained steady during 2015 with
production of 198,000 ounces
compared with 200,500 ounces in
2014, mainly due to lower grades,
partially offset by increased volumes.
Higher wage increases and rises in
other operating costs led to net
operating costs rising by 13% from
R2.66 billion (US$246 million) in
2014 to R3 billion (US$237 million) in
2015. Capital expenditure at South
Deep decreased from R994 million
(US$92 million) in 2014 to
R848 million (US$67 million) in 2015.
AIC of R635,622/kg (US$1,559/oz)
in 2015 compared with AIC of
R602,363/kg (US$1,732/oz) in 2014
due to lower gold sold and higher
operating costs, partially offset by
lower capital expenditure.
The 17% weakening of the South
African Rand against the US Dollar
during 2015 had a beneficial impact
on South Deep as the average Rand
gold price received strengthened
from R441,981/kg in 2014 to
R478,263/kg in 2015. South Deep's
revenues in 2015 benefited by
around R190 million (US$15 million),
taking into account the marginal
drop in production and all other
variables being equal. Progress on
the re-basing of the South Deep
mine can be found on pages 73
and 74.
2016 Guidance:
❯ Gold production: 257,000 ounces
❯ AISC: US$1,200/oz
❯ AIC: US$1,250/oz
❯ De-stress development: 36,000m2
(2015: 29,071m2)
West Africa region
2015
Tarkwa
Damang
Region
2016 Guidance
Prod
(Koz)
AISC/AIC
(US$/oz)
2015 Actual
Prod
(Koz)
AISC/AIC
(US$/oz)
2015 Guidance
Prod
(Koz)
AISC/AIC
(US$/oz)
560
150
710
940
1,160
986
586.1
167.8
753.9
970
1,326
1,049
580
180
760
1,040
1,220
1,180
2014 Actual
Prod
(Koz)
AISC/AIC
(US$/oz)
558.3
177.8
736.0
1,068
1,175
1,094
Gold Fields' two mines in Ghana,
Tarkwa and Damang, produced a
strong operational performance in
2015. Total managed gold
production of 753,900 ounces was
less than 1% below guidance of
760,000 ounces for the year and 2%
higher than the 736,000 ounces
produced in 2014. Strong cost
management ensured a 7%
decrease in net operating costs
from US$551 million in 2014
to US$513 million in 2015, while
capital expenditure increased
from US$190 million in 2014 to
US$221 million in 2015. As
consequence AIC for the region of
US$1,049/oz was 12% better than
66
the guidance of US$1,180/oz for
the year and 4% better than the
US$1,094/oz reported in 2014.
While the aggregate performance of
the region was outstanding during
2015, it somewhat masks the
exemplary performance of Tarkwa
on the one hand, and the significant
operational challenges faced by
Damang on the other hand. The
region as a whole reported net cash
inflow of US$44 million during 2015,
of which Tarkwa contributed
US$76 million while Damang
had a negative cash flow of
US$32 million for the year.
Electricity challenges
One of the key challenges facing
Gold Fields Ghana is the curtailment
on electricity usage by the industry.
Government has enforced a 33%
power-shedding programme on all
mining and industrial companies. In
response Gold Fields Ghana has
signed a purchasing power
agreement with independent power
producer Genser, whereby the
company is installing three 11MW
solar turbines at Tarkwa and four
solar 5.5MW turbines at Damang.
These plants are scheduled to be
operational in the second half
of 2016.
The Gold Fields Integrated Annual Report 2015 Mine performances
At Tarkwa, which is the largest
and one of the most consistent
producers in the Gold Fields Group,
gold production increased by 5%
from 558,300 ounces in 2014 to
586,100 ounces in 2015, which was
also 1% higher than the guidance of
580,000 ounces for the year. This
improvement was mainly due to
higher grades mined from the
Teberebie pillar and surrounding high
grade areas. Throughput and
efficiencies in the processing plant
also improved significantly.
Net operating costs improved by
12% from US$372 million in 2014
to US$327 million in 2015 due to
ongoing business improvement
initiatives across all facets of the
operation as well as the lower oil
price. As a consequence of the
increase in gold production and
improved cost management, offset
by higher capital expenditure
associated with fleet replacement
and increased stripping, AIC
improved by 9% from US$1,068/oz
in 2014 to US$970/oz in 2015.
Tarkwa's processing plant achieved
record throughput in 2015 of
13.5 million tonnes compared to
13.4 million tonnes in 2014.
Tarkwa generated net free cash of
US$76 million during 2015.
A brief review of the mine's
brownfields exploration activity
during 2015 is on page 80.
2016 Guidance:
❯ Gold production: 560,000 ounces
❯ AISC/AIC: US$940/oz
Damang had a challenging year with
managed gold production of
167,800 ounces, 7% below
guidance for the year and 6% below
2014 production of 177,800 ounces.
The lower production was mainly as
a result of lower grades caused by
inadequate exposed and available
high grade ore in the pits, in
particular at the Juno South East and
Saddle Bridge areas.
Net operating costs increased by
only 3% from US$180 million in 2014
to US$186 million in 2015 mainly due
to increased tonnes processed as
well as higher fuel costs, amid the
increased use of diesel generators to
compensate for power disruptions as
well as additional load shedding
requirements by the state electricity
utility ECG. Total AIC of US$1,326/oz
in 2015 was 9% higher than
guidance and 13% above the
US$1,175/oz recorded in 2014. The
mine’s net cash outflow totalled
US$32 million in 2015.
To address the loss making position
of Damang, a comprehensive review
of the mine commenced during the
second half of 2015, with a view to
evaluating all options for the future of
the mine. Options being considered
include a push back to expose
higher grade ore under the original
Damang pit or placing the mine in
care and maintenance.
A brief review of the mine's
brownfields exploration activity
during 2015 is on page 80.
2016 Guidance:
❯ Gold production: 150,000 ounces
❯ AISC/AIC: US$1,160/oz
This represents a ‘holding plan’
pending the outcome of the review
of different options for the mine.
❯ Aerial view of the Damang mine
67
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic
focus areas
Safety and wellness
Occupational disease at the South Deep mine (rate per 1,000 employees)
Noise-induced hearing loss (NIHL)2
Cardio-respiratory tuberculosis (CRTB)
Silicosis1
Chronic obstructive airways disease (COAD)2
2015
20141
20131
0.68
6.16
1.54
0.17
1.52
9.15
2.67
0.76
0.62
6.5
1.86
0.00
South Deep workforce
5,837
5,246
6,466
1 Numbers are now presented per 1,000 employees. Comparatives have been restated
2 Based on the number of cases submitted for compensation
Gold Fields continues to uphold its
promise, ‘if we cannot mine safely,
we will not mine’. This reflects the
need to minimise any potential
negative impact on people, maintain
operational continuity and protect the
Company’s reputation. Gold Fields’
Group annual performance bonus
contains a significant safety
component (p133). Furthermore,
maintaining safe and healthy working
conditions is a key compliance issue
for the Company.
As stated in its Occupational Health
and Safety Policy, Gold Fields strives
for ‘Zero Harm’ at all of its operations
and to minimise occupational health
and safety hazards. All of the Group’s
operations are certified to the
OHSAS 18001 international health
and safety management standard
and are fully compliant with the
requirements of the International
Cyanide Management Code (ICMC).
As Cerro Corona produces a
copper-gold concentrate it is not
required to comply with the ICMC
Safety performance
Group safety performance
TRIFR1
Fatalities
Lost time injuries2
Restricted work injuries3
Medically treated injuries4
Total recordable injuries
Total hours worked
2015
3.40
45
68
68
35
2014
4.04
3
75
84
38
2013
4.14
2
52
73
54
174
200
181
51,198,910
49,456,833 43,767,818
¹
2
3
4
5
Total Recordable Injury Frequency Rate (TRIFR) Group safety metric was introduced in
2013. TRIFR = (Fatalities + Lost Time Injuries + Restricted Work Injuries + Medically
Treated Injuries) x 1,000,000/number of man-hours worked
A Lost Time Injury (LTI) is a work-related injury resulting in the employee or contractor
being unable to attend work for a period of one or more days after the day of the injury.
The employee or contractor is unable to perform any of his/her duties
A Restricted Work Injury (RWI) is a work-related injury sustained by an employee or
contractor which results in the employee or contractor being unable to perform one or
more of their routine functions for a full working day, from the day after the injury
occurred. The employee or contractor can still perform some of his/her duties
A Medically Treated Injury (MTI) is a work-related injury sustained by an employee or
contractor which does not incapacitate that employee and who, after having received
medical treatment, is deemed fit to immediately resume his/her normal duties on the next
calendar day, immediately following the treatment or re-treatment
Three of the four fatalities were workplace accidents. A fourth fatality was a member of
the protection services team at South Deep who was shot and killed during a robbery at
the mine
68
During the reporting period, the
Group’s overall Total Recordable Injury
Frequency Rate (TRIFR) improved by
almost 16% to 3.40 recordable
incidents per million man-hours
(2014: 4.04). This reflected:
❯ A significant reduction in the total
recordable injuries at South Deep
(p69)
❯ A continued reduction in total
recordable injuries at our Australian
operations, with the exception of
the Granny Smith mine, following
the entrenchment of a behavioural-
based health and safety strategy
(p69)
❯ A deterioration in the TRIFR at
Cerro Corona as well as our
Ghanaian mines (p69)
Nevertheless, we reported four
fatalities during 2015. Three fatalities
occurred at the South Deep mine in
South Africa and one at the Tarkwa
mine in Ghana:
❯ In March, Kennedy Katongo, a
boilermaker, was injured at a
station tip. He succumbed to his
injuries in hospital three days later.
❯ Alberto Chiungo, a contracted
locomotive operator, was fatally
injured in May, when he was
caught between the loco and a
hopper during tramming
operations
❯ In August, Sbongiseni Ngqoleka, a
security contractor, was shot and
killed by armed robbers targeting
copper cables at South Deep. Two
other security personnel were
injured in the same attack
❯ In December, a spotter at Tarkwa,
Clement Aidoo, was struck and
fatally injured by a truck when it
reversed after dumping its load of
material
The two fatal mine accidents at
South Deep and a further serious
injury at the mine precipitated the
issuing of Section 54 orders by the
Department of Mineral Resources,
placing a moratorium on mine-
related activities across the mine.
This effectively stopped production
at the mine for a total of 18 days,
with production losses estimated at
around 8500 ounces.
The Gold Fields Integrated Annual Report 2015 Safety management
Details of specific regional safety
initiatives implemented in 2015 are
set out below:
Americas region
In 2015, the TRIFR at the Cerro
Corona mine deteriorated to 1.09
from 0.38 in 2014, largely the result
of an increase in total recordable
injuries from two to seven during the
year. While a number of audits were
performed on the mine’s safety
management system, with no major
findings reported, the mine has
intensified a safety campaign that
commits all employees and
contractors to zero accidents. The
campaign contains 10 relevant safety
rules that every employee and
contractor has to sign up to and
focuses on improving the leadership
skill of safety supervisors and
conducting robust risk assessments
before performing tasks.
Australia region
For 2015, the TRIFR for Gold Fields
Australia improved by 4.5% over
2014 and the number of recordable
injuries fell from 97 to 92. The
St Ives, Agnew and Darlot mines
recorded continued improvements in
their recordable injury frequency
rates, but at Granny Smith the TRIFR
deteriorated from its low 2014 base
during 2015.
The rising TRIFR trend at Granny Smith
has been predominantly related to
incidents underground. Efforts to
address the trend are focused around
a re-vitalisation of the Vital Behaviours
programme, specifically in the
underground areas, providing coaching
and mentoring for supervisors and
managers and a return to the required
levels of discipline on safety protocols
and systems. Launched in May 2014,
the programme has achieved an
overall reduction in total recordable
injuries of around 30% over the
period of 2013 to 2015.
A risk assessment undertaken on all
recordable injuries since 2012
indicates that the risk of incidences
that result in recordable injuries is
steadily declining with no high-risk
events having occurred since the
implementation of Vital Behaviours
in 2014 and 2015.
However, a re-vitalisation of the Vital
Behaviours programme and safety
discipline will be instituted in 2016
to reinforce safety culture and
standards at our mines. A particular
focus will be new employees and
contractors, where there is evidence
of a greater risk of injury.
South Africa region
The South Deep mine reported two
mining-related fatalities and one fatal
shooting in 2015, undoubtedly the
low point in its safety performance
during the year. The fatalities were a
setback on the mine’s path to Zero
Harm, but overall South Deep
showed a strong improvement in its
safety performance as highlighted by
the 37% improvement in TRIFR from
4.65 in 2014 to 2.91 in 2015. Total
injuries improved from 167 to 68 over
the same period, while the Serious
Injury Frequency Rate improved by
21%. A 38 injury-free day record was
achieved during Q4.
A number of new initiatives were
launched in 2015 to complement
and support the behavioural-based
incident-management system, which
is the base for the mine’s safety
campaign. These include:
❯ Proper start-up procedures
through workplace assessments
and employees’ medical screening
❯ Increased visibility underground
through multi-discipline audits and
management presence
❯ The launch of a number of safety
enablers, such as competitions
and recognition awards
❯ A weekly safety meeting at which
all incidents are discussed and
analysed
❯ A compliance system checklist
that ensures work is stopped if a
workplace is not fully compliant
with safety standards
❯ Ongoing monitoring of the top five
accident causes and ensuring
appropriate measures are in place
❯ The inclusion of leading and
lagging indicators in the analysis
of the safety component of the
bonus. Achievement of safety
targets accounts for 30% of the
total bonus paid to teams
In addition to behavioural-based
management, South Deep has also
intensified its effort to engineer-out
safety risks. As part of this a
rail-bound proximity detection
system was completed in Q1 2016,
through which all 56 locomotives at
the mine have been fitted and
relevant operators and artisans
trained in its usage. The second
phase of the project will comprise
the installation of fixed beacons at
the mine in 2016, to facilitate
communication between the
locomotives.
Fall-of-ground accidents have been
on a steady decline and fell from
eight in 2014 to six in 2015. We
continue to work with outside
institutions, including the Institute
of Mine Seismology, to monitor,
understand and mitigate against
seismic underground events.
A further focus on safety
management in 2016 will be placed
on safety practices for contractors
through a dedicated incident
management system.
West Africa region
In 2015, there was a deterioration in
the overall safety performance of the
region, with the TRIFR rate rising to
1.02 from 0.75 in 2014 and total
recordable injuries rising to 21, from
15 in 2014. The Tarkwa mine also
reported a fatality in 2015, the first
at our West African operations in
four years.
69
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
Several interventions are being
considered to prevent a re-
occurrence of the accident, which
occurred when a dump truck ran
over a spotter after he had offloaded
waste rock. The mine is looking at a
number of ways of eliminating the
human interface with machinery,
wherever possible, and investigations
have also begun into the use of other
spotting systems for trucks.
A key part of the safety strategy is a
zero tolerance approach to drug and
alcohol usage. As part of the mines’
zero tolerance approach almost
126,664 sobriety tests were
conducted during 2015 and
15 employees and contractors, who
were found to be over the limit, were
discharged immediately. The zero
tolerance approach is supported by
free counselling and educational
sessions on drug and alcohol abuse.
Behavioural-based safety
programmes are being intensified to
arrest the weaker safety record at
both mines and more regular
meetings between senior
management and their teams on
safety are now taking place. The
majority of safety-related incidents
involve contractors on site and
greater pressure is being exerted on
contractor management to ensure
effective supervision and
implementation of safety standards.
Employee health and wellness
management
Gold Fields is committed to reducing
the exposure of its employees to
occupational health risks, including
those associated with air quality,
silicosis, tuberculosis and hearing
loss. As such, each region has
implemented occupational health
and hygiene monitoring for diesel
particulates, respirable and silica
dust, other airborne pollutants,
radiation and noise. Particular
emphasis is placed on managing the
underground working environments
in Gold Fields’ Australian and South
African operations, due to the
heightened health risks that
70
underground mining poses to
workers.
There have been significant
improvements in occupational health
and wellness rates throughout the
Group during 2015. The number of
occupational health cases submitted
for compensation by the Group was
as follows:
❯ Six cases of NIHL (2014: 13)
❯ Nine cases of Silicosis (2014: 15)
at South Deep
Furthermore, in 2015, 36 new cases
of CRTB (2014: 49) were recorded.
In addition, the COAD rate has
decreased by 78% from 0.76 (2014)
to 0.17 (2015) at the South Deep
mine.
Wellness is a material issue given the
location of Gold Fields’ mines, the
nature of employees’ working
patterns and the lifestyle challenges
associated with the sector. All of
Gold Fields’ regions run dedicated
wellness programmes, tailored to
both the national and local context of
each mining operation. These
programmes aim to identify and
manage chronic medical conditions
within the workforce, whilst also
maximising its productive capacity
and reducing absenteeism.
Noise
During 2015, Gold Fields’ South
Deep mine achieved a significant
55% improvement in the NIHL rate
to 0.68 per 1,000 employees and in
the number of NIHL cases submitted
from eight in 2014 to four in 2015.
Throughout 2015, the mine met the
Mine Health and Safety Council
(MHSC) milestone for
equipment noise not to exceed
110 (A-weighted) decibels (dB(A)).
Personal noise sampling results,
even though they are steadily
improving, indicate that 72% of
South Deep’s personnel are
potentially exposed to noise
measurements above the
Occupational Exposure Limit (OEL)
of 85dB. It is important to note that
these measurements do not
incorporate the noise reduction effect
provided by hearing protection
devices, which are freely available at
South Deep, and are compulsory to
wear in demarcated areas.
South Deep continues to implement
a range of medical, educational and
engineering interventions to improve
its performance. These include:
❯ Thorough examinations during
pre-employment and periodic
medical examinations
❯ Early diagnosis and management
of treatable medical diseases
❯ Preventative counseling on NIHL
❯ Silencing of underground fans and
pumps
❯ Application of noise management
measures to the underground
mining fleet
❯ Participation in Chamber of Mines'
occupational health initiatives
❯ Distribution of personalised
moulded hearing protection
devices to high-risk employees, a
programme that is 65% complete
The Mine Health and Safety Council
(MHSC) has set new targets, which
require that total noise emitted by all
mining equipment should not exceed
107 dB(A) by 2024. South Deep will
continue to develop and enhance
technical solutions to achieve this
target.
At our Australian operations a
comprehensive NIHL strategy was
rolled out during the year, to ensure
that the management of noise is
standardised within the region. This
strategy, which remains a key priority,
optimises current practices and aims
to maintain personal noise exposures
below 85dB(A) for the duration of the
shift. The strategy centres around
four pillars:
❯ Adopting a risk-based approach
❯ Implementation of controls and
engineering solutions to reduce
exposures
❯ Enforce the correct use of
appropriate personal protective
equipment (PPE)
❯ Ongoing monitoring to assess the
efficacy of our controls
The Gold Fields Integrated Annual Report 2015 A number of audiometric tests at our
operations showed that the strategy
is demonstrating early success.
as sound proof seals for equipment
operator cabins, are also having a
positive impact on noise levels.
There were no reportable NIHL cases
in the region and at St Ives, where
audiometric testing was completed
for 127 workers exposed to above
95dB(A) in the underground and
open pit operations, none reported
positive for NIHL. Furthermore, only
nine vehicles and machinery
equipment across our four
operations recorded noise levels
above 110dB(A) throughout 2015.
Operators of this equipment use
appropriate hearing protection to
ensure noise levels below 85dB(A).
In West Africa during 2015, the
number of NIHL cases reported fell
to two from five in 2014, but
personal noise samples taken at our
Tarkwa and Damang mines regularly
reveal high percentages above our
internal standard of 85dB(A). This
does not factor in the mitigating
impact of hearing protection devices.
Noise management measures
implemented to protect employees
working in these environments
include:
❯ The mandatory use of hearing
protection devices (ear plugs and
ear muff) in areas with noise
exposures above 85dB(A)
❯ Introduction of noise engineering
controls, where feasible, to reduce
potential exposure from identified
noise sources
❯ Introducing pump and fan silencing
methods and technologies
Controlling equipment cabin noise
is another focus of our Ghanaian
operation as a small percentage of
160 machines assessed during 2015
exceed the internal benchmark of
83dB(A). Continuous monitoring of
the operator workstations as well as
a number of in-pit machines such as
drill rigs, excavators, dump trucks
and graders are undertaken every six
months. Engineering controls, such
Silica dust exposure
In 2015 the MHSC introduced new
aspirational silica dust exposure
targets for South African gold mines,
called ‘silica dust milestones’. These
milestones require that personal
exposure levels to silica dust be
reduced from 0.1mg/m³ to
<0.05mg/m³ by 2024. In Q4 2015,
South Deep reported that 23% of
the personal silica dust samples
exceeded this level. This is an
improvement from the 38% over
exposures recorded in Q1 2015, but
South Deep has accelerated the
implementation of a range of
improved dust control measures,
including:
❯ Real-time dust monitoring
❯ The fitting of water mist sprays at
dust sources
❯ Dust management controls on
footwalls and internal tips
❯ Installation of manually controlled
water blasts in all working areas
In South Africa, during 2015 the
Silicosis rate per 1,000 employees
improved by 43% to 1.54 from
2.67 in 2014 with the number of
Silicosis cases submitted to the
relevant health authorities falling
from 14 to nine. Similarly, the CRTB
rate improved by 33% in 2015 to
6.16 per 1,000 employees and the
number of CRTB cases submitted
fell to 36 in 2015 from 48 in 2014.
The industry working group formed
in 2014 to address issues relating to
compensation and medical care for
occupational lung disease in the
South African gold mining industry,
had extensive engagements with a
wide range of stakeholders in 2015,
including government, organised
labour, other mining companies and
legal representatives of claimants
who have filed legal suits against the
companies.
The companies – Anglo American
South Africa, AngloGold Ashanti,
African Rainbow Minerals, Gold
Fields, Harmony and Sibanye –
believe that fairness and
sustainability are crucial elements
of any solution and are working
together with these stakeholders
to design and implement a
comprehensive solution that is both
fair to past, present and future gold
mining employees and also
sustainable for the sector.
The companies are among
respondent companies in a number
of lawsuits related to occupational
lung disease, but do not believe that
they are liable in respect of the
claims brought, and they are
defending these. The companies
have been working for many years
to try to eliminate the incidence of
occupational lung disease at their
mines. These efforts continue.
At our open pit operations in Ghana,
Australia and Peru, contact with
silica dust is limited due to the nature
of open pit mining and the low silica
content of the ore bodies.
In 2015, there were no new cases of
Silicosis and CRTB at our Ghanaian
operations. However, there was only
one case each in 2014. Despite this,
regular gravimetric sampling of
respirable silica dust samples are
carried out and evaluated at our
Tarkwa mine in Ghana.
Diesel Particulate Matter (DPM)
Gold Fields undertakes regular
monitoring and analysis of the
concentration of DPM at all of its
operations. This issue is particularly
material at Gold Fields’ underground
mines in Australia and South Africa,
due to the potential concentration of
particulates in specific working areas.
71
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
While there are no regulatory limits,
the Australia region implemented a
strategy in 2014 designed to reduce
exposure to DPM with a focus on
fitting filters to equipment, refining
maintenance schedules, ensuring the
correct levels of ventilation and
providing appropriate procedural
controls.
Sampling programmes during 2015
have indicated the success of this
initiative with a dramatic decline in
DPM levels underground, to a point
where only 1% of samples (2014:
2%) have exceeded the 70mg/m3
target recommended by the
Australian Institute for Occupational
Hygienists. Furthermore, a two-year
study on DPM exposure on drill-rig
operators at Granny Smith, showed
a conclusive reduction in exposures
that are attributed to diesel
particulate filters, ventilation
management and operator
education.
In South Africa, the Department of
Mineral Resources has developed
a draft regulatory framework to
establish a DPM OEL. This proposal,
published in February 2014,
recommended a four-year ‘step-in-
approach’ starting at 350mg/m3 in
2015 and systematically decreasing
to 160mg/m3 by January 2018. Gold
Fields has over the years introduced
a range of measures to improve
monitoring and bring down the DPM
exposure levels underground. These
include the acquisition of vehicles
and machines with more advanced
engine technology as well as a new
fuel supply contract – started in Q3
2014 – through which South Deep
now receives only ultra-low sulphur
content diesel (10ppm). This is
having the desired impact – the 2015
350ug/m3 DPM OEL was only
exceeded in 1.7% of samples last
year compared with 4.5% in 2014
and 19.1% in 2011. The 2018
160ug/m3 OEM was exceeded in
11.2% of samples in 2015 compared
with 25.8% in 2014 and 60.6% in
2011. South Deep is looking at
accelerating the research into the
fitment of diesel particulate filters to
achieve further reductions.
72
In Ghana, the exposure levels and
concentration of personal and area
DPM samples obtained were
insignificant, approximately 200%
below the OEL. The DPM monitoring
programme was therefore
discontinued.
HIV/Aids
HIV/Aids management is integrated
into Gold Fields' mainstream health
services to improve worker
participation and minimise
stigmatisation. Voluntary Counselling
and Testing (VCT) takes place during
regular employee health assessments.
This has the added benefit of directly
addressing the interaction of HIV/Aids
with related health issues such as
tuberculosis (TB) and other sexually
transmitted infections (STIs).
Gold Fields' workforce in South
Africa faces a particular risk of
exposure to HIV/Aids, in a national
context where an estimated 19% of
adults (aged 15 to 49) live with the
disease. Gold Fields is committed to
lowering the HIV/Aids prevalence at
South Deep, where 69 employees
tested positive in 2015, compared
with 54 in 2014. South Deep's
integrated HIV/Aids, STI and TB
strategy directly addresses
interactions between these diseases.
It has four key pillars:
❯ Promotion: This includes regular
publicity campaigns and condom
distribution at all workplaces
❯ Prevention: VCT is provided to all
employees, contractors, their
partners and family members on a
confidential basis. In 2015, the
mine’s VCT participation rate was
around 17%
❯ Treatment: Free Highly Active
Anti-retroviral Treatment (HAART)
is provided to HIV-infected
employees through onsite,
doctor-staffed clinics. In 2015, 50
employees joined the HAART
programme (2014: 58). This takes
the total number of active
participants to 296 (2014: 262),
with 480 cumulatively enrolled
since the HAART programme
began in 2004. Employees’
dependants can also receive
HAART via the Company's
medical aid schemes
❯ Support: This includes doctor-
based primary healthcare,
psychological counselling and
social services for all employees
and contractors
In addition, and in recognition of the
potentially close relationship between
HIV/Aids in the workplace and local
communities, South Deep supports
a number of community-based HIV/
Aids projects.
In Ghana too, where the national
HIV/Aids rate is around 1.5%,
employees and contractors have
access to a confidential VCT
programme which employees receive
free of charge. During the year, about
55% of employees of the Ghana
operations underwent the VCT
programme. Anyone testing positive
is provided with free treatment in line
with the government's national HIV
treatment programme which supplies
drugs free of charge. By year-end
2015 Ghana had 19 employees on
HAART (2014:22). Gold Fields
also implements community-based
HIV/Aids programmes in Ghana,
including awareness-raising (via radio
and trained community health
educators) and condom distribution.
Malaria
Our workforce in Ghana faces a high
risk of exposure to Malaria and the
Company has a comprehensive
Malaria strategy in place, which
incorporates education, prevention,
prophylaxis and treatment. It also
includes spraying accommodation
(both on-mine and employee housing
within the community), provision of
mosquito repellent for workers,
support for community health
facilities and rapid diagnosis and
treatment.
In 2015, 523 employees (2014: 681)
tested positive for malaria after 3,104
(2015: 2,686) individuals were tested
at both of our mines. None of the
treated cases proved fatal.
Employees and dependants who live
in the mine villages have their houses
sprayed as part of our Malaria Vector
Control programme. Under this
programme a total of 450 company
housing units were sprayed in 2015.
The Gold Fields Integrated Annual Report 2015 South Deep
In South Deep’s evolution 2015 was
a critical year and was very much a
year of two halves. We started off the
year by taking a step back and
deciding to fix the basics at the mine
before determining the new long-
term steady state profile.
As part of this process, we removed
the previous long-term production
and cost targets to afford the new
South Deep management team the
time to fix the base and determine
the way forward. In the absence of
long-term production targets though,
we stated that it was our aspiration
to get to cash breakeven at the mine
by the end of 2016. In addition, we
committed to providing a new
long-term plan in early 2017.
The first imperative was recruiting a
new management team at the mine.
To achieve this, we aggressively
handpicked a team of leading
mechanised mining specialists,
mostly from the South African
platinum sector.
The new team developed 68 projects
to address the issues faced at South
Deep. These projects were
categorised into seven broad pillars:
People; Safety and health;
Mechanised fleet; Infrastructure;
Mining; Mine design and planning;
Systems. In addition, a separate
business improvement team was set
up to work with the operating
management team to implement the
range of improvement projects (p74).
In addition to these seven pillars
South Deep also strengthened its
energy and water teams as well as
the Sustainable Development
department in view of the increasing
risk faced by the mine amid social
volatility in the Westonaria district,
home to the mine (p114).
The team undertook an extensive
recruitment drive of the identified
critical skills and by the end of 2015
had filled 164 of the 166 skills it was
seeking. Importantly, most of the
core mining and engineering
positions have now been filled.
In addition, in April 2015 South Deep
entered a three-year wage
agreement with its registered trade
unions to ensure that the
remuneration packages reflected the
specialised mechanised mining skills
set required.
During 2015, the fleet was optimised
and a total of 24 Category 1
machines were delivered to the mine
during the year, with all machines,
except one, commissioned before
year-end. An additional 24 machines
will be acquired during 2016. The
maintenance capacity at South Deep
also improved during the year with
the implementation of a maintenance
contract with an Original Equipment
Manufacturer (OEM) in Corridor 2,
which accounts for 35% of total
mining at South Deep. We also
commissioned the 93 level
workshop, one of the largest
underground workshops in South
Africa.
During the year, a marked
improvement in the physical
conditions of the underground
infrastructure was achieved across
the mine. Further improvements are
expected in 2016, particularly with
new underground roadway
constructions and maintenance
projects initiated in Q1 2016.
In 2013, we began a review of
the de-stress mining method in
collaboration with a team of leading
international and local geotechnical
experts. A strategic mine design
change in the de-stress methodology
was adopted in July 2015 with a
detailed transition programme
developed to guide the change
process. The conversion from low
profile vertical mining (2.5 metres
vertical height) to high profile vertical
mining (5 metres vertical height)
commenced in Q3 2015 and is
expected to simplify and derisk the
mining process. At the end of the
year, all de-stress cuts at the mine
had been converted to high profile
with the exception of corridor 1.
About 70% of the mine is now
employing high profile de-stress with
the transition for the remainder of the
mine set to continue until 2018.
More details on South Deep’s
mining processes and
methodologies are on page 87.
There were marked operational and
financial improvements in 2015.
Comparing the second half with the
first half of 2015, production at South
Deep increased 64% to 123,000
ounces, which resulted in an 37%
decrease in AIC to US$1,279/oz.
In addition, safety improved
materially, with TRIFR falling by 8%
over the period backfill placed
increased 50% to 33,780m3 and
secondary support increased 27% to
614 metres.
While the net cash outflow for the
year was R1 billion (US$80 million),
the operating improvements through
the year and the higher Rand gold
price resulted in the Q4 2015 outflow
falling to R57 million.
For 2016 we have provided the
following guidance to the market:
257,000 ounces at AISC of
R550,000/kg (US$1,200/oz) and AIC
of R575,000/kg (US$1,250/oz).
Capital expenditure is estimated at
R1 billion (US$71 million). We
maintain our target of achieving cash
breakeven by the end of 2016 at our
planning gold price of R500,000/kg.
73
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
South Deep’s base for future growth
9
Energy
and water
Stakeholders
and community
8
1
People
2
Health and
safety
7
Finance and
administration
6
Resource
management
5
Mining methods
4
Infrastructure
3
Fleet
Fix the base to support future growth
74
The Gold Fields Integrated Annual Report 2015C Growing a quality portfolio
of assets
Growth strategy
Gold Fields’ definition of growth is
underpinned by our focus on cash
generation. Growing Gold Fields
does not necessarily imply a growth
in geographical footprint or number
of operations. We define growth as
‘growth in cash flow per share, and
growth in average reserve life.’
Over the past three years we have
made significant progress in terms of
restructuring our portfolio so we can
achieve the targeted growth in the
average reserve life per operation
and free cash flow per ounce.
Gold Fields’ portfolio is now
characterised by modern, fully
mechanised open-pit and
underground mining, with diversified
production spread across three
continents.
When growth is driven by such a
strong focus on cash generation, the
business may, in certain instances
where operations are not strategically
aligned or not contributing to our
cash generation imperative, dispose
of assets in its quest for growth. We
have focused on disposing of growth
projects that are marginal, located in
‘higher-risk’ locations and/or are
primarily focused on metals other
than gold. This has resulted in a
short-term reduction in Gold Fields’
Mineral Resources – from 113 million
ounces in 2013 to 108 million
ounces in 2014 and 102 million in
2015 (p82 – 87). In light of our
new focus, however, it is not only
acceptable but is expected that
every new ounce Gold Fields brings
into production will directly support
the delivery of superior returns to
current and future shareholders, and
upgrade our existing portfolio.
Of the various growth channels
available – greenfields exploration,
brownfields exploration, acquisitions,
mine construction and targeted
portfolio management – Gold Fields
has selected those that align with our
cash-focused strategy, our core
competence and our list of growth
criteria. Our strategy has informed
the adoption of three growth pillars:
❯ Acquisitions: pursuing cash-
generative acquisition
opportunities that are aligned with
Gold Fields’ core competencies
❯ Near-mine (brownfields)
exploration: we ceased all early
greenfields exploration activity,
which does not add to short- to
medium-term cash flow, and
shifted to low-risk, near-mine
exploration
❯ Ongoing active portfolio
management to optimise our
existing assets
These growth channels emerge as
the business follows a process to
achieve sustainable growth in cash
flow per share and growth in average
reserve life. This process, outlined in
the diagram on page 76, starts with
two courses of action, during which
we assess:
1. Potential future acquisitions
2. The current mines and projects in
our portfolio of assets
Assessing potential future
acquisitions
In assessing potential acquisitions,
Gold Fields looks broadly and
globally at potential assets. Once a
potential acquisition is identified, it is
assessed against the Group’s five
growth criteria:
❯ Quality: All-in Costs
❯ Jurisdiction: the right address
❯ In-production: cash producing or
near-production
❯ Life: minimum eight years, ideally
10
❯ Scale: large enough to produce
US$20 million – US$30 million free
cash flow annually
The resultant list is tested against
additional balance sheet criteria to
develop a shortlist of assets for
which the Group has both the
appetite and capital available for
purchase.
Gold Fields then undertakes a
prudent and phased investigation
that may ultimately result in
acquisition. This process includes
approaching the current owner,
conducting desktop and on-site due
diligence; building the business case,
both internally and externally and, if
appropriate, entering the final deal
phase.
While no major acquisitions have
been made over the past two years
the difficult market conditions in
the industry have made further
consolidation in the industry more
likely. We will take a disciplined
approach to any corporate activity
and will model it on our successful
US$262 million acquisition of the
Yilgarn South assets from Barrick
Gold in October 2013. An acquisition
like this will be impossible to replicate
in terms of the price we paid for the
three mines in the Yilgarn portfolio at
the time (Granny Smith, Darlot and
Lawlers), but the structural benefits
and subsequent management efforts
have given us a model to replicate.
The integration of the Yilgarn South
assets with our existing mines in
Western Australia have:
❯ Helped the Australia region expand
its cash-generative production to
the point where it now contributes
45% of Gold Fields’ total produced
ounces
❯ Paid for themselves by Q3 2015
– a two-year payback that is
almost unheard of in the industry
75
The Gold Fields Integrated Annual Report 2015 - Target -
Growth in the average reserve life per operation
and free cash flow per ounce
Potential future
acquisitions
Current mines and projects
in our portfolio
(Following optimisation through
business strategic planning process)
Growth Criteria
to screen current and potential future as s e t s
Quality
(All-In Costs)
Scale
(Large enough
to produce
US$ 30-40m FCF
annually)
Jurisdiction
(The
‘right address’)
Life
(Minimum
8 – 10yrs
desirable)
in-
Production
(Cash producing)
Test potential asset
shortlist against balance
sheet criteria
➠
Further categorise shortlist
according to ‘price tag’
$
Following categorisation according to price tag, our shortlist of potential future
assets undergoes further refinement. Those potential assets that remain on the
shortlist are categorised according to an action plan and timeframe for each. Gold
Fields then undertakes a phased approach that may ultimately result in
acquisition. This includes approaching the current owner, conducting desktop and
on-site due diligence; building the business case, both internally and externally
and entering the final ‘deal phase’.
➙
Determine
way forward for each
current asset
➠
?
O p ti m i s e
?
C o n ti n u e
?
D i v e s t
Based on the outcomes of the strategic business planning process and the growth
criteria screening, existing assets are further categorised into one of three groups.
Assets that have potential to deliver future value, or that are not deemed to
currently be delivering on their optimal potential, will be Optimised. This might
involve further investment and/or brownfields exploration. Those assets that are
performing optimally and delivering sustainable value to the Group, will Continue to
be managed in line with current operational practices. Those assets that do not
meet key components of the growth criteria and are not delivering sustainable
value, will be considered for Divestment.
Quality of portfolio
increased to deliver on business strategy
76
The Gold Fields Integrated Annual Report 2015WE ASSESS On an annual basis, all assets in
our portfolio undergo the Group’s
Business Strategic Planning process.
Multiple scenarios are run for each
operation, assessing various
operational options for how best to
maximise cash flow, life and margin
for each operation. After taking into
account the Group’s capital profile,
existing portfolio and current
economic environment, a go-forward
option is made for each operation,
which feeds into our operational
planning cycle.
Thereafter, a five-year business plan
and a detailed, annual operational
plan are developed; looking at all
aspects of the operation and tested
against the existing investment
criteria.
Once this Business Strategic
Planning process is complete, we
run our current mines and projects
through a screening filter of the same
five growth criteria used to screen
potential future acquisitions (outlined
previously). Based on the outcome of
this exercise, the Group concludes a
way forward for each operation,
deciding on how to:
❯ Optimise the operation including,
inter alia, through near-mine
(brownfields) exploration
❯ Continue running them in line with
the current status quo as
developed in the previous
iteration or
❯ Investigate potential divestment
Together, this process of assessing
existing assets and potential future
assets has the effect of increasing
the quality of the portfolio in order to
deliver on the business strategy.
Growth in 2015
Existing portfolio
During 2015 Gold Fields continued
to focus on improving the cash-
generation performance of its
existing operations. This included:
❯ Protecting the commercial
sustainability of its mines by
avoiding high-grading and
investing in ore development
on an ongoing basis (p78)
❯ Brownfields exploration for
life-of-mine extensions (p78)
❯ Production and strategic planning
based on the delivery of a healthy
FCF margin at prevailing gold
prices
❯ Extensive reviews of two of our
more marginal mines – Damang in
Ghana and Darlot in Australia – to
ensure that they will continue to
contribute in the long-term to the
growth potential of Gold Fields.
These reviews are ongoing
❯ Bringing South Deep into a
position where it halts cash
outflows on a continued basis
To ensure that our business has
a strong future, we have made
continued exploration and
development of our mines’
underground and surface ore bodies
a strategic priority. These are among
the last activities we would cut, even
in a sustained low gold price
environment and costs associated
with maintaining the integrity of our
ore bodies is built into the mines’
cash flow models.
The strength of our portfolio is
evident in the continued free cash
flow generation of our international
mines in Australia, Ghana and Peru,
which collectively generated a net
US$334 million during 2015, despite
the average lower US$ gold price
received. Furthermore, our portfolio’s
FCF margin for 2015 was 8%
despite the fact that, at US$1,140/oz
the actual annualised gold price
received was 12% below the
US$1,300/oz planning price. If the
price received for the year was
normalised to US$1,300/oz, then the
free cash flow margin would have
been 15% – in line with our stated
target.
At the South Deep mine in South
Africa, we are targeting cash
breakeven by the end of 2016 with
steady-state production metrics to
be published early in 2017. Progress
at South Deep is discussed on
page 73.
Sales and divestments
As part of stringent evaluation of its
assets Gold Fields has, since 2013,
disposed of a range of projects that
did not meet its long-term cash-
generation criteria. In 2014, we
disposed of our holdings in the
Chucapaca project in Peru, Yanfolila
in Mali and Talas in Kyrgyzstan.
In 2015, we continued the
programme of disposing of growth
assets which did not meet the
Group’s strategic growth parameters.
Gold Fields sold its 51% interest in
the Woodjam copper-gold-
molybdenum project located in
British Columbia (BC), Canada to its
joint venture partner in the project,
Consolidated Woodjam Copper, as
it is not a majority gold project. As
payment Gold Fields was issued with
new Woodjam Copper shares to
take its aggregate holding in
Woodjam Copper from 1.1% to
19.9%. As in similar transactions
previously, Gold Fields will retain a
future royalty in the project, in this
case a 2% net smelter return (NSR)
royalty over all unencumbered land
owned by Woodjam Copper. This
ensures that Gold Fields retains
some upside to future production
in the project.
The table on the next page shows
the status of our sales of holdings in
key projects over the past two years.
77
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
Gold Fields’ divestment 2014 – 2015
Project
85% of Yanfolila (Mali) (85%)
51% of Chucapaca (Peru)
100% of Talas (Kyrgyzstan)
51% of Woodjam project
Year
2014
2014
2014
2015
Buyer
Hummingbird Resources
Buenaventura
Robust Resources
Consolidated
Woodjam Copper
Price
19.9% in Hummingbird shares
US$81 million
US$10 million + Robust shares
(since cashed out)
19.1% in Cons Woodjam
Copper shares
NSR
royalty
0
1.5%
2%
2%
Gold Fields still retains 100% in the
Arctic Platinum Project in Finland,
but the project remains up for sale
since it is a majority Platinum Group
Metals operation.
Near-mine exploration
Gold Fields’ significant investment in
greenfields exploration over the last
15 years has not delivered any new
mines. Instead, all new mines brought
into the Company’s production
portfolio have been through
acquisition – with Gold Fields adding
subsequent value through the
optimisation of their operations.
Near-mine exploration therefore
offers one of the best opportunities
for cash-generative growth for
Gold Fields. This is due to synergies
offered by:
❯ Knowledge of the mine’s ore
bodies – which supports its ability
to identify additional ore bodies
within common, nearby geological
systems
❯ Operational capabilities – including
Gold Fields’ proven ability to
effectively develop and mine
orogenic ore bodies
❯ Regional and operational
infrastructures – including its
existing processing spare capacity
and regional management teams
As well as adding to Gold Fields’
Mineral Resource and Mineral
Reserve base, near-mine exploration:
❯ Extends the life of the Group’s
existing mines – whilst maintaining
and/or increasing their value
❯ Ensures each region can continue
to leverage its existing
infrastructure
The benefits of effective near-mine
exploration can be seen in the
historical sustainability of the Agnew
and St Ives mines. In 2002, at the
time of their acquisition, the mines
had a combined Mineral Reserve
of 2.9 million ounces. Since then,
the mines have produced over
8.5 million ounces – and their
combined Mineral Reserves remain
mostly unchanged. Gold Fields
believes that most of its mines in
Australia (which share similar
orogenic ore bodies) will be able to
repeat this success. Orogenic ore
bodies offer a number of advantages
in this respect, making this a priority
region for near-mine exploration.
Orogenic ore bodies
Orogenic ore bodies are an
important source of global gold
production. While known orogenic
reserves characteristically do not
extend much further than several
years on any particular deposit, they
can have significant vertical and
horizontal dimensions and ‘grow
volumetrically’ as extensional
exploration and development
advances. They can therefore
provide mines with long-lived,
sustainable gold operations
particularly as orogenic ore bodies
are well understood geologically and
are often large and of good grade.
In 2015, Gold Fields raised its total
near-mine exploration expenditure
by 20% to US$72 million (2014:
US$60 million) in pursuit of this
strategy, the majority of which –
US$68 million (A$91 million) – was
at our four Australian mines. This
budget supported a total of
638,766 metres of near-mine drilling
(2014: 349,511 metres). For 2016
we have budgeted for US$65 million
in near-mine exploration of which
A$86 million (US$63 million) will be
at our Australian operations.
Much of this activity was focused on
the Australia and West Africa regions
where the six mines in the Gold
Fields portfolio have strong growth
potential. Following is a breakdown
of the operations’ reserve and
resource reconcilation for 2015.
78
The Gold Fields Integrated Annual Report 2015 St Ives
Mineral Resource reconciliation
(Gold – Moz)
Agnew
Mineral Resource reconciliation
(Gold – Moz)
Darlot
Mineral Resource reconciliation
(Gold – Moz)
4.0
3.0
2.0
1.0
0
3.51
(0.39)
0.02
3.14
Dec 2014 Depletion
Growth
Dec 2015
3.0
2.0
1.0
0
2.57
(0.25)
0.33
2.66
Dec 2014 Depletion
Growth
Dec 2015
0.30
0.20
0.10
0
0.26
(0.08)
0.08
0.26
Dec 2014 Depletion
Growth
Dec 2015
Mineral Reserve reconciliation
(Gold – Moz)
Mineral Reserve reconciliation
(Gold – Moz)
Mineral Reserve reconciliation
(Gold – Moz)
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
1.80
(0.39)
0.13
1.54
Dec 2014 Depletion Replacement Dec 2015
2015 saw a reinvigoration of the
St Ives exploration effort with
expenditure increased to
A$43 million and 31.3km of drilling
completed. This delivered
68,000 ounces of new reserves
to the Neptune deposit and
34,000 ounces of new reserves at
the North-West Palaeochannel.
New resources were defined
primarily at Invincible South with
an increase of 192,000 ounces, and
at Invincible Underground with
134,000 new ounces. Maiden
resources were defined at Incredible
with 90,000 ounces and at North-
West Palaeochannel with
37,000 ounces. Further growth
potential exists at all of these
projects.
Encouraging results were returned
from broad gold intercepts in shallow
drilling at the Retribution project.
Extensive follow up drilling will be
completed during 2016 to further
define the gold mineralisation and
to define resources.
The exploration strategy at St Ives is
to continue to develop the exploration
pipeline and define further resources,
with a priority on open pit resources.
Resources defined during 2015 will be
expanded and converted to reserves.
1.0
0.8
0.6
0.4
0.2
0
0.87
(0.25)
0.05
0.67
Dec 2014
Depletion Replacement Dec 2015
Agnew saw strong focus on growth
through exploration in 2015.
Exploration expenditure of
A$21 million delivered additional
near-mine reserves of 55,000 ounces
at Cinderella and total new resources
of 367,200 ounces. The resource
expansion came primarily from
Cinderella with an increase of
116,000 ounces and at New Holland
with 107,000 ounces. Maiden
resources were reported at Kath
(94,500 ounces) and Himitsu
(49,700 ounces).
Highly encouraging results were
observed from drilling in the
Waroonga North project in late 2015.
In 2016, resource definition drilling
will be accelerated from surface and
an underground drill platform
established.
The exploration strategy at Agnew
is to identify high potential targets
outside the current Waroonga – New
Holland mining complex but within
the tenement package. To this end,
high-resolution magnetic data for the
Eastern Limb tenements was
acquired and analysed during 2015.
This information, combined with
historic exploration results, has
enabled definition of 15 early stage
targets to be tested in 2016.
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0
0.09
(0.08)
0.03
0.04
Dec 2014
Depletion Replacement Dec 2015
Darlot's 2015 focus was on self-
funded exploration programmes to
replace production depletion and to
extend the life-of-mine.
Key successes in the underground
exploration programmes were the
initiation of stoping in the Lords
South Lower area with positive grade
reconciliations. Incremental
expansion options have also been
identified. Further upside potential
exists for Darlot from ongoing in-mine
exploration drilling with the Centenary
Oval area delivering a small maiden
Inferred Resource in 2015.
Further Resource conversion drilling
was well advanced by end-2015. In
addition there was a significant ramp
up of surface exploration activities,
inclusive of detailed structural and
geophysical targeting, aimed at
identifying hidden ore bodies at
depth analogous to the Centenary
ore body. The increased exploration
budget in 2015 focused on both
underground and surface
prospective areas.
Direct exploration expenditure in
2015 amounted to A$10 million on
underground and surface drilling. A
total of 50,278 metres of drilling was
completed.
79
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
Granny Smith
Tarkwa
Damang
Mineral Resource reconciliation
(Gold – Moz)
Mineral Resource reconciliation
(Gold – Moz)
Mineral Resource reconciliation
(Gold – Moz)
6.0
5.0
4.0
3.0
2.0
1.0
0
1.89
5.28
3.70
(0.31)
Dec 2014 Depletion
Growth
Dec 2015
12.0
10.0
8.0
6.0
4.0
2.0
0
9.57
(0.63)
0.50
9.44
Dec 2014 Depletion
Growth
Dec 2015
6.0
5.0
4.0
3.0
2.0
1.0
0
5.26
(0.20)
0.56
5.63
Dec 2014 Depletion
Growth
Dec 2015
Mineral Reserve reconciliation
(Gold – Moz)
Mineral Reserve reconciliation
(Gold – Moz)
Mineral Reserve reconciliation
(Gold – Moz)
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
7.49
(0.63)
0.11
6.97
Dec 2014
Depletion Replacement Dec 2015
Initial auger and diamond drilling was
carried out at Tarkwa during 2015 at
a cost of around US$840,000. This
was undertaken in areas identified
under the geochemical soil sampling
programme, which was carried out
in 2014 to explore parts of the
concession that previously had
limited exploration.
Even though some good results were
returned in a number of framework
holes, continuity and thickness still
need to be confirmed. These areas
will be the focus for 2016, for which
a budget of US$1.5 million has been
allocated.
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
1.23
(0.20)
0.07
0.96
Dec 2014
Depletion Replacement Dec 2015
Although no greenfields exploration
projects were carried out during
2015, a number of resource infill and
extension drilling programmes were
conducted at the various pits that
encompass the Greater Damang ore
body, as well as the Amoanda pit.
The primary objectives of the year’s
drilling campaign were to:
❯ Enhance the understanding of the
geology and controls on grade
distribution in critical areas
❯ Increase confidence in the
resource models
❯ Add Mineral Resources by the
further development of projects
with infill drilling
The 2015 phase of reverse
circulation and diamond drilling
which were completed at the Huni,
Saddle, Juno and Juno South pits,
have been included in the 2015
Damang resource model. The total
exploration expenditure for 2015 was
US$1.7 million.
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
0.75
1.37
0.87
(0.25)
Dec 2014
Depletion Replacement Dec 2015
Increased exploration expenditure was
directed to co-ordinated work on a
range of activities from earliest stage
target identification through to the
definition of extensions to the
Wallaby deposit. A large number of
target areas were uncovered that
warrant a wide-ranging, early stage
air-core drilling project involving
57km of drilling across both the
land-based tenements and Lake
Carey – a large salt lake beneath
which limited exploration work has
been conducted to date.
Some targets identified by the early
stage work, were tested with 16km
of reverse-circulation and diamond
drilling. An intense programme,
including 87km of extensional and
in-fill diamond drilling, targeted the
Wallaby ore body to increase the
reserves and resources around and
ahead of the current production zones.
The exploration programme was
successful, revealing promising
prospects for further investigation in
2016 and, at Wallaby, resulting in net
additions of 1,500,000 ounces in
resources and 440,000 ounces in
reserves. Overall a post-depletion
increase of 43% in resources and
50% in reserves was achieved.
80
The Gold Fields Integrated Annual Report 2015
Update on growth projects
Two advanced growth projects
justified continued inclusion in Gold
Fields’ growth portfolio. Salares
Norte in Chile meets all of the key
criteria. It is in ‘the right address’,
offers the right metal and is
commercially sustainable. Far
Southeast in the Philippines offers a
world-class copper-gold deposit with
the potential to deliver substantial
strategic benefits to the Group in the
long term.
Salares Norte, Chile
The Salares Norte advanced drilling
project is 100% Gold Fields owned
and is focused on a gold-silver
deposit in the Atacama region of
northern Chile. Mineralisation is
contained within a high-sulphidation
epithermal system – offering
high-grade oxides. The project is
located within a core 900ha
concession area – and Gold Fields
enjoys an option to purchase two
adjoining concessions that would
add a further 2,100ha.
In December 2015, Gold Fields
updated the project's Mineral
Resources, reporting a total
26.8 million tonne Mineral Resource
of 3.3 million ounces of gold at a
grade of 3.9g/t, and 42.1 million
ounces of silver at an average grade
of 48.9g/t. We upgraded 31% of
Mineral Resources from inferred
to indicated status. Preliminary
indications, supported by
metallurgical test work, suggest
Carbon-in-Leach processing could
deliver recovery rates of around 90%
for gold.
Water security remains a challenge to
project execution and operation. While
Salares Norte has access to a nearby
reservoir with sufficient supplies, the
project team is currently meeting with
officials from the Water Bureau and
the Ministry of National Assets in
dealing with the administrative
applications that have been
submitted. Gold Fields is also in the
process of obtaining land access for
the project's development and is in
negotiation with the state over the
land valuation.
Finally, a new Environmental Impact
Declaration study was presented to
the authorities in January 2016 and is
currently under evaluation.
Although there are no indigenous
ancestral lands present within the
direct project area, the project team
is engaged with the surrounding
indigenous communities. During
2015, the project made a total of
US$40,000 contribution to social
investment projects and will continue
supporting these communities during
2016.
Salares Norte offers significant
potential in terms of future cash
generation, provided that the
requested water permits are granted.
A project manager has been
appointed for Salares Norte
overseeing the work of a team
of 100 people. A budget of
US$56 million has been made
available for further drilling and
studies in 2016, following on the
US$17 million spent in 2015.
Far Southeast, Philippines
The Far Southeast project is a
proposed underground mine located
in northern Luzon province – 250km
north of Manila. The 900 million
tonne copper-gold porphyry ore
body has grades of approximately
0.7g/t gold and approximately 0.5%
copper. At the end of December
2012, it declared an Inferred Mineral
Resource of 19.8 million ounces of
gold and 9,921Mlb of copper.
The project is held by Far Southeast
Gold Resources (FSGRI) in which
Gold Fields has a 40% interest, with
an option to increase its stake to
60%, and is adjacent to an existing
mining operation with established
infrastructure. Lepanto Consolidated
Mining of the Philippines holds the
remaining 60% interest and manages
the existing mining operation. In late
2015, Gold Fields impaired its
investment in Far Southeast by
US$101 million from US$230 million
to US$129 million, as determined by
an evaluation of Lepanto’s market
value on the Philippine Stock
Exchange.
For Gold Fields to obtain a further
20% interest in the project, a
Financial or Technical Assistance
Agreement (FTAA) is required from
the Philippine Government, and is
dependent on obtaining the Free,
Prior and Informed Consent (FPIC)
of the local Kankana-ey indigenous
people. In mid-2013 the Kankana-ey
people voted in favour of the project
and a formal Memorandum of
Agreement (MOA) was signed with
the Council of Elders in February
2015. The MOA and supporting
documentation are currently being
considered by the National
Commission on Indigenous Peoples
(NCIP) before issuance of a formal
Certification Precondition, which will
complete the FPIC process.
Lepanto and FSGRI jointly applied for
the renewal of the mineral tenement
in June 2014, to pre-empt the
expiration of the initial 25-year term
of the mineral tenement in March
2015. In February 2015, Lepanto
and FSGRI commenced arbitration
proceedings against the Philippine
government on whether an FPIC is
also required for the renewal of the
mineral tenement. In November
2015, the arbitration panel issued an
award that FPIC may not be validly
imposed as a requirement for the
renewal of the mineral tenement and
that it should be renewed. This
arbitration is now under dispute by
the Philippine government. Similarly,
conversion of the mineral tenement
into an FTAA has been declined at
this stage by the mining regulator
and FSGRI is appealing the decision.
Amid the legal and administrative
delays, the holding costs of this
project have been reduced to
approximately US$250,000 per
month, related mainly to community
engagement work as well as
activities to support the permitting
process.
Further material development of the
project will be dependent on Gold
Fields obtaining the majority
ownership and receiving an FTAA.
81
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
Mineral Resource and
Mineral Reserve Statement
Gold Fields’ Mineral Resource and
Mineral Reserve strategy is focused
on realising each assets’ full potential
through appropriate funding and
technical investment in exploration,
resource development and reserve
growth to support operational
flexibility and longer-term
sustainability. Key deliverables are
cash flow, profitability and return on
investment. The strategic priorities
are to:
❯ Build a quality portfolio of
productive mines through active
portfolio management
❯ Grow through value-accretive
acquisitions and near-mine
exploration
❯ Grow Reserves to increase critical
mass and improve flexibility per
operation
❯ Minimise marginal mining at all
operations
❯ Divest growth projects that are not
fully aligned with our business
objectives
❯ Manage the environment
responsibly
❯ Build strong relationship and trust
in the communities where we
operate
This declaration is based on a
Mineral Resource gold price of
US$1,500/oz (A$1,750/oz;
R550,000/kg) and a Mineral Reserve
price of US$1,200/oz (A$1,500/oz;
R500,000/kg) for 2016 and 2017,
reverting to US$1,300/oz
(A$1,550/oz; R500,000/kg) post
2017. The initial gold price
(US$1,200/oz) used for the Mineral
Reserve declaration is within the
guidelines of the US Securities and
Exchange Commission (SEC), as it is
lower than the three-year trailing
average price of US$1,280/oz. The
copper price used for Mineral
Resource estimation is US$3.5/lb
and for Mineral Reserves US$2.7/lb
for 2016 and 2017, reverting to
US$3.0/lb post 2017.
82
Although the US Dollar gold price
used for the Mineral Reserves is
close to the current spot price, the
Group’s focus on strategically
positioning the operations to deliver
leading AIC, AISC and cash flow
margins, underpins their resilience to
gold prices periodically trending
lower. Business planning, over the
next five years, entails the selection
of cut-off grades, optimised pit
shells, pit staging and stope
sequencing with the objective of
ensuring that operations are
sustainable and cash generative in
the short to medium term at lower
gold prices. The Group’s
commitment to ongoing exploration
and resource to reserve conversion
aims to ensure a quality pipeline of
Mineral Reserves that will maintain
operational flexibility and assist in
sustaining margins at varying gold
prices going forward. Annual
production alignment to relevant
Mineral Reserve mill-head grades
shows that, notwithstanding our
focus on cash flow margins, we
ensure retention of the longer term
life-of-mine (LOM) integrity.
This section represents a condensed
and consolidated overview of Gold
Fields’ Mineral Resources and Mineral
Reserves. Full details are available in
the Gold Fields’ Mineral Resource and
Mineral Reserve Supplement to the
IAR. The Supplement contains a
comprehensive review of the Group’s
Mineral Resources and Mineral
Reserves as at 31 December 2015,
including additional detail on individual
operations with respect to location,
mine infrastructure, key operating
statistics, geology, mining, processing,
projects and sustainable development.
It is available on the Gold Fields
website at www.goldfields.com/inv_
rep_ar.php
Corporate governance
The reporting of Mineral Resources
and Mineral Reserves for Gold Fields
operations and projects is
undertaken in accordance with the
principles and guidelines of the
South African Code for the Reporting
of Exploration Results, Mineral
Resources and Mineral Reserves
(SAMREC Code) and Industry Guide
7 for reporting to the SEC. Other
relevant international codes are
recognised where geographically
applicable. The first version of the
SAMREC Code was issued in March
2000, updated in 2007 and again
amended in July 2009; the JSE
subsequently incorporated this new
version into its Listings and
Reporting Requirements.
The respective operation-based
Mineral Resource Managers,
Technical Managers and relevant
Project Managers have been
designated as the Competent
Persons in terms of SAMREC and
take responsibility for the reporting of
Gold Fields Mineral Resources and
Mineral Reserves. Corporate
governance on the overall regulatory
compliance of these figures has been
overseen and consolidated by the
Gold Fields Group Competent
Person, Tim Rowland, who consents
to the disclosure of this Mineral
Resource and Mineral Reserve
Statement. Mr Rowland is Vice-
President, Mineral Resource
Management and Mine Planning,
Pri-Sci Nat No 400122/00, BSc
(Hons) Geology, MSc Mineral
Exploration, GDE Mining Engineering
and FSAIMM, FGSSA and GASA),
with 30 years’ relevant experience
in the mining industry. He is a
permanent employee of Gold Fields.
In line with the Group’s commitment
to sound corporate governance, this
statement has been internally
reviewed by regional and corporate
technical and financial experts and,
where applicable, also reviewed by
leading independent mining
consultancies. This declaration has
been found to fulfil the requirements
of the relevant reporting codes, and
the procedure followed in producing
the statement is aligned to the
guiding principles of the United
States’ Sarbanes-Oxley (SOX) Act
of 2002.
The Gold Fields Integrated Annual Report 2015 at South Deep), the sale of the
Woodjam project, as well as mining
depletion for the year, were primarily
responsible for the year-on-year
reduction in managed Mineral
Resources (-6.7 million ounces gold),
while Mineral Reserves (-2.1 million
ounces gold) decreased in line with
mining depletion (2.1Moz), while gold
lock-up from additional geotechnical
pillars at South Deep were
counterbalanced by discovery and
modelling updates at the various
operations.
The respective gold and copper
Mineral Resource figures (December
2015) are inclusive of all eight
operating mines, as well as the Arctic
Platinum (APP), Salares Norte and
Managed gold Mineral Resources
(Moz)
Growth projects
Americas region
Australia region
West Africa region
South Africa region
24.27
23.93
(0.34)
(0.24)
3.02
2.78
1.30
0.23
(7.61)
10.04
11.34
14.83
15.06
Far Southeast (FSE) projects. Other
commodities and metal by-products
that are reported as part of the
Mineral Resource (platinum,
palladium, nickel and silver) are
contained in the Mineral Resource
and Mineral Reserve Supplement.
The South Africa region accounts for
74% of the Group’s managed gold
Mineral Reserves, West Africa 16%,
Australia 7% and the Americas 3%.
The South Africa region accounts for
56% of the Group’s managed gold
Mineral Resources, West Africa 13%,
Australia 9%, the Americas 2% and
growth projects 20%.
76.05
68.44
(20)
0
20
40
60
80
100 Moz
Variance
Dec 2014
Dec 2015
Managed gold Mineral Reserves
(Moz)
Mineral reserve change per region
(Moz)
Americas region
Australia region
West Africa region
South Africa region
(0.21)
1.76
1.54
3.63
3.55
(0.07)
(1.01)
(0.76)
8.73
7.72
38.02
37.26
(0.5)
0
5
10
15
20
25
30
35
40
Moz
Variance
Dec 2014
Dec 2015
The headline Mineral Resource and
Mineral Reserve Statement as at
31 December 2015 is compared to
the 31 December 2014 declaration in
the graphs on this page. 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. All
metal commodities are reported
separately and not as gold
equivalents.
Although all relevant permits may not
be finalised and in place at the time
of reporting, there is no reason to
expect that these will not be granted.
However, the length of the approval
process for such permits may have
an impact on the schedules stated.
All financial models are based on
current tax regulations at
31 December 2015.
All Mineral Resource and Mineral
Reserve figures are on a managed
basis unless otherwise stated.
Mineral Resources are reported
inclusive of Mineral Reserves and
stability pillars when appropriate. The
estimated volumes are reported in
metric tonnes and rounding-off of
figures may result in minor
computational discrepancies, where
this happens, it is not deemed
significant.
At 31 December 2015, Gold Fields
had total attributable gold and
copper Mineral Resources of
102.2 million ounces (December
2014: 108.3 million ounces) and
5,912 million pounds (December
2014: 6,873 million pounds),
respectively. Attributable gold and
copper Mineral Reserves are
46.1 million ounces (December
2014: 48.1 million ounces) and
532 million pounds (December
2014: 620 million pounds)
respectively, net of mined depletion.
Mine design enhancements
(including the implementation of a
revised regional pillar reconfiguration
83
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
Gold Fields Mineral Resource Statement as at 31 December 20151, 2
Headline numbers
Managed Mineral Resources
Gold only
31 Dec 2015
Grade
(g/t)
Tonnes
(Mt)
Gold
(Moz)
31 Dec 2014
Grade
(g/t)
Tonnes
(Mt)
Gold
(Moz)
Attributable ounces
31 Dec
2015
31 Dec
2014
Gold (Moz)
Total operating mines –
Total projects –
Total operating mines & projects
856.6
1,127.0
1,983.5
97.609
3.54
0.66
23.933
1.91 121.542
903.9
1,164.6
2,068.5
3.58 103.925
0.65
24.271
1.93 128.196
90.157
12.053
102.210
96.187
12.104
108.291
Operational summary
Gold
Australia operations
Agnew
Darlot
Granny Smith
St Ives
Total Australia region
South African operation
South Deep
Total South Africa region
Peru operation
Cerro Corona
Total Americas region
Ghana operations
Damang
Tarkwa – open pits
Tarkwa – surface stocks
Total West Africa region
Gold only
GFL Operations- Total Gold
(Peru) – Cerro Corona
Copper
Copper (Cu) only
Managed Mineral Resources
31 Dec 2015
Grade
(g/t)
Tonnes
(Mt)
Gold
(Koz)
31 Dec 2014
Grade
(g/t)
Tonnes
(Mt)
Attributable ounces
31 Dec
2015
31 Dec
2014
Gold
(Koz) Mineral Resource (Koz)
16.3
1.2
30.4
29.1
77.1
331.8
331.8
109.2
109.2
79.6
192.2
66.6
338.4
5.05
6.51
5.40
3.35
4.57
6.41
6.41
0.79
0.79
2.20
1.38
0.43
1.38
2,656
260
5,279
3,141
11,336
68,436
68,436
2,777
2,777
5,625
8,511
924
15,060
13.8
1.1
17.4
30.1
62.4
382.4
382.4
115.2
115.2
85.3
193.7
65.0
344.0
5.79
7.18
6.61
3.63
5.00
6.19
6.19
0.81
0.81
1.92
1.39
0.43
1.34
2,570
263
3,696
3,508
10,037
2,656
260
5,279
3,141
11,336
2,570
263
3,696
3,508
10,037
76,046
76,046
62,503
62,503
69,804
69,804
3,015
3,015
2,764
2,764
3,001
3,001
5,260
8,679
889
14,827
5,063
7,660
831
13,554
4,734
7,811
800
13,345
856.6
3.54
97,609
903.9
3.58 103,925
90,157
96,187
Tonnes
(Mt)
Grade
(% Cu)
Copper
(Mlbs)
Tonnes
(Mt)
Grade
(% Cu)
Copper
(Mlbs)
Attributable
Copper (Mlbs)
102.0
0.41
914
108.0
0.42
1,006
910
1,001
1 Managed unless otherwise stated
2 Refer to the relevant mines for the historic grade and tonnage information
84
The Gold Fields Integrated Annual Report 2015 Gold Fields Mineral Reserve Statement as at 31 December 20151,2
Headline numbers
Managed Mineral Reserves
Gold only
31 Dec 2015
Grade
(g/t)
Tonnes
(Mt)
Gold
(Moz)
31 Dec 2014
Grade
(g/t)
Tonnes
(Mt)
Gold
(Moz)
Attributable ounces
31 Dec
2015
31 Dec
2014
Gold (Moz)
Total operating mines –
Total operating mines & projects
532.6
532.8
2.92
2.92
50.073
50.073
558.1
558.1
2.90
2.90
52.123
52.123
46.064
46.064
48.122
48.122
Operational summary
Gold
Australia operations
Agnew
Darlot
Granny Smith
St Ives
Total Australia region
South African operation
South Deep3
Total South Africa region
Peru operation
Cerro Corona
Total Americas region
Ghana operations
Damang
Tarkwa – open pits
Tarkwa – surface stocks
Total West Africa region
Gold only
Total Gold
(Peru) – Cerro Corona
Copper
Copper (Cu) only
Managed Mineral Reserves
31 Dec 2015
Grade
(g/t)
Tonnes
(Mt)
Gold
(Moz)
31 Dec 2014
Grade
(g/t)
Tonnes
(Mt)
Attributable ounces
31 Dec
2015
31 Dec
2014
Gold
(Moz) Mineral Reserve (Koz)
3.4
0.2
7.0
17.6
28.1
218.8
218.8
53.1
53.1
21.2
144.8
66.6
232.8
6.16
5.63
5.86
2.72
3.93
5.30
5.30
0.90
0.90
1.43
1.25
0.43
1.03
670
34
1,310
1,542
3,555
37,257
37,257
1,543
1,543
973
5,822
924
7,719
3.6
0.4
4.5
17.8
26.3
223.2
223.2
60.5
60.5
25.7
157.4
65.0
248.1
7.44
7.36
6.02
3.14
4.28
5.30
5.30
0.90
0.90
1.49
1.30
0.43
1.09
865
85
872
1,803
3,625
670
34
1,310
1,542
3,555
865
85
872
1,803
3,625
38,016
38,016
34,027
34,027
34,896
34,896
1,757
1,757
1,235
6,601
889
8,725
1,535
1,535
876
5,240
831
6,947
1,749
1,749
1,111
5,941
800
7,853
532.6
2.92
50,073
558.1
2.90
52,123
46,064
48,122
Tonnes
(Mt)
Grade
(% Cu)
Copper
(Mlbs)
Tonnes
(Mt)
Grade
(% Cu)
Copper
(Mlbs)
Attributable
Copper (Mlbs)
53.1
0.46
534
60.5
0.47
623
532
620
1 Managed unless otherwise stated
2 Refer to the relevant mines for the historic grade and tonnage information
3 South Deep Mineral Reserves are reported at head grade inclusive of ore and in-section waste tonnes, while the capital waste component
is excluded
85
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
Gold Fields Mineral Resource Classification as at 31 December 2015
Measured
Grade
(g/t)
Mt
Indicated
Grade
(g/t)
Koz
Mt
Inferred
Grade
(g/t)
Koz
Mt
Total
Grade
(g/t)
Koz
Koz
Mt
Cerro Corona (Gold
only)
82,565
0.86
2,282
23,317
1,136
4.25
155
9,228
0,688
16,398
17,905
538
268
0.58
5.62
6.67
5.26
3.41
434
3,335
1,667
148
2,772
1,961
5,985
0,553
11,446
6,981
0.56
4.34
6.31
5.35
4.06
60 109,217
0.79
2,777
835
112
1,969
912
16,348
1,241
30,389
29,122
5.05
6.51
5.40
3.35
2,656
260
5,279
3,141
961
44,218
4.61
6,547
24,965
4.77
3,829
77,100
4.57
11,336
2,545
4,236
7,917
6.57
1.97
3.77
South Deep
110,115
3.42
12,123 190,191
7.91
48,339
31,550
7.86
7,974 331,856
6.41
68,436
13,865
1.52
677
58,076
2.33
4,357
7,665
2.40
591
79,606
2.20
5,625
70,439
1.47
3,324 117,029
1.33
5,015
4,752
1.13
172 192,220
1.38
8,511
Agnew
Darlot
Granny Smith
St Ives
Total Australia
Damang
Tarkwa (excluding
stockpiles)
Tarkwa (including
stockpiles)
137,004
0.96
4,247 117,029
1.33
5,015
4,752
Total West Africa
150,869
1.02
4,924 175,105
1.66
9,372
12,417
1.13
1.91
172 258,785
1.13
9,435
763 338,391
1.38
15,060
Total Gold Fields
351,465
1.80
20,290 432,832
4.65
64,692
72,267
5.43
12,626 856,564
3.54
97,609
Americas
Operations
The Americas region has a declared
managed gold Mineral Resource of
2.8 million ounces at December 2015
(December 2014: 3.0 million ounces)
and a gold Mineral Reserve of
1.5 million ounces (December 2014:
1.8 million ounces). In addition, it has a
managed copper Mineral Resource
and Mineral Reserve of 914 million
pounds (December 2014: 1,006 million
pounds) and 534 million pounds
(December 2014: 623 million pounds),
respectively. The gold equivalent
Mineral Resource and Mineral Reserve
equates to 4.9 million ounces and
2.8 million ounces respectively. Of this,
99.53% is attributable to Gold Fields.
These figures are net of 240,000
ounces of gold and about 79 million
pounds of copper from mined
depletion in 2015.
Salares Norte project
Gold Fields holds a 100% interest in
the Salares Norte project, which is
situated in the Maricunga Belt,
Atacama region, in northern Chile.
The project has a Mineral Resource
of 26.8Mt, containing 3.3 million
ounces gold and 42.1 million ounces
silver, of which approximately 30% is
categorised in the Indicated Mineral
Resources category.
Australia
Operations
The Australia region has a declared
managed gold Mineral Resource of
11.3 million ounces (December
2014: 10.0 million ounces) and a
gold Mineral Reserve of 3.6 million
ounces (December 2014: 3.6 million
ounces) and is 100% attributable to
Gold Fields. These figures are net of
1.0 million ounces from mined
depletion in 2015, with replacement
occurring mostly at the underground
Wallaby ore body at Granny Smith.
A strong emphasis on exploration
funding and project pipeline
development from the orogenic style
mineralisation in the region continues
so as to maintain momentum on
discovery and resource development
opportunities to supply the next
generation of open pit and
underground mines.
Far Southeast project
Gold Fields holds a 40% interest in
the Far Southeast project, which is
situated in the mining district of
Mankayan in Northern Luzon,
Philippines. An Inferred Mineral
Resource of 891.7Mt at 0.7g/t Au
and 0.5% Cu for 19.8 million ounces
of gold and 9,921Mlb of copper was
declared in September 2012 for the
Far Southeast deposit – this remains
unchanged as at December 2015.
This resource is reported within an
optimised underground bulk mining
shell that is derived using scoping
study mining, processing and cost
parameters and mining assumes an
eventual non-selective, bulk
underground mining method.
South Africa
Operations
The South Africa region has a total
declared managed gold Mineral
Resource of 68.4 million ounces
(December 2014: of 76.0 million
ounces) and a gold Mineral Reserve
of 37.3 million ounces (December
2014: 38.0 million ounces), of which,
91.3% is attributable to Gold Fields,
in line with the agreed phase-in
participation of Black Economic
Empowerment (BEE) partners over
20 years. Ultimately the BEE
partners’ stake will be 10%. These
Mineral Resource and Mineral
Reserve figures are net of
198,0601 ounces from mined
depletion during 2015.
1 Reserves are at a head grade pre the processing recovery
86
The Gold Fields Integrated Annual Report 2015 During 2015, the mine successfully
concluded studies on a new regional
stability pillar configuration, which is
endorsed by the South Deep
Geotechnical Review Board (GRB).
The new regional pillar design has
been fully incorporated into the 2015
mine design and scheduling process,
which informed the December 2015
Mineral Resource and Mineral
Reserve declaration. Due to the
reduced spacing between pillars the
mine will effectively operate within six
mining corridors compared to the
previous four.
A new de-stress mining method was
developed in conjunction with the
GRB to improve safety, increase
mining productivities and simplify the
overall mining cycle. The conversion
from the historical low profile
de-stress methodology to the new
high profile de-stress mining method,
has been rolled out across all the
de-stress sections on the mine, with
the exception of the mature 951W
area, where the current de-stress
method will be maintained until
completion.
In addition to the new de-stress
mining method and revised
geotechnical support regime with
resultant enhancements to the mine
design layouts, Gold Fields is
undertaking a holistic strategic
review of the operation with the
objective of assessing longer-term
optionality at the mine. The intent of
this re-basing study is to select the
most appropriate business plan for
the mine that will guide South Deep
forward to ensure delivery as a core
franchise asset. This will be
communicated to shareholders in
early 2017. The current life-of-mine,
which forms the anchor to the
re-basing project, is estimated to
be 80 years.
West Africa
Operations
The West Africa region has a
declared managed gold Mineral
Resource of 15.1 million ounces
(December 2014: 14.8 million
ounces) and a gold Mineral Reserve
of 7.7 million ounces (December
2014: 8.7 million ounces), which are
90% attributable to Gold Fields.
These figures are net of 754,0001
ounces from mined depletion in
2015.
The programme at Damang to
assess all relevant options that have
the potential to deliver maximum
value from the asset to Gold Fields is
ongoing and various alternative
investment opportunities will be
tabled by mid-year. In the interim, the
mine will revert to contractor mining
at the end of Q1 2016 in alignment
with a reduced short term mining
footprint. The Mineral Reserve of
1.0 million ounces is based on the
current Operational and LOM plan.
Tarkwa’s Mineral Resource of
9.4 million ounces remained fairly
steady and the Mineral Reserve of
6.7 million ounces decreased in line
with mining depletion and updated
resource modelling. On-site
exploration opportunities are being
considered and tested.
Projects for disposal
Arctic Platinum project (APP)
The total Mineral Resource figures
for APP (100% attributable to
Gold Fields) remain unchanged
year-on-year. APP in Finland has a
Mineral Resource of 786,000 ounces
of gold, 2.4 million ounces of
platinum and 9.8 million ounces of
palladium – as well as 1,034 million
pounds of copper and 438 million
pounds of nickel. The project has
been put up for sale as part of the
commitment to divest growth
projects that are not fully aligned with
our business objectives.
❯ Drilling at Salares Norte, Chile
87
The Gold Fields Integrated Annual Report 2015 4.3 Business optimisation – Strategic focus areas (continued)
around the world to develop an
image algorithm that can classify ore
material in a gold mine as high,
medium or low-grade, or waste.
Gold Fields offered A$12,500
(US$9,000) in prizes to the top three
entries. Almost 270 contestants
participated and the winning
algorithms have been built into a
geology software package, named
Leap Frog, which allows mining data
to be converted into easy to use
software. This programme has been
expanded to collect and evaluate
data from new MVS sensors at our
St Ives mine.
Cyest – This South African
technology company is working at
our South Deep mine to scientifically
determine the capacity of the mine’s
full value chain. In addition, the firm is
developing an advanced visualisation
of South Deep, to convey the
complexity of the mining process to
internal and external stakeholders.
Cyest is using four different systems
and solutions at South Deep:
❯ Advanced simulation of the
sequence of activities and
equipment interactions along
the underground value chain
❯ Validating and improving the
mining schedule by modelling the
interaction of different mining
activities as a function of mine
layout, efficiencies and other
factors
❯ Modelling the link between
operational drivers to identify
what interventions are needed to
achieve the desired financial
results
❯ Using an advanced gaming
platform to create a high fidelity
visualisation of the ore body and
the associated mining methods
Technology and innovation
For the past few years, Gold Fields
was a fast adopter of best practice
technology rather than a pioneer of
research and development in areas
such as technology. The cost of
developing and applying cutting
edge practices was simply too
expensive.
However, recent advances in
digitisation, automation and
mechanisation make it critical that
we develop strategies to implement
new technologies and partner with
IT and OEMs that are leaders in the
field. A number of technology
companies are working on software
advances in mining, which can be
grouped under the ‘Big Data’
heading, where data is captured by
various sources, digitised, analysed
and finally leveraged for better
decision making. This has multiple
applications for mines, such as
geological mapping, geotechnical
design, fleet tracking and operator
safety. We believe that such
technologies will provide us with the
edge to fundamentally change our
cost structure and improve safety.
We have appointed a new member
to our Executive Committee to
oversee our progress in this area
and to oversee the development of
three-year technology and innovation
programmes in each of our regions.
Gold Fields has started embracing
digital mining, advanced analytics
and new software technologies and
during 2015, we started working with
a number of technology companies
at our operations in Australia and
South Africa to implement these
technologies:
Mine vision Systems (MvS) – In
2007, Gold Fields started work with
Carnegie Mellon University (CMU) in
the US to develop mining robots.
While the robots were ultimately
unsuccessful, the robotic vision
component from this programme
went on to the used in military
88
applications, oil and gas, heavy
industry, autonomous cars and
mining. Robotic vision is one the fast
growing and influential technologies
on the world today.
In 2015, Gold Fields asked CMU to
spin out the technology for mining,
with Gold Fields providing the initial
US$3 million seed funding to create
MVS. This gives Gold Fields a 10%
share in MVS with a first right access
to technology developed by the
company.
Since then MVS has put in place
30 non-disclosure agreements with a
number of leading software providers
and equipment manufacturers and is
in early conversations with another
40 interested companies.
MVS provides a system to collect
mining data using cameras, sensors
mounted on machinery and Light
Detection and Radar technology.
(Lidar) This data can then be
converted into meta-data,
compatible with most major mining
software providers today. This data is
already being used to identify
geology, ore fragmentation,
convergence and is the basis for
geotechnical modelling and machine
automation at our mines in Australia.
Robotic vision is one of the fastest
growing technology areas in the
world today.
GlassTerra – This Australian
start-up technology company, staffed
by geo-spatial software engineers
and mining experts, is tackling the
impending big data challenges facing
global mining companies as the
amount of digital mining data
available grows exponentially.
Gold Fields worked with GlassTerra
to run the Ore-X Challenge in August
2015. Ore-X was the world’s first
open crowd-sourcing challenge to
solve operational problems in the
mining industry. Glass Terra made
Gold Fields’ 3D geo-spatial data
available and asked experts from
The Gold Fields Integrated Annual Report 2015 5
Social licence to operate
5.1
Introduction
5.2 Strategic focus areas
❯ Energy and carbon
❯ Water
❯ Waste and tailings
❯ Mine closure
❯ Government relations
❯ Community relations
❯ Shared Value
❯ Human rights
p90
p92
p92
p97
p102
p103
p104
p108
p117
p120
❯ Tailing Storage Facility at Cerro Corona
89
The Gold Fields Integrated Annual Report 2015 5.1 Social licence to operate –
Introduction
If not managed optimally, the
environmental and social impacts
associated with mining have the
potential to affect both the physical
environment and our key
stakeholders. Sustainable
development and social incidents
can materially impact Gold Fields’
ability to receive or renew its
regulatory licences to operate as well
as societal acceptance of our
operations. The potentially adverse
reputational impacts of such
incidents are also significant.
In our 2015 Group Performance
Scorecard (p12), we have grouped
these issues under the topic of
Social Licence to Operate, which
focus on the following material issues
to the business:
❯ Environmental stewardship,
comprising Energy and Carbon
management, Climate change,
Water, Waste and Mine Closure
❯ Societal acceptance, comprising
Stakeholder engagement,
Community relations and Shared
Value and Human rights
Environmental stewardship
Gold Fields’ approach to environmental
management is determined by
relevant local legislation and regulations,
our sustainable development
framework, as well as the ISO 14001
international environmental
management standard, the ten
principles of the International Council
on Mining and Metals (ICMM) and the
UN Global Compact. All the Group’s
operations are certified to ISO 14001.
During 2015, the Group spent
US$35 million on environmental
management (2014: US$27 million).
Total gross mine closure liabilities
in 2015 were estimated at
US$353 million (2014:
US$391 million) (p103).
In 2014 and 2015, we implemented
four new Group-level guidelines, which
reflect the sustainable development
priorities for Gold Fields and are
discussed in detail in this section.
These are:
❯ Energy and carbon management
(p92)
❯ Water management (p97)
❯ Mine closure management (p103)
❯ Community relations and
stakeholder engagement (p108)
A summary of the Group guidelines
can be found on the Gold Fields’
website at www.goldfields.com/sus_
guide.php. These guidelines will help
ensure the application of consistently
good environmental management
practices across the Group while
allowing a degree of regional
adaptation to suit local
circumstances.
To ensure Group-wide conformance
with the guidelines, each operation
conducted self-assessments to
ascertain the levels of conformance
with the guidelines. Action plans
have been put in place to address
any gaps during 2016.
Operational level grievance
mechanisms as well as regular
community relations and stakeholder
engagement forums allow
stakeholders to communicate
environmental issues and complaints
against the Company.
Environmental incidents
Gold Fields reports environmental
incidents using a Level 1 (most minor)
to 5 (most severe) scale1. Gold Fields
has not recorded any Level 4 or 5
environmental incidents in the past
five years thereby achieving our
target of zero Level 4 and 5 incidents.
During 2015, we did, however,
experience 67 Level 2 environmental
incidents (2014: 58) and five Level 3
environmental incidents (2014: four).
Though we reduced the number of
Level 3 incidents, we failed to meet
our 2015 target of reducing the
number of Level 3 incidents by 50%.
These targets (zero Level 4 and 5
incidents and 50% annual reduction
in Level 3 incidents) have been
retained in 2016. The details of the
Level 3 incidents – at our South Deep
mine in South Africa and the
Tarkwa mine in Ghana – were as
follows:
❯ South Deep, 24 August: The
mine noted ongoing exceedences
of the authorised limits for ammonia
nitrogen and suspended solids
during the daily discharge of treated
sewage effluent into the Leeuspruit
river (as authorised by South
Deep’s water use licence) due to
two of the aerators not operating.
The aerators were repaired
❯ South Deep, 12 October: The
mine noted ongoing exceedences
of the authorised limit for ammonia
during the daily discharge of
treated sewage plant effluent into
the Leeuspruit, again due to a
non-operational aerator. The
aerator was repaired. In order to
prevent a recurrence of aerator
related issues, the planned
maintenance schedule has been
enhanced
❯ Tarkwa mine, 16 June: The left
track of an excavator lifted a piece
of rock that struck the hydraulic
shut-up valve. About 1,544 litres of
hydraulic oil was spilled, which
was collected and all
contaminated material was
disposed of in accordance with the
mines waste management
procedures
❯ Tarkwa mine, 8 October:
Approximately 2,939 litres of oil
was spilled when an excavator’s
hydraulic hose underneath the
counter-weight burst. This
occurred when the excavator got
bogged down while working in a
pit. The oil and contaminated
material was promptly cleaned up
in accordance with the mines
waste management procedures
and the hose replaced
❯ Tarkwa mine, 8 November: The
right track of an excavator lifted a
piece of rock that perforated the fuel
tank of the excavator. About 1,200
litres of fuel leaked into the ground
and was trapped in an in-situ layer
of an impermeable dyke. The
contaminated soils were then dug
up for appropriate disposal
1 Levels 1 and 2 involve minor incidents or non-conformances, with negligible or short-term limited impact. A Level 3 incident results in
limited non-conformance or non-compliance that result in ongoing but limited environmental impact. Level 4 and 5 incidents include
major non-conformances or non-compliances, which could result in long-term environmental harm, with company or operation-
threatening implications and potential damage to company reputation.
90
The Gold Fields Integrated Annual Report 2015 Group environmental performance
Environmental incidents (Level 2)
Environmental incidents (Level 3)
Water withdrawal (Mℓ)1
Water discharge (Mℓ)
Gross closure costs (provisions) (US$m)
CO2 emissions (scope 1 and 2 ) ('000 tonnes)5,7
CO2 emissions (scope 3 ) ('000 tonnes)5,7
Electricity (MWh)1
Diesel (TJ)1
Carbon emission intensity (tonnes CO2-e/oz)3
NOx, SOx and other emissions (tonnes)4
Cyanide consumption (tonnes)6
Mining waste ('000 tonnes)
Materials ('000 tonnes)
2015
2014
2013
67
5
35,247
18,4922
353
1 323
431
58
4
30,207
11,620
391
1 258
436
49
3
30,302
2,5268
355
1 235
496
1,322,353
1,338,074
1,382,105
6,930
0.59
21,073
7,820
167,357
145
6,066
0.55
20,084
10,660
138,522
144
5,509
0.61
17,942
13,660
190,007
176
¹ The numbers disclosed only include our operations, as regional and the corporate head offices are not considered to be material
² Granny Smith has authorisation to discharge ground water into Lake Carey and the Tarkwa mine treats and discharges the water from its
heap leach facilities into the environment. At Damang, water was pumped from the inactive Rex pit, treated via a series of ponds and
trenches for pH adjustment before being discharged into an ambient water body
³ Scope 1 and 2 only
4 Numbers differ in comparison to what has been reported in previous years due to applying air emission conversion factors that are based
on global averages as determined by the Environmental Protection Agency (EPA)
5 The CO2 emissions numbers include head offices
6 Reduction in cyanide consumption is due to campaign milling at St Ives, as well as change in ore type and business improvement
initiatives at Tarkwa
7 Scope 1 emissions are those arising directly from sources managed by the company. Scope 2 emissions are indirect emissions generated
in the production of electricity used by the company. Scope 3 emissions arise as a consequence of the activities of the company, such as
air travel
8 No water was discharged at our St Ives and Agnew mines in 2013, while the closure of the South Heap Leach at Tarkwa also led to a drop
in water discharged
Societal acceptance
The success of our business is
critically dependent on our
relationship with key external
stakeholders that determines both
our regulatory environment and our
social licenses to operate. These
stakeholders include governments at
a national, regional and local level
and, above all, the communities that
host our mines. We, therefore,
devote considerable resources and
energies to securing and maintaining
these licences.
This is not merely a compliance-
based approach but one that seeks
to ensure that we secure the
long-term support and acceptance
of governments and communities
through the sustainable development
of our mines and projects. We
believe that we do indeed generate
and share significant value for the
societies in which we operate.
Our total value distribution,
graphically depicted on page 10,
details the value creation at Group
level as well as in our four countries
of operation.
Despite a third year of considerably
lower gold price environment, in
2015, Gold Fields continued to
distribute a similar level of value
(compared with the prior years) to a
wide range of stakeholders, including
employees, host governments, host
communities, businesses and
suppliers as well as the providers of
capital.
In 2015, our total value distribution
– reported according to World Gold
Council methodology – was
US$2.401 billion (2014:
US$2.650 billion), with 69% going to
businesses and suppliers (2014:
69%), 8% to governments (2014:
7%), 17% to employees (2014:
18%), 5% to capital providers
(2014: 5%) and 0.5% on Socio-
economic Development (SED) spend
(2014: 1%) – mostly in host
communities. The slight decline in
the total value distribution was largely
due to a cutback in spending with
business suppliers and partners
amid lower operational expenditures.
91
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate –
Strategic focus areas
Energy and carbon
The management of energy use and
the related costs is a business
imperative for us, even more
challenging in the context of
declining ore grades, dynamic mining
conditions and increasing energy
tariffs in our regions. As such, energy
management (comprising both
electricity and fuel) remains a top
priority – in terms of controlling both
costs and carbon emissions as well
as ensuring security of supply.
Group energy spending as a
percentage of operating costs
increased to 22% in 2015 (2014:
21%), however this reflected mostly
the Group’s reduction in operating
costs. Actual energy spend declined
to US$312 million (2014:
US$361 million).
While Gold Fields mined more tonnes
in 2015 compared to 2014, mining
intensity remained flat at 0.07 GJ/
tonnes-mined, while our energy
intensity per ounce produced
increased by 9% to 5.02 GJ/oz from
4.56 GJ/oz in 2014. This was largely
due to declining ore grades and the
increased use of diesel power
generators to ensure security of
supply at our Ghanaian operations.
Through energy efficiency and
business optimisation initiatives,
Group cumulative energy savings
reached 777,914GJ between 2012
and 2015. This was a 7%
improvement on what we had
budgeted for over that period,
resulting in US$30 million in
cumulative cost savings and
avoidance of 109,000 CO2-
equivalent tonnes in carbon
emissions.
integrated Energy and Carbon
Management Strategy
Gold Fields integrates energy and
carbon management into all aspects
of its business through its Integrated
Energy and Carbon Management
Strategy. This strategy seeks to
ensure energy security; decrease
carbon emissions; explore immediate
and long-term energy efficiency
opportunities, and investigate and
implement viable sources of
renewable energy.
During 2015, all regions were tasked
with developing and implementing
five-year energy security plans, with
the South Deep and Ghanaian mines
being identified as facing the greatest
energy-security risks. But these
operations also present the most
significant opportunities for
renewable energy integration.
Gold Fields remains committed to
renewable energy solutions at its
operations as well as new mine
developments. During the year, we
initiated a renewable energy project
at South Deep (p95) and installed
solar power at our head office in
Johannesburg to meet half our
electricity demand. For all new
projects, we have set a target of an
average of 20% renewable energy
generation for all new mine
developments – our Salares Norte
project in Chile is actively seeking
renewable energy sources as part of
its ongoing activities.
Energy and carbon performance,
with a strong focus on costs savings,
and energy security – including the
evaluation of renewable energy
– were contained in the balanced
scorecards of senior and line
management in 2015.
Some of the salient features of the
Group’s energy and carbon
performance during the year were:
❯ Diesel consumption rose from
169,000 kℓ in 2014 to 193,000 kℓ
amid among others, increased
reliance on diesel generators at our
Ghanaian mines and declining ore
grades at a number of our
operations
❯ Our diesel spend declined in line
with the lower oil prices, while the
stronger US Dollar against the
Australian Dollar and the South
African Rand resulted in lower
power and fuel costs, which are
denominated in US Dollars
❯ Total electricity consumption for
the Group was steady at
1,322,353 MWh compared with
1,338,075 MWh in 2014, reflecting
significant energy savings at our
Australian mines and a shift
towards diesel- generated power
at our Ghanaian mines
❯ Total energy consumption
increased by 7% from
10,465,746 GJ1 in 2014 to
11,240,369 GJ1 in 2015 due to
higher diesel usage
❯ Total carbon emissions increased
by 3.4% (59,120 CO2-equivalent
tonnes) to 1,753,163 CO2-
equivalent tonnes from 1,694,043
in 2014 CO2-equivalent tonnes
With energy accounting for 22% of
operating costs, Group-wide, energy
efficiencies and energy savings are
critical components of our cost
savings initiatives. Energy savings
from initiatives are recognised for
36 months, after which they become
part of the baseline. Rolling energy
savings performance targets are set
at the beginning of each year,
considering operational business
plans. For 2016 we are targeting
savings of 6% on our initial energy
consumption estimate of 10,992 TJ.
Some of the most successful energy
savings initiatives during 2015
included:
❯ Campaign milling2 initiative at
St Ives and Granny Smith
❯ Throughput improvement on the
comminution circuit at Damang,
which led to improved energy
crushing efficiencies
❯ Installation of polymer liner material
in the milling circuit at Cerro
Corona
❯ An energy efficiency fans retrofit
programme at South Deep
1 The sum of direct and indirect energy consumption reflects a conversion factor used by Granny Smith and Darlot power stations. If the
conversion factor is not applied, total energy consumption was 11,797,812 GJ in 2015 (2014: 10,997,560 GJ).
2 Campaign milling refers to the situation where the milling process is only in operation when sufficient ore has been provided for the mill to
run for a prolonged period. Typically, a mine runs a mill for two weeks then shuts it down for the next two weeks until sufficient ore has
been stockpiled.
92
The Gold Fields Integrated Annual Report 2015 Regional and Group energy and carbon performance
2015
2014
20131
13,127
32,709
4,279
102,829
152,943
148,217
234,613
549,788
449,487
1,382,106
1,009,890
2,056,610
2,137,095
5,365,150
10,568,746
9,939
75,034
2,419
81,423
168,815
13,4553
76,867
2,457
99,739
192,517
143,441
296,989
476,767
420,878
1,338,075
145,361
277,521
484,256
415,215
1,322,353
876,812
3,285,225
1,807,258
4,496,451
10,465,746
1,012,363
3,250,575
1,835,467
5,141,964
11,240,369
Diesel consumption (kℓ)
Americas
Australia
South Africa
West Africa
Group
Electricity purchased (MWh)
Americas
Australia
South Africa
West Africa
Group
Total energy consumption (GJ)2
Americas
Australia
South Africa
West Africa
Group
Energy intensity (GJ/oz produced)
Americas
Australia
South Africa
West Africa
Group
Total energy costs (US$m)
Americas
Australia
South Africa
West Africa
Group
Energy costs as % of Opex (%)
Americas
Australia
South Africa
West Africa
Group
emissions (tonnes) (Scope 1 – 3)4
CO
2
Americas
Australia
South Africa
West Africa
Group
-e/oz)
Carbon emission intensity (tonnes CO
2
Americas
Australia
South Africa
West Africa
Group
1 Australia numbers exclude the Yilgarn South assets
2 The sum of direct and indirect energy consumption reflects a conversion factor used by Granny Smith and Darlot power stations. If the
100,645
537,662
539,057
516,679
1,694,043
124,030
536,782
531,078
561,273
1,753,163
22.61
130.43
33.11
175.14
361.29
21.08
96.43
31.00
163.16
311.67
2.69
3.18
9.01
6.11
4.56
3.42
3.28
9.27
6.82
5.02
0.19
0.37
2.48
0.43
0.55
0.27
0.39
2.73
0.49
0.59
15
18
13
31
22
14
18
13
32
21
110,598
331,803
611,248
677,706
1,731,355
26.91
54.25
40.56
184.22
305.94
0.22
0.37
1.85
0.49
0.62
3.19
3.40
7.07
6.83
5.26
17
10
13
29
18
conversion factor is not applied, total energy consumption was 11,797,812 GJ in 2015 (2014: 10,997,560 GJ).
3 Higher diesel consumption at Cerro Corona is due to increased haulage distances because of the deepening of the pit
4 Incudes head offices
93
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Group direct and indirect
energy consumption
(TJ) (Terajoules)
1200
1000
800
600
400
200
0
6
7
9
,
4
3
9
5
,
5
7
1
8
,
4
0
8
1
,
6
0
6
7
,
4
7
3
0
,
7
2013
Indirect
2014
Direct
2015
Group energy intensity
GJ (Gigajoules)
6.0
5.0
4.0
3.0
2.0
1.0
0
6
2
.
5
2
0
.
5
6
5
.
4
5
0
.
0
7
0
.
0
7
0
.
0
2013
GJ/oz mined
2014
2015
GJ/tonnes mined
regional energy performance
and security
In 2015, we developed regional
five-year energy security plans. Our
regional operations face varying
degrees of energy supply
interruptions and tariff volatility. These
factors as well as low-carbon energy
availabilities were assessed in the
development of the energy security
plans.
Americas region
Energy security is not an issue at our
Cerro Corona mine, which has an
electricity supply agreement with
independent power provider (IPP)
Kallpa until 2027. Since Kallpa uses
gas as its power-source it also
contributes to low carbon intensity.
Cerro Corona has therefore focused
on energy management and from
2016 onwards operational energy
performance targets will be
94
correlated with key operational
issues such as ore hardness and
hauling distances. Energy efficiency
initiatives saved the mine
US$3.2 million in 2015.
Australia region
Gold Fields’ Australian operations
have limited, but stable, power
supply options due to the remote
nature of their operations. Both
Agnew and St Ives have power
purchasing agreements (PPA) with
BHP Nickel West, which will
guarantee energy supplies until 2019
and 2023 respectively. The PPAs are
based on gas-generated electricity,
which will help reduce the carbon
intensity of these mines. This is also
the case for Darlot.
At Granny Smith all the necessary
approvals for the construction of the
gas fired power station, along a new
gas pipeline being constructed for
the nearby Tropicana mine, have
been secured. Construction of the
gas pipeline has commenced and
commissioning of the power station
is on track for April 2016. Gold Fields
has entered into a 10-year PPA. The
cost of the power station is
estimated at A$4.5 million
(US$3.3 million). Once completed
we expect savings of around
A$1 million (US$730,000) a year at
current oil prices.
In terms of energy efficiency, the
Australian operations performed well
with total energy consumption down
from 3.29 million GJ in 2014 to
3.24 million GJ, against a target of
3.20 million GJ, led by lower
electricity usage. The energy
initiatives continued to be focused
on the reduction of electricity
consumption through campaign
milling at Granny Smith and St Ives,
as well as the shutdown of the
Lawlers processing plant. This led to
absolute energy savings of 9.6%
against a regional target of 10% for
2015. This saved a cumulative
US$17.1 million in costs.
South Africa region
Given the rolling load shedding that
South Africa experienced in 2015
and the uncertainties with regard to
the electricity prices, South Deep’s
energy plans aim to build resilience in
its power supplies and manage the
price risks. Eskom continues to face
power supply constraints, due to:
❯ Historical under-investment in
generating capacity
❯ A maintenance backlog on the
ageing generation fleet of power
stations
❯ Delays in the construction of the
Medupi and Kusile coal-fired
power stations
In this context, Eskom carried out
load-shedding across the national
grid whenever its available
generation capacity could not meet
national demand. South Deep has
entered into a load-curtailment
programme with Eskom. This
requires South Deep to reduce
demand by up to 25% – depending
on the severity of the shortage – for a
specified period when the national
grid is unable to maintain its load. As
South Deep is not yet operating at
full capacity, the mine has managed
to carry out its principal mining
activities without interruption, limiting
the impact on production and
development during 2015. The mine
also uses standby diesel generators
for critical periods to ensure the
safety of our employees, should
load-shedding become unavoidable.
In March 2016, the National Energy
Regulator of South Africa (Nersa)
granted Eskom a tariff increase of
9.4% for 2016 on top of above-
inflation hikes over the previous
years.
As part of its five-year Energy
Security Plan, South Deep is
mitigating the impact of such price
rises through further energy efficiency
improvements and seeking
alternative energy sources. These
form part of its five-year energy
The Gold Fields Integrated Annual Report 2015
security plan, whose implementation
commenced early last year, with
25% of the plan completed by the
end of the year.
An essential component of the plan
is the use of solar power at the mine.
After extensive techno-economic
studies undertaken by the Richard
Branson-sponsored Carbon War
Room – Rocky Mountain Institute
(CWR-RMI1), South Deep last year
issued an initial Expression of Interest
for a 40MW photovoltaic (PV) on-site
solar electricity generation plant.
Since then 10 firm proposals were
made by IPPs and we expect to
make a final decision by mid-2016.
Key requirements of the proposals
were:
❯ Bidders had to include social
initiatives in their proposals that will
benefit our host communities
❯ The pricing proposal had to trend
in line with projected inflation rates
and ideally meet Eskom grid price
parity (at estimated 2018 tariff
levels)
❯ Black economic empowerment
ownership
South Deep will provide the land for
the solar plant and consider entering
into a 25-year PPA in accordance
with the selection criteria.
At South Deep, energy consumption
per tonne processed has improved by
10% between 2014 and 2015, though
overall energy consumption was up by
2% to 1.84 million GJ. Electricity
accounts for 13% of operating
expenses at South Deep, which is
below the Group average of 22%. We
do not envisage a significant increase
in this share as the mine has a large
fixed component of energy
consumption. Energy efficiency
initiatives achieved cost savings at
US$2.1 million in 2015.
West Africa region
Tarkwa and Damang continue to
source their power from the Volta
River Authority (VRA) and the
Electricity Company of Ghana (ECG).
Power supply in Ghana remains
severely constrained due to several
factors:
❯ Hydro-power schemes contribute
some 47% of Ghana’s power, but
with dam levels still dropping
rapidly, security of electricity supply
remains under threat
❯ Delays in the completion of
Ghana’s planned gas processing
plants
❯ Reduced gas imports due to
growing domestic demand in
Nigeria
❯ Maintenance challenges at thermal
power plants
As a consequence:
❯ Daily load-shedding of between
25% – 30% of the mines’
electricity consumption was
introduced during Q4 2014 and
persisted throughout 2015
❯ The ECG increased tariffs during
the year, while VRA tariffs were
reduced as a result of lower prices
❯ Power shortages are anticipated to
continue in the medium term as
electricity demand in Ghana is
expected to surpass generation
capacity by 2020
To address the current load-
shedding requirements, Tarkwa and
Damang initiated a number of
actions during 2015 as part of their
five-year energy security plan:
❯ Making more extensive use of
diesel generators at Damang, amid
relatively lower diesel prices
❯ Reaching a power management
agreement with the Power Ministry
for our Ghanaian mines to, when
requested, reduce load at
Damang, which, as opposed to
Tarkwa, is not running at full
capacity.
An important mitigating strategy is a
PPA with independent US-based
power producer, Genser Energy.
Implementation of this plan
commenced in 2015 and permits
have been received from the
Environmental Protection Agency
(EPA) for the construction of two
Genser-owned gas turbine power
plants near the mines. The key
features of the Genser agreement
are:
❯ It is a 20-year PPA for an initial
40MW with 20MW of power being
provided from duel-fuel turbines
(primarily gas, with an option for
coal condensate) at both Tarkwa
and Damang. Both Tarkwa’s and
Damang’s 20MW installation are
expected to be on-line by the
second half of 2016. An additional
20MW is planned for installation at
Tarkwa by January 2018
❯ The plants will have sufficient
on-site gas storage capacity to
mitigate any gas supply
disruptions. The Genser plants will
significantly improve the power
supply situation at Tarkwa, which
has a total load of 36MW, and
Damang, which has a total load
of 17MW
By January 2018, Genser should be
in a position to provide 100% of the
power supply needs at these
operations. Surplus power
produced by Genser could be
wheeled to other consumers should
Gold Fields elect to do so. The plants
were scheduled to be commissioned
in February 2015, but were delayed
primarily due to financing delays
experienced by Genser.
During 2015, energy spend at our
Ghanaian mines remained high at
around 35% of operating expenditure
– the highest in the Gold Fields
Group. This was despite the relatively
lower cost of diesel as this was offset
by higher statutory fuel levies and a
1 The CWR was founded in 2009 as a global non-profit organisation by Sir Richard Branson and a group of like-minded entrepreneurs to
accelerate the adoption of business solutions that reduce carbon emissions and to advance the low carbon economy. The RMI is an
independent non-profit organisation founded in 1982, with the mission of transforming global energy use to create a clean, prosperous,
and secure low-carbon future by accelerating the adoption of market-based solutions that cost-effectively shift from fossil fuels to
efficiency and renewable energies. CWR merged with the RMI in 2014
95
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
downward revision in electricity
tariffs. Total energy consumption at
both mines rose from 4.49 million GJ
in 2014 to 5.14 million GJ in 2015 as
diesel consumption surged from
81,423 kℓ to 99,739 kℓ.
Energy efficiency initiatives yielded
cumulative savings of 186,514 GJ
and emission reductions of 12,354
tonnes of CO2, representing cost
savings of around US$7.3 million.
Energy performance and carbon
emission targets
During 2014, each region was
required to establish energy and
carbon baselines and then set
targets for reducing energy
consumption and carbon emissions
until 2016. From 2016 onwards
operational energy performance
budgets and targets will also be
consolidated at Group level
(measured in absolute GJ, GJ/tonne
mined, GJ/oz, energy costs (US$)
and absolute carbon emission
(tonnes CO2-equivalent)).
Americas region
In 2015, Cerro Corona did not have
energy performance targets, as it
finalised the process of linking
projections of energy usage to
physical operating conditions.
Cerro Corona achieved a reduction
in electricity intensity of 3.43%
(TJ MT processed), representing a
1.97% reduction in absolute electric
energy usage (by 145,361 MWh,
equivalent to 10.53 TJ) and a 6%
increase in diesel intensity (TJ/MT
mined), representing a 2.5% increase
in diesel usage (by 328 KLT,
equivalent to 11.8 TJ). Total energy
spend reduced by US$4.42 million
attributable to lower diesel prices.
The increase in diesel usage
contributed to CO2 emissions
increasing by 0.053% to
77,579 tonnes CO2-equivalent. All
performance figures are against a
baseline year of 2013.
Australia region
The energy consumption of our
Australian mines decreased by
1.52% to 3.24 TJ (2014: 3.29 TJ),
against a target of 3.20 TJ. While
96
their CO2 emissions remained
relatively flat at 380,611 tonnes
CO2-equivalent for 2015 (2014:
381,455 tonnes CO2-equivalent)
the region achieved absolute energy
savings of 9.6% against a target
of 10%.
South Africa region
South Deep is at present exempt
from setting performance targets due
to being on ramp-up phase.
West Africa region
The energy consumption at the
Ghanaian mines increased by 12.5%
to 5.14 TJ (2014: 4.49 TJ), CO2
emissions increased by 12.96% to
364,376 tonnes CO2-equivalent
(2014: 317,142 tonnes CO2-
equivalent) while absolute energy
savings of 6.26% were recorded
against a target of 1.7%.
Carbon emissions
Carbon emissions and climate
change represent a material issue for
Gold Fields. This is due to:
❯ The long-term risks posed by
climate change both to the Group’s
own operations and to wider
society
❯ Growing efforts to regulate carbon
emissions in a range of jurisdictions
❯ The taxes increasingly attached by
governments to non-renewable
energy consumption
Gold Fields’ total Scope 1 – 3 CO2
emissions during 2015 amounted to
1,753,163 tonnes (2014: 1,694,043
tonnes), leading to a commensurate
increase in our emission intensity
from 0.55 CO2-equivalent tonnes/oz
in 2014 to 0.59 CO2-equivalent
tonnes/oz in 2015.
Emission intensity varies widely from
0.27 CO2-equivalent tonnes/oz in
Peru, which relies on gas for the
bulk of its energy requirements, to
2.73 CO2-equivalent tonnes/oz in
South Africa, which relies almost
exclusively on coal-powered electricity
for its energy supplies.
During 2015, Gold Fields’ total CO2
emissions were 3.4% higher than in
2014, largely due to the greater use of
diesel at our Ghanaian operations.
Group CO2 emissions –
Scope 1, 2, 3
(million tonnes)
2.0
1.5
1.0
0.5
0
1.73
2
4
.
0
1
8
.
0
0
5
.
0
1.69
6
4
.
0
9
7
.
0
4
4
.
0
1.75
3
5
.
0
9
7
.
0
3
4
.
0
2013
2014
2015
Scope 1 n Scope 2 n Scope 3
Emission intensity
(Scope 1 and 2 only)
(tonnes CO2-e/oz)
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
1
6
.
0
5
5
.
0
9
5
.
0
2013
2014
2015
For 2016 we are looking at
intensifying our efforts for improved
energy and carbon management
through a number of new initiatives,
ranging from deepening our
understanding of energy drivers at our
mines to increased staff awareness
and training.
We will continue to investigate
opportunities for low carbon energy
supplies at a number of our
operations, including South Deep
(p95), Tarkwa and Damang (p95) as
well as Granny Smith. At the latter,
construction of a gas plant has
begun, which has been registered
with the Australian Emissions
Reduction Fund (ERF) to achieve
savings of around 13,000 CO2-
equivalent tonnes a year once it is
fully operational, which is expected in
mid-2016. The ERF credits can be
sold with the price depending on
ruling auction prices – currently
estimated at around A$12/tonne.
Given that the total abatement will be
91,000 tonnes, this could generate
revenue of around A$1 million
(US$730,000) over seven years.
The South Deep energy efficient fans
retrofit programme was registered
with the UN Clean Development
The Gold Fields Integrated Annual Report 2015
Mechanism (CDM) in 2013. The
programme will enter its first
validation stage in 2016.
During 2016, we will also be
undertaking risk-based climate change
assessments at our operations to
identify the ones that are most
vulnerable to the impact of climate
change and develop short-term and
long-term adaptation measures.
Carbon and climate change
reporting
Gold Fields responds on an annual
basis to the international Carbon
Disclosure Project’s (CDP) climate
change and water questionnaires.
This information - along with that of
other organisations - is aggregated to
produce the Carbon Disclosure
Leadership Index (CDLI) and Carbon
Performance Leadership Index (CPLI).
In 2015, Gold Fields achieved a
disclosure score of 100% in the CDLI
and a performance rating of A- in
the CPLI. Both are an improvement
on 2014, when the Gold Fields
disclosure score was 96% and the
CPLI rating a B. The CDP in 2015
also recognised consistent
performers between 2008 - 2015.
Gold Fields was recognised as one
of four companies for being in the
CPLI for three or more years and one
of seven companies for being in the
CDLI for six or more years.
Global and national climate
change initiatives
In the build up to the 2015
Conference of the Parties (COP 21)
negotiations in Paris, the ICMM – of
which Gold Fields is a member –
released a statement in support of
the negotiations and clarified the
position of the industry with regard
to climate change. At the COP 21
negotiations, countries reached a
globally binding agreement that
would seek to limit global
temperature increases over the next
few decades.
Key implications for Gold Fields
include:
❯ Across all Gold Fields operating
regions, governments have
proposed stringent greenhouse
gas emission targets (pre-2020
and in some instances post-2020),
with increasing renewable energy
and energy efficiency drives
❯ The implementation of carbon
taxes is likely to be accelerated to
enable countries to achieve their
emission reduction targets.
Gold Fields is facing carbon taxes
in South Africa, though their
implementation is only likely from
2017 onwards
❯ Chile, Peru and Ghana have
proposed additional climate
adaptation measures, such as
reforestation, potentially presenting
an opportunity for old mining land
re-use
❯ All our operations will have to
comply with greenhouse gas
reporting requirements, such
as the Australian National
Greenhouse and Energy Reporting
(NGER) – already implemented –
and the South African National
Atmosphere Emissions Inventory
Systems (NAEIS), which is not yet
legislated.
❯ Countries have to review and
update their Nationally Determined
Commitments every five years
from 2020 to report on country
progress towards meeting the
emission reduction commitments.
Companies are expected to align
their reporting systems to be able
to supply government with the
relevant data
❯ Carbon pricing and a trading
scheme were included in the
agreement, though details were
not provided
Following the COP 21 Paris
Agreement, Gold Fields signed the
Paris Pledge for Action to
demonstrate our broad support for
the worldwide efforts to reduce global
carbon emissions. We believe,
however, that any regulatory
interventions have to be economically
sustainable for the industry and any
revenues generated used to benefit
the environment in general.
We have noted that the South African
draft Carbon Tax Bill, which was
released in November 2015, is
currently targeting only greenhouse
gas emissions according to the
Intergovernmental Panel on Climate
Change methodology. This would not
affect South Deep which does not yet
produce its own power from fossil
fuel-based sources, except through a
potential pass through from Eskom,
the state’s power utility that provides
the bulk of the mine’s power.
Water
Water management is a critical
long-term issue for the mining
industry for a number of reasons:
❯ Water is an important vector for
the potential spread of pollution
(whether as a result of an
immediate incident or the gradual
build-up and movement of
contaminants over time), making it
a critical compliance issue as well
as being a risk to the environment
and human health if not
responsibly managed
❯ Mining can require large volumes
of water and often takes place in
locations that are already water-
stressed
❯ Poor water management can have
significant social and political
consequences, where local
communities are affected by, for
example, water scarcity, high levels
of agricultural activity and a lack of
sufficient water infrastructure
In this context, Gold Fields remains
committed to responsible water
stewardship, which enables shared
benefits for our stakeholders and
security of supply for our operations.
Key enabling factors to achieve
effective water stewardship include
publicly reporting our water usage
and material water risks and
engaging pro-actively with affected
stakeholders.
In addition, Gold Fields adopts
a catchment-based water
management approach. This means
understanding the social, cultural,
economic and environmental value
of water at the catchment scale to
identify material water stewardship
risks and provide context for
operational water management. At
an operational level our mines are
tasked with managing operational
water inputs (both qualitatively and
quantitatively) and maximising
resource sustainability to achieve
operational flexibility and cost
savings.
97
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Water withdrawal across the Group
increased sharply to 35,247 Mℓ
(2014: 30,207 Mℓ), and water
withdrawal per ounce produced was
up from 13.16 kℓ in 2014 to 15.77 kℓ
in 2015. The main reasons for the
increased water withdrawal were:
❯ Higher usage at South Deep due
to the start-up of the water-
intensive re-mining process and
less water available from the return
dams due to the dry summer
period
❯ Increased water withdrawal at
St Ives due to opening up of the
Invincible, Neptune and A5 ore
bodies
❯ Higher levels of dewatering from
the Waroonga pit at Agnew as
mining at the operation is
progressing deeper and into new
areas. Furthermore, the dry hot
summer of 2015 increased
evaporation rates from the
processing circuit
❯ Water abstraction at Granny Smith
by an outside company
Though more water was drawn into
the system, water recycled and
re-used improved by 1.64%
during 2015.
Water resource management
Each operation implements an
Environmental Management System
(EMS), through which it assesses,
manages, monitors and reports on
water use and quality – including
discharges, where these occur.
All of Gold Fields' operations are
required to have an operational and
predictive water balance in place.
The water balance is a fundamental
tool for understanding current and
future water management
requirements. Water balances enable
decision-making regarding the
current and future security of our
water supply, as well as other
operational and social concerns,
such as modelling storm events to
determine the impact on dam water
levels and the potential risk of
unplanned discharges.
98
Whether mines are water-positive,
water-balanced or water-negative
depends on a number of dynamic
variables. These include climatic
variables such as seasonal rainfall
and evaporation rates, the volume of
water entering underground
workings or open pits (e.g. via
aquifers and surface run-off
respectively) and the type of
processing employed (e.g. heap
leach or Carbon-in-Leach
processing).
Gold Fields applies the following
measures to manage the water
balance at its mines and to promote
water stewardship:
❯ Regional application of the Group
water management guideline (a
summary is available online at
www.goldfields.com/sus_guide.
php) – including the development
and implementation of water
management action plans
❯ Implementation of physical
measures to manage stormwater
Group primary water withdrawal per ounce of gold produced
(kℓ/oz)
2015
2014
2013
15.77
13.16
15.01
10
12
14
16
18
20
Group water withdrawal
(Mℓ)
2015
2014
2013
35,247
30,207
30,302
0
10,000
20,000
30,000
40,000
50,000
Group water recycled/reused
(Mℓ)
2015
2014
2013
43,120.09
42,409.00
33,452.50
0
10,000
20,000
30,000
40,000
50,000
The Gold Fields Integrated Annual Report 2015 run-off – and keep clean water and
mine water separate
❯ Maintenance of water containment
capacity (including the
containment of inflow surges)
❯ Water treatment – including
reverse osmosis plants
❯ Promote water reuse and recycling
and conservation initiatives
Group-wide
Water re-use, recycling and
conservation
Identifying opportunities to enhance
water re-use, recycling and
conservation practices at all of Gold
Fields operations was a Group
balanced scorecard objective for
2015 and beyond. Enhancement of
these practices can deliver multiple
benefits, including cost savings,
reduced impact in water scarce
areas, improved regulatory
compliance, identification and
mitigation of water-related risks,
reduction of mine closure liabilities
and enhancing Gold Fields’ social
licence to operate.
Across the Group, 20 initiatives have
been identified, of which 16 will be
implemented during 2016. The
remaining four initiatives require
further studies. Some of the most
high-profile initiatives include:
❯ Use of in-pit tailings storage at our
Tarkwa mine instead of building
new above-ground tailings storage
facilities (TSFs). In-pit tailings
storage has a higher potential for
recycling and re-use of water than
conventional tailings facilities as
there is less evaporation and the
tailings density is greater. In
addition, the capital costs are likely
to be less in terms of both
construction and associated
community relocation costs. In-pit
tailings disposal has been in use at
our operations in Australia and
recently regulatory approval has
been received for in-pit tailings
disposal at St Ives
❯ Treatment of nitrates in the pit
water at Damang mine, using
floating mats of plants that absorb
the nitrates as nutrients
❯ Development of a post-closure
water management plan at South
Deep, taking into consideration
our surrounding mines, whose
underground water may enter the
mine’s underground workings,
after they have closed
❯ Replacement of the two low-
volume underdrainage capture
ponds with pumping wells at Cerro
Corona, which are more efficient in
capturing potential seepage from
the TSF
❯ Upgrading (where necessary) of all
operational water balances to
ensure they have dynamic and
predictive capabilities by the end
of 2016. This is also a Group
balanced scorecard objective
Acid mine drainage
Gold Fields implements a range of
measures to prevent or contain Acid
Drainage (AD)1 at its operations and
takes effective remedial action where
incidents are identified. There were
no material cases of AD reported
in 2015.
Nonetheless, in the context of
broader historical AD legacy issues in
the Gauteng area, South Deep has
taken a proactive approach to
long-term AD management through
its comprehensive water
management plan. This involves
ongoing water monitoring,
containment of any AD generation
on the old tailings facilities and
water-treatment solutions that purify
surplus fissure and process water
to a potable standard.
In 2015, additional technical studies
were initiated as a solution for
managing potential AD generation in
the underground workings post-
closure. Underground AD generation
is well managed during the
operational phase by ongoing
pumping to the surface of the
underground water.
Other key water management
initiatives implemented in 2015 at
South Deep include:
❯ Plume mitigation measures have
been piloted at the Doornpoort
TSF and groundwater extraction
wells at the old TSFs
❯ Further revegetation of the mine’s
two historic TSFs, which has
further reduced the generation of
wind-blown dust to well below the
legislated airborne dust level limits
❯ The removal of the old South Shaft
waste rock dump, which was a
potential source of AD and other
contamination, is almost complete.
Rehabilitation of the footprint area
commenced in 2015
1 AMD or acid rock drainage (ARD), collectively called acid drainage (AD) is formed when certain sulphide minerals in rocks are exposed to
oxidising conditions, such as the presence of oxygen, combined with water. AD can occur under natural conditions or as a result of the
sulphide minerals that are encountered and exposed to oxidation during mining or during storage in waste rock dumps, ore stockpiles or
tailings dams. The acidic water that forms, usually contains iron and other metals if they are contained in the host rock
99
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Cerro Corona’s tailings and waste
rock facilities were designed to avoid
and mitigate the risks of AD. In
addition, the mines closure plan
contains various strategies, which
are updated at least every two years
as new technical information
becomes available. A more detailed
post-closure water management
plan will be developed during 2016
to add to the existing body of
technical work.
AD issues have also been identified
at the Damang mine, however these
are confined to one pit. Additional
technical studies have been
commissioned in 2016 to better
manage the AD at mine closure.
Although Gold Fields has
commissioned various technical
studies to identify the steps required
to prevent or mitigate the potentially
material AD impacts at its Cerro
Corona and South Deep operations,
none of these studies has allowed
Gold Fields to generate a reliable
estimate of the total potential impact
on the Group.
Immaterial levels of AD have been
identified at the Tarkwa and St Ives
mines
regional water initiatives
Americas region
Water security poses a significant
long-term challenge at Cerro Corona
as the mine operates in a national
context of poorly developed water
infrastructure, water quality
degradation and serious water-
related activism at both a local and
regional level. Although Cerro Corona
has not as yet been materially
affected by such activism – this has
had a serious impact on other
operators in the Cajamarca region.
As such, Cerro Corona has
proactively implemented a range of
responsible water management
initiatives, including:
❯ Rainwater storage and reuse:
Rainwater is stored at Cerro
Corona’s TSF within a closed-
circuit water system, treated and
reused by the operation. This
enhances the mine’s water supply,
while minimising both the amount
of water discharged and the
amount of local groundwater
abstracted
❯ Community water supplies:
Cerro Corona has committed to
providing local communities with
additional, potable water during
the dry season and has completed
a number of projects focused on
water provision to nearby
communities as well as improving
existing municipal water systems
(p119)
❯ Water monitoring: Cerro Corona
works closely with community-
elected representatives to monitor
water quality and quantity at the
Las Tomas spring and authorised
discharge points around the
operation
Such approaches have - in
combination with effective
community engagement practices
and the generation of shared local
value – played a key role in
protecting Cerro Corona from the
kinds of social tensions affecting
other nearby mining operations.
Australia region
Water security poses a potentially
significant challenge for the region’s
mines – all of which are based in arid
areas of Western Australia. During
2015, Gold Fields Australia
proactively ensured that existing
supply agreements have been
extended to all its operations. This
work will continue into 2016.
At St Ives, legal proceedings were
commenced in 2014 against Nickel
West, operated by BHP Billiton,
relating to the continued supply of
potable water to the St Ives
operations. In early 2015, agreement
was reached to settle all outstanding
disputes. St Ives has also entered
into secondary water supply
agreements with other parties
(including the Western Australian
Water Corporation) to meet its
ongoing requirements.
South Africa region
Water management is a sensitive
public issue in South Africa,
particular in the Gauteng area (where
South Deep is situated), which
suffers from the historical
environmental legacy of more than a
century of intensive, deep-level gold
mining. This legacy means that there
are high levels of AD in and around
Johannesburg – most of it caused by
now-defunct companies and
operations.
Whilst not contributing to local AD,
there are concerns that South
Deep’s long life will mean that the
mine is the ‘last man standing’ as
Gauteng’s AD issues become more
acute and social and regulatory
pressure to act on the issue grows.
South Africa currently finds itself in a
drought cycle that is one of the worst
in 40 years and which, some experts
indicate, could continue for between
three to five years. The implementation
of water re-use, recycling and
conservation practices is therefore
particularly critical at the mine.
100
The Gold Fields Integrated Annual Report 2015 South Deep compiled a risk-based
water scarcity management plan in
Q4 2015, which evaluates the key
drought related risks and proposes a
variety of solutions to ensure that the
mine continues to obtain a secure
supply of water for its employees
and production purposes, while
minimising the impact of its water
use on the environment and other
water users in the catchment. In the
short-term these measures include:
❯ Considering options to obtain
water supplies from neighbouring
mines
❯ Further improving storage and
distribution of recycled water
within the South Deep water
system
❯ Investigating the potential of
withdrawing underground water
from old workings behind South
Deep plugs, that minimise the
inflows of water from
interconnected mines
The drought has also had an adverse
impact on the three reverse osmosis
(RO) plants installed at South Deep
over the past two years to treat
process water and reduce the intake
of Rand Water supply. The plants
have not been operational since
October 2015, due to water
shortages.
Before the stoppage, the three plants
had treated about 2 – 4 Mℓ/day,
thereby of processed water thereby
cutting the mine’s water purchase
costs by an estimated R120,000 to
R150,000/month. The RO plants
also have the benefit of increasing
the overall supply of water for other
local users as well as reducing the
overall amount of water in the mine’s
system and the risk of dam overflows
during periods of heavy rains. South
Deep is currently engaging
neighbouring mines to secure more
process water to reactivate the RO
plants and reduce intake from the
regional water utility.
In 2015, South Deep completed
the first phase of its stormwater
management plan. This included the
construction of concrete channels to
separate clean stormwater in the
surrounding catchment from water
running off the backfill plant area and
surrounding areas. This has helped
to minimise the risk of unplanned,
off-footprint water discharges from
the old return water dams during the
rainy season due to the diversion of
clean stormwater away from the
dams. The next phase of the project
– the upgrade and lining of the return
water dam at the old TSFs – is
scheduled to commence in 2017.
South Deep has signed a
memorandum of understanding with
a US-based technology company to
pilot an in-line continuous water
monitoring system in 2016 that can
provide real-time data on heavy
metals and other contaminants. The
technology will allow for significantly
enhanced response times to any
water quality related issues, through
an early warning detection system.
West Africa region
Gold Fields’ Ghanaian operations
– and Tarkwa in particular – face
some challenges on water
management, including intense
periods of precipitation, particularly
during southern Ghana’s two rainy
seasons, and the significant footprint
of the Tarkwa mine, meaning that
there is a large watershed to
manage.
This footprint includes the extensive
surface area of Tarkwa’s North and
South Heap Leach facilities. While
both facilities were closed in 2014,
a significant amount of interaction
continues to take place between
rainwater and the stacked ore.
During 2015, stored contaminated
water was being recycled on the
South Heap Leach pads temporarily
to improve water quality, through the
absorption of ions by the vegetative
cover (plants) on the heaps.
A second response by the mine was
the construction of pipes and the
transportation of contaminated water
from the South ponds to the North
Reverse RO plant, since the South
RO plant had been decommissioned
to save costs. The rinsing of the
North heaps with process water
continued. Excess water from the
North heaps is treated at the North
RO plant and discharged.
The operation of the RO plant, which
was established at the behest of
Ghana’s Environmental Protection
Agency, produces concentrated
brine, which is being temporarily
stored on site in the TSFs. As part of
the investigation into the permanent
elimination of brine through plant
absorption, a 13 hectare test plot of
rubber trees (one of the major tree
species cultivated in the region) was
established at the North Heap Leach
facility in Q4 2015, and is being
irrigated with brine. This will be
monitored in terms of its suitability as
a long-term solution for brine
management.
In late 2014, Tarkwa submitted its
long term decommissioning plan of
the North and South heap leach
facilities to the regulator (EPA).
Subsequent to the submission, the
regulator requested technical studies
on the end use of the heaps. These
studies were completed in 2015 and
submitted to the EPA. We are
awaiting a formal response.
101
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Waste and tailings
The most significant output materials
of Gold Fields’ operations are tailings,
waste rock, chemical waste and
hydrocarbon waste, all of which are
responsibly managed. Gold mining
requires large volumes of blasting
agents, hydrochloric acid, lime,
cyanide, cement and caustic soda
(sodium hydroxide), all of which it
uses on an ongoing basis. Of these,
cyanide represents the most
potentially hazardous substance. All
Gold Fields’ operations, except Cerro
Corona, are fully compliant with the
requirements of the International
Cyanide Management Code (ICMC).
Cerro Corona produces ore
concentrate and does not require
ICMC certification. ICMC certification
also extends to Gold Fields’ transport
providers.
All Gold Fields’ operations have
tailings management plans in place,
including closure and post-closure
management plans. All TSFs and
associated pipeline and pumping
infrastructure are subject to
ISO 14001 certification, external
tailings audits, as well as regular
inspection and formal annual
reporting. TSFs are also subject
to Group-wide inspection by
independent experts at least once
every three years - or more frequently
where required by local
circumstances or regulations.
Gold Fields’ last Group-wide TSF
audit was conducted in 2014, which
included all 15 operational and
10 dormant TSFs, by an
independent, expert consultancy and
found that all facilities were well-
managed and were either already
aligned with global good practice, or
have plans in place for alignment.
The audit found that the Gold Fields
TSFs were within the top quartile of
industry leading practice in terms of
design, operation, and management.
In response to the recent high profile
tailings dam failures at Mount Polley
(4 August 2014) and Samarco
(5 November 2015), which have
102
resulted in increased scrutiny of the
industry’s tailings management
practices, the ICMM initiated a global
review of TSF standards and critical
control processes across its member
companies. Gold Fields CEO Nick
Holland is acting as the CEO sponsor
for the review and Gold Fields also
chairs the member company
working-group. Gold Fields is
committed to implementing any
additional measures to improve TSF
management that may emanate from
the review.
To date Gold Fields has applied the
following measures at its operations
to minimise the risks posed by TSFs
to the environment, which include:
❯ Pollution containment facilities to
capture run-off water from the TSF
surfaces, together with solution
trenches to capture shallow
groundwater seepage
❯ Recycling systems to allow the
reuse of tailings water in
metallurgical processes
❯ Monitoring of groundwater plume
quality and migration (where
applicable) and, where pollution is
detected, installing measures to
contain plumes
❯ Planting vegetation, installing
netting and applying chemical
suppressants on slope faces to
control dust and erosion
More broadly, Gold Fields is taking
proactive steps to anticipate
constraints relating to the
development of future TSFs and the
replacement of existing ones.
Production activities are dependent
on a mine having sufficient TSF
capacity. Securing new TSF capacity
can involve lengthy permitting
processes with local environmental
agencies – and can also require
negotiations with local communities.
In 2015, the Group took the following
steps to ensure that its operations
continued to enjoy a sustainable TSF
pipeline to support future production:
❯ In Australia, our St Ives mine
received final environmental
approval from the regulator for the
proposed Leviathan in-pit tailings
facility, which is expected to realise
around A$50 million (US$37 million)
in savings for tailings facility
construction and closure liabilities
over the life-of-mine. In addition,
operational cost reductions are
estimated to total up to A$5 million
(US$3.7 million) a year.
Construction started in Q1 2016
❯ In 2014, Gold Fields concluded
lengthy negotiations with the EPA
over the development of future
TSFs at Tarkwa. This resulted in
Gold Fields securing formal, written
permission to raise two of the
existing TSFs at Tarkwa (TSF1 and
TSF2). During 2015, the wall raise
at TSF1 was completed, while
construction at TSF2 is nearing
completion. These extensions will
provide the mine with adequate
tailings capacity for the next two
years. TSF3 has been earmarked
for closure in 2017. These three
Group mining waste
(million tonnes)
2015
2014
2013
37.4
38.4
36.7
129.9
30,207
100.2
153.3
0
20
40
60
80
100
120
140
160
180
Waste rock
Tailings
The Gold Fields Integrated Annual Report 2015 TSFs currently provide the mine
with capacity for tailings storage of
13.5 million tonnes per annum
❯ To cater for its longer-term
production profile Tarkwa has been
in talks with the EPA about two
new TSFs – TSF5 and TSF6. In
late 2015 the mine received verbal
go-ahead for site clearing and
preparation of TSF5. This work
commenced in January 2016,
while the environmental review and
approval processes are ongoing.
TSF 6 is in pre-feasibility stage
❯ During 2015, Damang completed
the wall raising at the East TSF,
which will provide adequate
capacity until 2017. A decision to
commission the new Far East TSF
will depend on the current
investigation into the mine’s
longer-term operational future.
❯ At Cerro Corona the Las Tomas
spring was relocated to allow for
the expansion of the TSF after the
relevant approvals were received.
An audit by the regulator in August
2015 found that the relocation had
been carried out in line with the
approvals requirements
Meanwhile, both underground and
open-pit operations produce
substantial volumes of waste rock.
This is kept in managed waste rock
dumps, which are subject to
comprehensive rehabilitation through
the application of cover material,
usually topsoil and vegetation, once
they are no longer in use.
South Deep commenced the
removal of the old South Shaft waste
rock dump in early 2015. While
tailings output was stable, there was
an increase in waste rock across the
Group largely due to increased
stripping at the Invincible, Neptune
and A5 open pits at St Ives.
Mine closure
The total gross mine closure liability
for Gold Fields has decreased by
10% from US$391 million in 2014 to
$353 million in 2015. This decrease
can be attributed to a range of
factors including:
❯ Significantly weaker Australian
Dollar and South African Rand
exchange rates against the
US Dollar. In Rand terms, the
South Deep estimate increased by
17%, however, with the
conversion to US Dollars, the
amount shows a 10% reduction
against the prior year
❯ For Gold Fields Australia, in
addition to the decrease resulting
from the conversion of Australian
Dollars to US Dollars, the final
closure cost shows a drop of
A$5.6 million as a result of
obtaining approval from the
regulator to combine the Agnew
and Lawlers closure plans
❯ A significant decrease at Cerro
Corona Mine (US$6 million), which
resulted from a change in
methodology for closing the
tailings facility
The funding methods used in each
region to make provision for the
mine closure cost estimates are:
❯ Ghana – reclamation bonds
underwritten by banks and
restricted cash
❯ South Africa – contributions into
environmental trust funds and
guarantees
❯ Australia – existing cash resources
❯ Peru – bank guarantees
Going forward, Gold Fields is
planning to further enhance its
integrated approach to mine closure
management with a focus on social
closure and post-closure water
management. The programme is
currently being developed and
implementation is scheduled for
2016 and 2017.
The percentage contribution to the total gross closure liability per region as well as
the percentage secured through the above-listed mechanisms for 2015 are:
Amount
Region
% of Group
Total (US$)
secured (US$) % secured
Australia1
South Africa
West Africa
Americas
Totals
53% 186,007,171
28,959,039
91,519,303
46,663,873
8%
26%
13%
0
28,959,039
64,117,934
20,998,743
100% 353,149,387
114,075,716
0%1
100%
70%
38%
29%
1 Due to legislative changes in Western Australia that came into effect in July 2014, there is
no longer a legal obligation to have unconditional performance bonds in place for mine
closure liabilities. Companies are now required to pay a levy to the state based on the total
mine closure liability. This levy is 1% of the total liability per mine, paid annually. This levy
goes into a state administered fund known as the Mine Rehabilitation Fund and is similar
to the US Superfund where monies and interest from the fund will be used to rehabilitate
legacy sites or sites that have prematurely closed or been abandoned. Company specific
liabilities for active mines are therefore unfunded
103
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Government relations
As the issuer of mining licences,
developers of policy and overseers of
regulation, host governments are
among Gold Fields’ most important
stakeholders. Engagement with
national governments typically takes
place on a collective basis through
local chambers of mines. Gold Fields
also regularly engages with regional
regulatory authorities and local
government in its host communities.
Gold Fields does not provide
financial contributions to political
parties and lobby groups unless
explicitly approved by the Gold Fields
Board of Directors.
Taxation and the maximisation
of national mineral benefits
It is natural and right that
governments seek to maximise the
social benefits that accrue from the
extraction of finite natural resources.
As a matter of policy Gold Fields fully
complies with the fiscal and taxation
regulations and laws of the countries
it operates in, understanding that
these fiscal contributions are critical
to fund governments, its employees
and public sector infrastructure and
projects.
Nonetheless, attempts to secure
these benefits through higher levels
of targeted taxation can in the long
term have the opposite effect.
Indeed, the weak commodities
market – including the low price of
gold – is throwing into sharp focus
just how damaging short-term
attempts to secure a greater
proportion of companies’ earnings
can be. Mining investment is falling,
new growth projects are being left
undeveloped and existing projects
are facing closure – even without
additional fiscal uncertainty. The
implications for longer-term national
and host community development
are obvious.
Fiscal challenges in Ghana
In Ghana, Gold Fields continues to
remain disproportionately exposed to
the consequences of a heavier fiscal
regime for the mining sector. This
follows a range of fiscal measures
taken in recent years to address
public budgetary challenges. These
include:
❯ Increased corporate income tax
rates and royalties
❯ A much reduced capital allowance
❯ Increased customs duties on
mining items
❯ Increased ‘stool tax’ – a local tax
calculated on the size of all
exploration and mining lease areas
In 2015 Gold Fields was the second
largest corporate contributor to
public revenues in Ghana – paying
US$86 million in direct taxes,
royalties and dividends. Whilst proud
of making such a substantive
contribution to national development,
this contribution continues to be
disproportionate to that of its
in-country peers.
These commercial pressures – in
combination with the low gold price
– are having a direct impact on Gold
Fields’ expansion plans. In 2014, we
reduced our exploration activities in
Ghana to near-mine activities only,
and the fiscal framework will be a key
consideration as we ponder the
future of our Damang mine.
Gold Fields continues to
constructively engage with the
Government of Ghana regarding the
potential introduction of an
investment framework that would be
equally applicable to all gold mining
companies. The latest formal
engagements with the government
in terms of a new investment
agreement have been ongoing since
late 2014 but have yet to give us a
satisfactory level of assurance. A
level playing field with a supportive
and globally competitive tax regime
would significantly improve fiscal
predictability for the Ghanaian mining
sector, which is critical for long-term
investment planning.
royalties in Australia
During 2015, Gold Fields joined with
its peers in Western Australia to
campaign against a review of the
royalties charged on mining, which
had been proposed by the
government of the state. The
campaign, entitled ‘Heart of Gold’,
highlighted the industry’s contribution
to the economy and job creation. In
March 2015, the government
announced that there would be no
increases to the royalties on
gold mining.
Fiscal uncertainty in South
Africa
Gold Fields’ operation in South Africa
is guided primarily by the Mineral and
Petroleum Resources Development
Act (MPRDA) of 2002. In 2013
critical amendments to the MPRDA
were tabled by the government in the
MPRDA Amendment Bill, but the bill
was sent back to Parliament for
consideration. A change of minister
and director general in the
Department of Mineral Resources
(DMR) in 2015 and differing policy
priorities by various government
departments, have also created
significant uncertainty for current
and potential investors.
One of the key requirements of the
MPRDA is to facilitate meaningful
and substantial participation of
Historically Disadvantaged South
Africans (HDSAs) in the mining
industry. To provide guidance on this
open-ended requirement, the Mining
Charter, as revised in 2010, was
published providing for a range of
empowerment actions and a
corollary time frame. All mining rights
holders (including South Deep as the
mining rights holder) are required to
submit an annual compliance
104
The Gold Fields Integrated Annual Report 2015 assessment to the DMR on progress
made against meeting the annual
targets in the Charter. Gold Fields
continues to comply with this
process.
Government had indicated that the
Mining Charter would be reviewed
during 2015 but a number of
important aspects of the Charter
remain to be finalised, key of which is
the Black Economic Empowerment
(BEE) ownership of mining
companies and the evaluation of
previous BEE transactions carried
out by the industry. The Chamber of
Mines, representing the vast majority
of mining companies in South Africa,
has applied to the High Court of
South Africa for a declaratory order.
The matter was set down for March
15 and 16. For an update see the
AFR on page 41.
Consideration of the implementation
of the Department of Trade and
Industry’s amended Codes of Good
Practice (CoGP) on the mining
industry is also important, specifically
alignment between the Mining
Charter and the CoGP. In October
2014, the Broad-Based Black
Economic Empowerment Act of
2003, as amended (B-BBEE Act),
which gives effect to the CoGP, was
amended introducing a ‘trumping’
clause to bring about alignment to
the B-BBEE Act for all disparate
legislation regulating the
measurement of BEE. On
30 October 2015, the DMR
announced that the mining industry
will be exempt for 12 months from
the provisions in the B-BBEE Act,
while alignment between the Mining
Charter and CoGP is being sought.
The Chamber is also engaging with
government directly on the long term
sustainability of the industry and a
number of other issues confronting
the sector. A tripartite forum, called
Project Phakisa – comprising
industry, government and organised
labour – was established during
2015 followed by extensive
engagement programmes to map
out future growth and empowerment
of the South African mining industry.
Gold Fields is fully in support of these
efforts and has actively participated
in Project Phakisa. However, amid
the continued regulatory uncertainty
it is difficult to envisage strong
investor support for the industry,
which is essential if the investment
is to be forthcoming to fund an
expansion of the sector.
❯ Citrus farming on rehabilitated mine land at Damang
105
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
❯
Element
❯
Description
❯ Reporting
❯ Ownership
❯ Housing and
living costs
Report on the level of compliance with the Revised
Charter for the calendar year
Minimum target for effective HDSA ownership
Conversion and upgrading hostels to attain the
occupancy rate of one person per room
Conversion and upgrading hostels into family units
Procurement spent on BEE entity
❯ Procurement and
enterprise
development
Multi-national suppliers’ contribution to the social
fund
Annual spend on procurement from
multi-national suppliers
0.5% of procurement value
There remains an industry-wide lack of clarity on this requirement
in the absence of guidance from the DMR. However, over and
above its SLP commitments, South Deep commenced several
projects in 2015 focused on enhancing host community
procurement, employment and skills development.
❯ Employment equity
Diversification of the workplace to reflect the country’s
demographics to attain competitiveness
❯ Human resources
development
Developing requisite skills, including support for
South Africa-based research and development
initiatives intended to develop solutions in exploration,
mining, processing, technology, mining, beneficiation
as well as environmental conservation.
❯ Mine community
development
Conduct ethnographic community consultative and
collaborative processes to delineate community
needs
❯ Improvement of the industry’s environmental
management
❯ Improvement of the industry’s mine health and
safety performance
❯ Implementation of approved
environmental management
programmes (EMPs)
100%
❯ Implementation of tripartite action plan
100%
(TAP) on health and safety
❯ Sustainable
development
and growth
❯ Utilisation of South African-based research facilities
for analysis of samples across the mining value chain
❯ Percentage of samples in South African
facilities
100%
❯ Beneficiation
Contribution towards beneficiation
Added production volume contribution to
local value addition beyond the baseline
Section 26 of MPRDA
(% of above baseline)
Documentary proof of receipt from the
Annually
Target met (Annual Submission)
Hostels: South Deep has completed 100% of the planned hostel
upgrades. At the end of December 2015, the occupancy rate
averaged one person per room, thus meeting the Mining Charter
compliance scorecard target
Family units: At the end of 2014 South Deep had completed the
establishment of family accommodation at its hostels (100%
complete). South Deep remained compliant with this target in
DMR
Meaningful economic participation
26%
Percentage reduction of occupancy rate
towards 2015 target
Occupancy rate of one
person per room
Percentage conversion of hostels
Family units established
into family units
Capital goods
Services
Consumable goods
40%
70%
50%
40%
40%
40%
40%
40%
5%
Up-to-date project
implementation
Top management (Board)
Senior management1
Middle management
Junior management
Core and critical skills2
Human resources development
expenditure as a percentage of total
annual payroll (excluding mandatory skills
development levy)
Implement approved community projects
35%
2015.
88%
79%
84%
0%
50%
50%
57%
54%
70%
10.5%
100%
69%
100%
As part of South Deep’s Social and Labour Plans (SLP), the mine is
involved in a number of community development projects focused
on infrastructure development, job creation and poverty alleviation,
with particular emphasis on enterprise development. Despite being
in a loss-making position due to South Deep being in a ramp-up
phase, the mine and the South Deep Community and Education
Trusts spent a combined R46.4 million on approved socio-
economic development projects in 2015. 8% of SED spend (or
R3.16 million) was spent on implementation of community projects
(LED projects), approved in the SLP. In 2015, 76% of these LED
projects were implemented.
100% implementation was achieved on three of the five pillars for the
TAP. Further work is being undertaken on the remaining two pillars:
training of Occupational Health and Safety (OHS) representatives as
well as implementing the cultural transformation framework standards
in 2016 towards fully achieving this target.
Current regulations and guidelines are not clear in relation to the
baseline levels and targets. However, Gold Fields has made a
capital- intensive investment in our smelting facility at South Deep,
which adds significant value to the gold being mined as well as
creating jobs. Gold Fields also owns 2,76% of Rand Refinery, which
has established the ‘Gold Zone’. The aim is for the Gold Zone to
become a major hub for precious metals fabrication in South Africa
for global export, while at the same time assisting local communities
with skills development (including beneficiation). Two socio-economic
development projects currently located at the Gold Zone are: (1)The
Intsika Project, which provides jewellery design and manufacturing
training to formerly unemployed young black women over an
18-month period; and (2) The Ekhurhuleni Jewellery Project, which is
a Small to Medium Manufacturing Enterprise/Black Economic
Empowerment incubator for qualified emerging young black jewellery
manufacturers.
Mining Charter Scorecard
All mining rights holders (including
South Deep as the mining rights
holder) are required to submit an
annual compliance assessment to
the South African Department of
Mineral Resources (DMR) on
progress made against meeting the
annual targets in the Charter.
Gold Fields had submitted its 2012
and 2013 annual assessment report
in accordance with these
requirements. In early 2015, the
DMR requested all mining rights
holders (including Gold Fields’ South
Deep Mine) to re-submit the 2012
and 2013 compliance assessments
and submit its 2014 compliance
assessment onto an on-line template
(designed by the DMR). On
15 March 2016 the DMR extended
the statutory deadline for the 2015
submission from 31 March 2016 to
30 April 2016.
Gold Fields submitted the
information online as requested.
Amid the absence of new criteria,
Gold Fields has updated its Mining
Charter performance and
compliance in line with this
scorecard. The 2015 scorecard
follows on this page.
Gold Fields’ BEE ownership
transactions are detailed on our
website at www.goldfields.co.za/
reports/annual_report_2013/
integrated/sec-ethics.php.
106
The Gold Fields Integrated Annual Report 2015
❯
How we measured up
❯
Mining charter compliance
target by 2015
❯
Progress against 2015 mining charter target
❯ Reporting
❯ Ownership
❯ Housing and
living costs
Report on the level of compliance with the Revised
Charter for the calendar year
Minimum target for effective HDSA ownership
Conversion and upgrading hostels to attain the
occupancy rate of one person per room
Conversion and upgrading hostels into family units
❯ Procurement and
enterprise
development
Procurement spent on BEE entity
Multi-national suppliers’ contribution to the social
fund
❯ Employment equity
Diversification of the workplace to reflect the country’s
demographics to attain competitiveness
❯ Human resources
development
Developing requisite skills, including support for
South Africa-based research and development
initiatives intended to develop solutions in exploration,
mining, processing, technology, mining, beneficiation
as well as environmental conservation.
❯ Mine community
development
Conduct ethnographic community consultative and
collaborative processes to delineate community
needs
Documentary proof of receipt from the
DMR
Meaningful economic participation
Annually
26%
Percentage reduction of occupancy rate
towards 2015 target
Occupancy rate of one
person per room
Percentage conversion of hostels
into family units
Family units established
Capital goods
Services
Consumable goods
40%
70%
50%
Annual spend on procurement from
multi-national suppliers
0.5% of procurement value
Top management (Board)
Senior management1
Middle management
Junior management
Core and critical skills2
Human resources development
expenditure as a percentage of total
annual payroll (excluding mandatory skills
development levy)
Implement approved community projects
40%
40%
40%
40%
40%
5%
Up-to-date project
implementation
❯ Improvement of the industry’s environmental
management
❯ Improvement of the industry’s mine health and
safety performance
❯ Implementation of approved
environmental management
programmes (EMPs)
❯ Implementation of tripartite action plan
(TAP) on health and safety
100%
100%
❯ Sustainable
development
and growth
Target met (Annual Submission)
35%
Hostels: South Deep has completed 100% of the planned hostel
upgrades. At the end of December 2015, the occupancy rate
averaged one person per room, thus meeting the Mining Charter
compliance scorecard target
Family units: At the end of 2014 South Deep had completed the
establishment of family accommodation at its hostels (100%
complete). South Deep remained compliant with this target in
2015.
88%
79%
84%
0%
There remains an industry-wide lack of clarity on this requirement
in the absence of guidance from the DMR. However, over and
above its SLP commitments, South Deep commenced several
projects in 2015 focused on enhancing host community
procurement, employment and skills development.
50%
50%
57%
54%
70%
10.5%
As part of South Deep’s Social and Labour Plans (SLP), the mine is
involved in a number of community development projects focused
on infrastructure development, job creation and poverty alleviation,
with particular emphasis on enterprise development. Despite being
in a loss-making position due to South Deep being in a ramp-up
phase, the mine and the South Deep Community and Education
Trusts spent a combined R46.4 million on approved socio-
economic development projects in 2015. 8% of SED spend (or
R3.16 million) was spent on implementation of community projects
(LED projects), approved in the SLP. In 2015, 76% of these LED
projects were implemented.
100%
69%
100% implementation was achieved on three of the five pillars for the
TAP. Further work is being undertaken on the remaining two pillars:
training of Occupational Health and Safety (OHS) representatives as
well as implementing the cultural transformation framework standards
in 2016 towards fully achieving this target.
❯ Utilisation of South African-based research facilities
for analysis of samples across the mining value chain
❯ Percentage of samples in South African
facilities
100%
100%
❯ Beneficiation
Contribution towards beneficiation
Added production volume contribution to
local value addition beyond the baseline
Section 26 of MPRDA
(% of above baseline)
1 Includes members of the SA Regional Executive Committee and the South Deep
mine Executive Committee
2 Core skills include A, B and C graded employees in the miner and artisan
categories as well as officials with core skills for mining and/or working in a core
mining area(s)
Current regulations and guidelines are not clear in relation to the
baseline levels and targets. However, Gold Fields has made a
capital- intensive investment in our smelting facility at South Deep,
which adds significant value to the gold being mined as well as
creating jobs. Gold Fields also owns 2,76% of Rand Refinery, which
has established the ‘Gold Zone’. The aim is for the Gold Zone to
become a major hub for precious metals fabrication in South Africa
for global export, while at the same time assisting local communities
with skills development (including beneficiation). Two socio-economic
development projects currently located at the Gold Zone are: (1)The
Intsika Project, which provides jewellery design and manufacturing
training to formerly unemployed young black women over an
18-month period; and (2) The Ekhurhuleni Jewellery Project, which is
a Small to Medium Manufacturing Enterprise/Black Economic
Empowerment incubator for qualified emerging young black jewellery
manufacturers.
107
The Gold Fields Integrated Annual Report 2015
5.2 Social licence to operate – Strategic focus areas (continued)
Community relations and
Shared value
Social licence to operate
Many mining companies face
increasing pressures over their social
licence to operate – i.e. the acceptance
or approval of their activities by local
stakeholders. Whilst formal permission
to operate is ultimately granted by host
governments; the practical reality is
that many operations also need the
permission of host communities and
other influential stakeholders to carry
out their operations effectively and
profitably.
As such, Gold Fields believes it is
important to avoid, minimise and
manage the negative impacts of its
operations on stakeholders while also
maximising the positive benefits. In
current market conditions – which
have the potential to curtail the ability
of Gold Fields to deliver local benefits
– active stakeholder engagements, in
combination with the Company’s
Shared Value development approach
(see p117 – 119) is particularly
important as it shifts the focus from
spending to the delivery of positive
social and business impacts.
❯ The UN Global Compact’s
10 Principles
❯ The AA1000 Stakeholder
Engagement Standard
In this context, Gold Fields actively
identifies and engages with the
representatives of the following groups
on a regular basis - both formally and
informally:
❯ Central, regional and local
government and their agencies
❯ Community-based organisations
❯ Traditional authorities
❯ NGOs
❯ Civil society
❯ Organised labour
❯ Local businesses
Such engagement is guided by:
❯ Applicable legislation and regulation
❯ The Mining Charter and South
Deep’s mandated Social and Labour
Plan (SLP)
❯ The ICMMs 10 Principles and
Community Development Toolkit
– and Position Statement on
Indigenous Peoples
All of our operations are required to
implement culturally appropriate
stakeholder engagement plans for
all stages of the life-of-mine.
It is a Gold Fields requirement that all
mines establish mechanisms through
which communities can voice their
grievances and complaints about the
Group, its behaviour or that of its
employees on social and
environmental issues, and have these
issues assessed and resolved.
Our community policy, charter and our
community relations and stakeholder
engagement guidelines can be found
at https://www.goldfields.com/sus_
society.php
Gold Fields Social Performance Framework
Build
relationships
Standards 1, 2 & 3
Share
Value
Standard 4
Manage
impacts
Standards 5,6,7,8 & 9
s
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I
108
❯ Community profile
❯ Stakeholder identification, mapping and analysis
❯ Stakeholder engagement strategy and plan
❯ Grievance mechanism
❯ Local society pact
❯ Free, prior and informed consent
❯ Community investment strategy and plan
❯ Shared Value projects
❯ Community development projects
❯ Social and labour plan projects
❯ Partnerships/Alliance/Foundation/Trusts
❯ Social impact assessment
❯ Social management plan
❯ Resettlement action plan
❯ ASM strategy
❯ Closure plan
❯ Social management system
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t
The Gold Fields Integrated Annual Report 2015
Socio-economic development
(SED) spend
Gold Fields recognises that not all of
the value it creates at a national level
through royalties and taxes benefits
its host communities. To address this
deficit – and to maintain its social
licence to operate – the Group
focuses on SED initiatives and
Shared Value projects in its host
communities. Shared Value projects
(p118 – 119) are sustainable projects
that support Gold Fields’ own
business objectives, whilst also
generating positive socio-economic
impacts for host communities by
addressing their priority needs of
employment, skills and enterprise
development as well as
environmental rehabilitation and
water supplies.
At first glance, the spending on SED
programmes – US$14 million in 2015
– appears small given that this
reflects our traditional community
social investments (CSI) spend in
host communities. However, there
is no doubt that a significant amount
of our salaries and wages paid to
employees finds their way back into
these communities. A significant part
of our spending is also with local
SED contributions by type 2015 (US$m)
business suppliers and contractors.
Gold Fields is increasingly seeking
to ensure employment and
procurement is channelled to local
communities and as a result
stimulate local employment with
specific targets being developed by
all of our operations over the
next year.
SED and wider community spend is
focused on the delivery of benefits to
host and labour sending
communities. These include:
❯ Host community employment
❯ Host community procurement
❯ Skills development
❯ Educational investment
❯ Health investment
❯ Infrastructure support
Details of these initiatives in each
region follow on pages 110 – 119.
Host community employment
Gold Fields is committed to
employing host community members
at all its operations – where this is
feasible. By doing so, we are able to
align the interests of host
communities to those of our mines,
maximise local value generation and
build up its local skills pools.
Nevertheless, Gold Fields’ ability to
recruit such workers can be
constrained by the limited availability
of skills at the host community-level
in the first place – underlining the
need for Gold Fields to also support
local education and skills
development.
In South Deep, for example, many of
our workers recruited for lower
skilled jobs have been recruited from
the mine’s community-focused Adult
Basic Education and Training
courses. Similarly, at Cerro Corona in
Peru, local employees were
employed as part of our early and
successful efforts to integrate
members of the host communities
into our workforce.
The number of host community
members – including both
employees and contractors –
working at each of Gold Fields’
regions is set out on the next page.
All our operations have been tasked
with developing plans that
encourage host community
procurement and employment as
well as setting three-year targets
in 2016.
SED contributions by type 2015
(US$m)
SED contributions by region 2013 – 2015
(US$m)
2015
2014
2013
1.70
1.49
0.30
0.70
3.70
3.39
4.20
3.50
3.60
8.00
8.29
9.35
0
2
4
6
8
10
West Africa
South America
South Africa
Australia
n Local environment
n Infrastructure
n Education and training
n Health and wellbeing
n Economic diversification
n SLPs (South Africa)
n Community Trusts (South Africa)
1.11
4.56
2.57
1.00
1.62
0.88
1.92
109
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Host community procurement
Where possible, Gold Fields seeks to
procure goods and services from its
countries of operation, and, where
feasible, its host communities. This
serves to:
❯ Enhance the national and local
supply base, which is vitally
important given the remote nature
of some mines
❯ Generate employment
opportunities for local people
Of the total 2015 procurement
expenditure, US$1.27 billion, or
76%, was spent on businesses
based in countries where Gold Fields
has operations (2014:
US$1.41 billion / 76%).
Within this figure, US$514 million, or
35% of total expenditure, was spent
on suppliers and contractors from
mine host communities (2014:
US$600 million / 39%). Host
procurement numbers are dominated
by our Australian operations –
US$439 million in 2015 – as the
entire region of Western Australia is
classified as a host community due
to the extremely remote nature of this
region and the fact that many
employees fly into the operations
from Perth.
In addition, Gold Fields works with
communities and governments to
develop broader, more diversified
local economies – primarily by
helping local people start and
consolidate their own businesses.
Three-year local procurement and
employment strategies and plans for
South Africa, Ghana and Peru will be
developed in 2016 to support the
delivery of targets to be set at the
same time. The targets will also be
included in the balanced scorecards
of managers responsible for their
implementation.
Skills development
Gold Fields recognises that skills
development is critical for integrating
members of its host communities into
its workforce or that of its suppliers.
Similarly, Gold Fields supports the
development of small- and medium-
sized local businesses by helping
community members attend courses
in practical business skills to achieve
portable skills as well as business law,
financial management, marketing,
ethics and entrepreneurship.
Host community employment and procurement
Region
Peru
Ghana
Australia1
South Deep
Group
Region
Peru
Ghana
Australia1
South Deep
Group
Number of employees
from host community
(as a % of total employees)
Number of workforce2
from host community
(as a % of total workforce)
2015
19%
46%
89%
48%
51%
2014
22%
48%
91%
46%
52%
2015
29%
67%
90%
50%
59%
2014
24%
66%
94%
47%
57%
Local (in country) procurement
Host community procurement
2015
87%
64%
97%
100%
85%
2014
88%
72%
99%
100%
91%
20133
91%
68%
99%
100%
86%
2015
7%
9%
66%
10%
35%
2014
5%
6%
69%
9%
39%
20133
6%
6%
72%
4%
31%
1 Host communities are those communities living in settlements within an operation’s direct area of influence. For Gold Fields Australian
operations, Western Australia is classified as a host community due to the extremely remote nature of this region and the fact that many
employees fly into the operations from Perth. Hence the high host community employment percentages relative to the other regions.
2 Workforce is the total of employees and contractors
3 Excludes Yilgarn South assets
110
The Gold Fields Integrated Annual Report 2015 Education investment
Gold Fields recognises that
education is critical for the social and
economic development of its host
communities, the improvement of its
operating environments and the
long-term integration of host
community members into its
workforce. Relevant educational
initiatives range from equipping early
learning centres and schools, extra
lessons and bridging programmes
for students, teacher training and
bursaries for students to the
sponsorship of mining universities.
Health investment
Many of Gold Fields workers are
drawn from host communities,
resulting in a high degree of
interaction between the workforce
and the local community. The
promotion of community health is
therefore not only important from the
perspective of local socio-economic
development - but also employee
wellbeing and operational continuity.
For example, at Tarkwa Gold Fields
manages a local hospital that assists
community members in addition to
employees, while the mine also
sponsors public health programmes
in adjacent communities.
infrastructure support
Some of Gold Fields’ areas of
operation suffer from a severe lack
of infrastructure, such as roads,
electricity supply and social services,
including schools and medical
facilities. This not only impacts the
development of host communities
but can also, in certain cases, impact
Gold Fields’ own operations. As
such, infrastructure development
represents a key area of focus. In
2015, Gold Fields spent a total of
US$4.5 million on host community
infrastructure initiatives, the largest
slice of its SED spend.
regional programmes
Americas region
Despite ongoing friction between
local communities and other mining
operators in the Cajamarca region,
Gold Fields’ Cerro Corona mine so
far remains largely unaffected. This
is mainly due to the strength of the
mine’s relations with the local
community, which is supported by:
❯ Ongoing implementation of a
well-established engagement
framework with the communities in
Hualgayoc that helps identify and
address host community
development priorities, including
the availability of potable water,
management of our environmental
and social impacts and
employment generation
❯ Gold Fields’ participation in the
‘Mesa de Dialogo y Concertacion
de Hualgayoc’ (a community-
based, multi-stakeholder
roundtable focused on regional
development projects)
❯ Joint water monitoring with the
host community, to provide
assurance around the mine’s water
impacts – a key focus point for
communities in conflict with other
mining operators in the area
❯ Support for the organisations
responsible for the management of
the Tingo and Maygasbamba
rivers to improve irrigation
infrastructure
❯ Visible benefits to the host
community through the
employment of community
residents and targeted SED
projects
The most critical community projects
in Cerro Corona are linked to the
communities' top priorities and
include water provision for
surrounding communities, job
creation and local supplier
development and houses at risk of
collapse. Cerro Corona’s water
management programme – which is
also a Shared Value project (p119) –
aims to bring drinking water to more
than 90% of the families of
Hualgayoc by 2017.
The following projects in 2015
supported this ambition:
❯ Towards the end of 2015, Cerro
Corona started the construction of
the Coymolache drinking water
system to provide water
connections to 35 families. The
project is scheduled for completion
in April 2016
❯ The completion of the rehabilitation
of the main infrastructure that
provides potable water to
Hualgayoc City
❯ The completion of the first phase
of the Cuadratura drinking water
system, benefiting 85 families
❯ The replacement of 18 km of local
water pipeline systems, including
enhancement of water collection
points. This water pipeline system
will benefit 18 hamlets in the area
and will cost an estimated
US$4.5 million. Work started in
September 2015 and is scheduled
for completion in October 2016
Other key SED projects undertaken
by Cerro Corona during 2015
included:
❯ Gold Fields provided financial and
practical support to 813 small
farmers in the district of Hualgayoc
to plant 614 pastures. These
pastures will assist with increasing
milk sales in 2016 as the dairy
industry is the second biggest
economic activity in the Hualgayoc
district after mining
❯ Gold Fields embarked on a
voluntary programme to
reconstruct five houses at risk of
collapse in Hualgayoc City. Work
on another four houses is
scheduled for 2016 to prevent
them from collapsing
❯ Construction and equipping of the
Hualgayoc Health Centre was
completed by Gold Fields in 2015
at a total cost of US$2.4 million. It
is managed by the regional
government and considered one
of the most modern health facilities
in the region
111
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Australia region
The remote location of Gold Fields’
mines in Australia – as well as strong
local socio-economic conditions –
mean that stakeholder engagement,
which is driven by a current
stakeholder engagement plan, is
largely focused on local indigenous
groups. This includes engagement
around native titles on Gold Fields’
licence areas, land access for
near-mine drilling and the
preservation of indigenous heritage.
The Gold Fields Australia Foundation
is responsible for investments in
community projects and during 2015
spent A$300,000 (US$216,000) in
supporting a number of initiatives in
support of indigenous groups,
including bursaries to children from
these communities
Under Gold Fields’ Community
Policy, the Company is committed
to working to obtain the consent of
indigenous peoples for new projects
(and changes to existing projects)
– where they are located on lands
traditionally owned by or under
customary use of indigenous
peoples – and that are likely to have
significant adverse impacts on
indigenous peoples.
Gold Fields’ St Ives mine is currently
involved in a native title claim made
by the Ngadju People for the
recognition of their Native Title rights
over a large parcel of land, including
tenements held by St Ives. Details
of the legal case are on page 40 of
the AFR.
West Africa region
In light of local socio-economic
realities at our Ghanaian operations,
community relations are a major
focus for the Damang and Tarkwa
mines. However, the mines’ lower
production over the past two years
has resulted in lower levels of funding
for the Gold Fields Ghana
Foundation (Gold Fields’ main SED
vehicle in the country, which receives
US$1 per ounce of gold sold and 1%
of pre-tax profits).
As a result, Gold Fields has been
carrying out targeted engagement
with key host community
stakeholders to minimise the impacts
on both the affected individuals
themselves and host communities
more broadly. Furthermore,
relationship assessment work –
similar to that used at our South
Deep mine (p114) – was completed
in 2015 and its findings and
mitigating actions implemented in
2016.
This is in addition to ongoing
engagement that took place through
the mines’ well-established
consultation channels, including
their:
❯ Broad-based mine consultative
committees
❯ Formalised, regular engagement
with local chiefs
❯ Regular community committee
meetings
❯ Direct community forums
❯ Continual informal engagement
Key community issues in 2015
included:
❯ Compensation of farmers at
Kottraverchy, Tarkwa: Despite
400 farmers previously accepting
crop compensation, in 2014 a
small group of farmers challenged
the value of the compensation.
Gold Fields is participating in a
mediation process with the
farmers, overseen by the
Environmental Protection Agency
(EPA) and an independent
evaluator has been appointed
❯ Relocation of Ainoo residents,
Damang: After raising concerns
about the health and safety
implications of their proximity to
the Lima South Pit, six residents
were successfully rehoused at a
cost of around US$500,000.
Our actions were guided by the
Gold Fields practice guide on
resettlement as well as guidelines
developed by the World Bank’s
International Finance Corporation
The Gold Fields Ghana Foundation
– which has Company and external
trustees – spent just over
US$1 million on projects during
2015. The most important ones
were:
❯ An information technology and
early childhood development
centre at New Atuabo
❯ Artisan training and the supply
of tools at Tarkwa
❯ Additional classrooms at
Gold Fields supported schools
near Tarkwa
❯ Continuation of our scholar bursary
schemes for 166 pupils at Tarkwa
and 42 pupils at Damang
112
The Gold Fields Integrated Annual Report 2015 South Africa region
Under the 2002 Mineral and
Petroleum Resources Development
Act, mining companies must submit
a SLP as a prerequisite for the
granting of mining or production
rights. Each SLP requires the
Company in question to implement,
amongst others:
❯ Employee development
programmes, with an emphasis on
BEE
❯ Local Economic Development
(LED) programmes – with a focus
on host communities and labour-
sending areas
❯ Employee accommodation and
housing programmes (p131)
As such, the LED element of the SLP
provides the regulatory framework
for Gold Fields’ engagement with
host community stakeholders in
South Africa. Since the 2010 Mining
Charter took effect Gold Fields has
substantially complied with its
requirements including those agreed
to under the 2010 approved SLP
and the 2013 SLP, yet to be
approved.
However, in 2014, amid continued
social unrest and rising poverty and
unemployment levels in the
Westonaria municipality – home to
our South Deep mine – Gold Fields
set out to assess and understand the
community expectations amid the
ever-growing risk that the social
volatility will spread to the mine.
South Deep’s journey from
compliance to its future focus is
outlined in the infographic on the
following two pages.
The use of the Relational Proximity
Indicator tool to measure the strength
of community relationships at South
Deep has been ongoing since
Q2 2014 and all 10 of our host
communities in Westonaria were
assessed by the end of 2015. These
assessments have revealed a
significant gap in South Deep’s
community investment programme
and its ability to positively impact
community perceptions. The
community raised unemployment,
education, skills development and
the mining companies’ social and
economic obligations as the key
issues that need to be addressed.
With a more comprehensive
understanding of the risk, community
needs and community perceptions,
last year South Deep’s approach
shifted materially from one focused
on compliance to one focused on
good practice. The South Deep
community relations team was
strengthened and a range of new
strategies, programmes and projects
have been developed and
implemented, as outlined in the
infographic. These initiatives were
undertaken in addition to the SLP
and Shared Value projects (p118)
already undertaken by South Deep:
Gold Fields and Sibanye Gold
Alliance
An alliance was formed in 2015
between Gold Fields and Sibanye
Gold, the other mining house hosted
by the Westonaria communities, to
join forces building sustainable host
communities. Service providers were
appointed during Phase 1 of a
programme with the aim of building
an agricultural economy organised
by the community itself. An eight
week workshop was held as a part
of Phase 1 that established a
number of enterprises in agriculture,
sewing, construction, landscaping,
security services and waste
recycling, creating around 200 jobs
in the area. The second phase
commenced early in 2016.
Continued on page 116
❯ Sewing project supported by South Deep
113
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
South Deep’s Social Licence to Operate journey
Focus on compliance
Assessment and understanding
Compliance with regulation rather than
community expectations
Assessment and understanding of community expectations
South Deep focuses on implementing
employee and local economic development
plans in host communities and labour-
sending areas, in line with the requirements
of the SLP
South Deep undertakes a project to measure the strength, quality and challenges
to community expectations with ‘relational proximity’ studies in 10 adjacent
communities. These assessments reveal a significant gap in South Deep’s
community investment programme and its ability to positively impact community
perceptions
Community Investments
South Deep Community Risk Assessment
US$3m (R29m)
construction of 163 new
homes in Westonaria and
Poortjie
US$200,000 (R2,4m)
opening a new bakery run by
community members
US$340,000 (R3,5m) restoration of the
Healdtown College in the Eastern Cape
US$100,000 (R1,1m) invested in Thusanang
Community Clinic
Planning and infrastructure for the Simunye
High School upgrade
Socio-economic realities
Despite the investment by South Deep and other
mining companies, Westonaria continues to be
characterised by:
High youth unemployment
Poverty
Poor delivery of social
services
Social unrest
1
2
3
4
5
Poor relations between mine
and stakeholders
Stakeholder perceptions
Insufficient planning for mine
closure
6
7
8
Local government elections
Socio-economic landscape in
Westonaria
Expansion of Thusanang
community
Community protest
9
Theft of mine property and gold
Stakeholders communicating
on behalf of mine
10
Lack of benefit from South
Deep & Trusts
Host communities and their perceptions
of South Deep
23
37
Bekkersdal
21
Simunye
Zuurbekom -
Water Works
43
Venterspos
65
20
Westonaria
Hillshaven
Thusanang
22
35
Jachtsfontein
43
Poortjie
South Deep Mining
Licence Area
Relational
Assessment Score
(undertaken by KPMG and Relational
Analytics)
0
= Poor perception
of South Deep
100
= Excellent perception
of South Deep
22
Kalbasfontein
2010
2014
2015 ➤
114
The Gold Fields Integrated Annual Report 2015
Moving towards good practice
Future focus
Addressing the Social Licence to Operate risks in an integrated and
sustainable way
Responsible social management
with sustainability integrated into
the business
With a more comprehensive understanding of the risks, community needs and community
perceptions, South Deep’s approach moves from one focused on compliance to one
focused on good practice
The future focus will be on driving societal
acceptance and further integrating sustainability
into the business’ operating practice
The following key initiatives are launched:
South Deep Community Relations
capacity, strategy and planning
The South Deep community relations team has been
strengthened with the appointment of new staff. This
facilitates greater engagement with the community. A
consultancy is assisting in preparing a five-year strategy
and implementation plans.
Community Shared Value
projects
Two new Shared Value projects currently being
implemented focus on additional Maths and Science
education for local learners, and local community
procurement.
Gold Fields and
Sibanye Gold Alliance
An alliance is established between the two companies,
and partners with the Seriti Institute and AfriGrow
Development to ‘restore the agricultural economy in
Westonaria’– with the full backing of these communities.
An organisational workshop with around 350 participants
is conducted.
Local community
procurement
This initiative focuses on community procurement, with
plans to increase current local spend significantly and
reduce unemployment. So far 500 enterprises and 4 900
people have been registered as potential suppliers.
Thusanang informal settlement
The Thusanang settlement, situated directly on the
border of the mine, is growing rapidly and a study
highlights the risks this poses. A plan to address these
will be rolled out in 2016.
Reinvigorating the
South Deep Trusts
Input and support is provided to the Trustees and
Administrators, who are independently developing a
strategy and implementation plan. The three trusts are
indicated below:
Societal acceptance driven through the
following initiatives:
Implement the community relations and
stakeholder engagement strategy and plan
Further develop the team’s community
relations capacity
Implement Phase 2 of the Gold Fields and
Sibanye Gold Alliance programme to restore
the agricultural economy in Westonaria
Implement the procurement and local
employment plan
Implement the plan to address social risks at
Thusanang
Implement an integrated stakeholder
communication plan
Re-measure community relationships
Measure the value of community investments
Integrated thinking
Facilitate business-wide integration of
sustainability and enhance societal
acceptable through communication of
Gold Fields’ – and the mining industry’s
– approach to sustainability
Westonaria
Community
Trust
South Deep
Education
Trust
South Deep
Community
Trust
Payments to date:
R14.6m
Key projects:
Sedibeng College
Westonaria Technical
College
Seriti Institute
AfriGrow Development
Thembekile Mandela
Foundation
Payments to date:
R43.8m
Key projects:
Sedibeng College
Edumap College
High School bursaries
University of the Western
Cape
Lapdesk
Payments to date:
R6.9m
Key projects:
Seriti Institute
AfriGrow Development
Philani
➤ end 2015
2016 onwards ➤
115
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Community trusts
In 2015, South Deep began
collaborating with the trustees of the
South Deep Education Trust, the
South Deep Community Trust and
the Westonaria Community Trust to
facilitate more effective delivery of
project benefits to host communities.
During Q4 2015, a strategy
document, informed by
engagements with key community
stakeholders, was ratified by the
trustees of the South Deep
Education and Community trusts.
During the year, there has been a
significant acceleration of funding by
the three South Deep trusts with a
particular focus on educational
initiatives, such as supporting two
tertiary technical institutions and
Early Childhood Development near
South Deep and allocation of
bursaries to high school and
university students in the Eastern
Cape and KwaZulu-Natal, two of the
major labour-sending areas of the
mine. During 2015 the South Deep
trusts spent a combined R12 million
(US$1 million) and the Westonaria
Community Trust R12.3 million
(US$1 million) on community and
education projects.
Local procurement
The local procurement project was
initiated in 2015, with the aim of
increasing the ability of local
community entrepreneurs to provide
goods and services to South Deep
and, potentially, other businesses in
the area and consequently stimulate
local job creation. Entrepreneurs in
host communities were interviewed
and around 500 enterprises and
4,900 individuals were recorded as
potential suppliers to South Deep.
This list will be further analysed
through a business diagnostics
exercise to be undertaken early in
2016 by a business incubator firm.
Thusanang community
The informal settlement of
Thusanang, which is located 1km
from South Deep, is the mine’s
closest host community and one
that has grown from about
370 households in 1999 to about
3,500 households in 2015. Only
about 10% of these households
have a member working, some of
them at South Deep, the remainder
are unemployed. This presents a
significant risk to South Deep.
A relationship assessment was
undertaken last year, and together
with the findings and
recommendations of a community
profiling exercise, forms the basis of
an action programme to be started in
early 2016. A key focus of the first
phase of this plan is to prevent any
further growth in the Thusanang
settlement, thereby giving South
Deep the opportunity to develop
alternative economic scenarios in
co-operation with local stakeholders.
SLP projects
In parallel to the development of the
extended community investment
strategy for Westonaria, South Deep
continued to invest in its SLP
projects during 2015. The most
important projects were:
❯ The restoration of the historic
Healdtown College in the Eastern
Cape completed in early 2015
❯ The building of the Thusanang
Community Clinic in our closest
host community with the facility set
to be handed over to the
Department of Health in early 2016
❯ The completion of a bakery at
South Deep, with the mine’s
hostels acting as anchor clients.
The bakery became fully
operational in February 2016,
employing five people
116
❯ Independent bakery funded by South Deep
The Gold Fields Integrated Annual Report 2015 Shared value
What is Shared Value?
Shared Value is created when
companies take a proactive role in
simultaneously addressing business
and social needs. Shared Value goes
beyond mitigating the potential harm
in a company’s value chain - it is
about identifying new opportunities for
economic success by incorporating
social priorities into business strategy
and working collaboratively with
multiple stakeholders to find solutions
to various socio-economic and
environmental issues. A key
component of this approach is to
ensure that the value created is
shared by the business and the
community. Strong local businesses
and skilled individuals contribute to the
overall economic upliftment and
sustainability of communities while
delivering the goods and services that
Gold Fields needs to develop and
operate its mines.
Shared Value at Gold Fields
The relatively low gold price and the
restructuring of Gold Fields’ key
operations has made maintaining
historical levels of SED spending a
challenge. Furthermore, it is not clear
whether SED spending is the most
effective way to support long-term,
sustainable community development.
In this context Gold Fields introduced
Shared Value to the business in 2012.
Implementation of Shared Value also
remains an imperative for Gold Fields
as a key component of maintaining
and strengthening our social licence to
operate. The Shared Value projects we
have implemented are aimed largely at
addressing the priority needs of our
host communities which include
employment, procurement, skills and
access to water.
Our Shared Value approach is based
on four key pillars:
1. Strategic interventions, to
proactively address socio-
economic challenges that can
drive community tensions,
non-governmental organisation
activism or more restrictive
regulations
2. Integration to proactively address
socio-economic challenges
3. Participation in collaborative
action with other stakeholders
4. Transparency regarding Gold
Fields’ economic contributions to
its host societies in line with World
Gold Council guidelines
Building on the Shared Value
projects that were initiated in 2014
the projects listed on the following
pages were either started in 2015 or
continued from 2014. The Damang
Quarry project, which was started
as a Shared Value project in 2014,
stalled in 2015 as a result of the
company planning to run the quarry
business encountering financial
constraints. A similar project
involving waste rock crushing and
screening was planned for Tarkwa
mine in 2015. This project has been
slow to start as a result of licencing
constraints experienced by the
independent business partner.
An additional Shared Value project is
to establish a strong local supplier
base among our host communities
at South Deep. This is detailed on
page 116.
Gold Fields’ will actively pursue the
listed Shared Value projects below
but we are also finding that
increasingly our SED spend is
channelled into projects that by their
nature benefit both the community
and our business. Since Shared
Value is becoming more integrated
and embedded there is no need to
delineate new projects – rather our
normal community investment spend
will offer similar benefits both to
communities and Gold Fields.
❯ Skills development training at South Deep
117
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Shared value projects
Tarkwa and Damang mine
(Ghana)
Road rehabilitation
❯
Project
Gold Fields Ghana, in partnership with the government of Ghana is upgrading the 33km road
between Tarkwa and Damang and paving the road surface in bitumen. The total cost of this
project is estimated at US$15 million over two years, of which Gold Fields will pay an estimated
35%. Contractors who will be building the road will be asked to prioritise local employment as
part of their recruitment policy. Contracts are expected to be awarded in early 2016.
❯
Benefit to the community
During construction of the road, job opportunities will primarily go to workers from our
impacted communities. The improved road infrastructure will benefit all public road users as
travel times, vehicular accidents and vehicle maintenance costs will be reduced. Roadside
communities will no longer experience dust emissions since the road will be surfaced.
❯
Benefit to Gold Fields
Gold Fields will save on the cost of transport as the maintenance of vehicles transporting
labour, goods and materials will be reduced. Road maintenance costs will also be reduced.
The improved infrastructure will also reduce employees’ travel time by 35 minutes per journey,
could limit driver fatigue and will enable emergency services to operate more efficiently.
South Deep
(South Africa)
Education and skills development
❯
Project
In 2014, Edumap College partnered with South Deep to help post-matric students who had
not achieved university exemption or had not been able to qualify for entrance into tertiary
institutions, to improve their grades in Mathematics and Science. They received extra tuition
and life skills training, and re-wrote matric at the end of the year.
The project was continued in 2015 through the South Deep Education Trust and a new intake
of students was enrolled in Edumap College. Further components were added to the project in
2015 - South Deep, in partnership with Sci-Bono, provided extra lessons in Mathematics,
Science and Accountancy for selected matric students from all schools in the local community.
The mine also partnered with the Provincial Department of Education in preparing
Grade 12 students for their final examinations via a residential camp providing motivational
talks and career guidance.
South Deep is currently looking at expanding this Shared Valve project to include the mine’s
sponsorship of the Wits University Mining Engineering School as well as working more closely
with the South Deep Education and Community Trusts, which are independently supporting a
range of early childhood development, secondary and tertiary education projects.
❯
Benefit to the community
Apart from the obvious benefit derived by the individual students, the broader community
benefits from the fact that an increased proportion of their youth is likely to receive tertiary
education and ultimately find employment. This is significant, given the fact that a single
employed individual in the mining industry supports on average eight dependants.
❯
Benefit to Gold Fields
The programme provides Gold Fields with a much-needed local skills pipeline of individuals
with mathematics and science-related degrees.
118
The Gold Fields Integrated Annual Report 2015 Cerro Corona mine
(Peru)
Water and the environment
❯
Project
This is a four-year programme started in 2014 to improve water quality and access to
communities of Hualgayoc in the mine’s direct area of influence and to promote, in partnership
with government, remediation of legacy mining activities (not associated with Gold Fields). The
programme involves building new potable water systems through the construction of a water
pipeline from a well at Cerro Corona, a programme to identify and repair water leaks in the
existing water infrastructure, and remediation of environmental liabilities that are contaminating
a local stream. More details can be found on page 100.
❯
Benefit to the community
Close to 90% of households in Hualgayoc now have access to sufficient clean running water.
Those families whose homes are situated at an altitude too high to be connected to the water
pipeline previously received water tanks from Gold Fields, and will now receive water supply
from a well located at Cerro Corona. Apart from strengthening relationships between
Gold Fields, the regulator and our host communities, the remediation of legacy mining sites
near Cerro Corona will significantly improve the quality of the water in the El Tingo river, on
which communities depend for various uses.
❯
Benefit to Gold Fields
Strengthens our social licence to operate in a region in which other mining companies have
experienced water-related conflict with local communities. It also reduces the cost of trucking
our water to the community.
Cerro Corona mine
(Peru)
Local suppliers
❯
Project
A three-year project, in partnership with SwissContact, was started in 2014 to build the
competitiveness of local suppliers. Fifty local businesses have been identified and are
undergoing business diagnostics and benefiting from an individual improvement plan and
technical training. A local supplier management system has been designed.
❯
Benefit to the community
Individual local suppliers will derive long-term benefit from targeted plans to help them improve
their competitiveness and diversity their customers while the broader community will experience
economic upliftment and employment opportunities from having stronger, sustainable local
businesses.
❯
Benefit to Gold Fields
Gold Fields will be able to obtain a better service at more competitive prices from
local suppliers.
119
The Gold Fields Integrated Annual Report 2015 5.2 Social licence to operate – Strategic focus areas (continued)
Human rights
Gold Fields applies a formal Human
Rights Policy statement, both in
dealing with its employees as well as
external stakeholders. The policy
statement is aligned to the relevant
ICMM Principles on Human Rights
and the United Nations’ ‘Protect,
Respect and Remedy’ Framework.
Under the policy statement, Gold
Fields commits to:
❯ Not interfering with or curtailing
other’s enjoyment of human rights
❯ Defending (where possible)
employees and third-party
individuals and groups (as defined
in our Community Policy) against
human rights abuses
❯ Taking positive action to facilitate
the entrenchment and enjoyment
of human rights
Given the nature of Gold Fields’
footprint, activities and relationships,
the human rights policy places
specific emphasis on:
❯ Community engagement
❯ Indigenous rights
❯ Resettlement
❯ Security and human rights
internally
Gold Fields upholds the highest
standards of human rights within its
workforce, including:
❯ Freedom from child labour
❯ Freedom from force or compulsory
labour
❯ Freedom from discrimination (while
recognising the need to address
the legacy of historical injustices in
South Africa)
❯ Freedom of association and
collective bargaining
All induction training (including that
provided by Gold Fields’ internal
protection services team) includes
key human rights elements – and the
Group's internal grievance
mechanisms help ensure employees
and contractors can raise human
rights concerns. All grievances are
handled by Gold Fields Human
Resources departments, which use a
defined process to record, evaluate
120
and address legitimate complaints.
Employees can also raise concerns
via independent counsellors as part
of Gold Fields Employee Assistance
Programme.
Externally
Under the United Nations’ ‘Protect,
Respect and Remedy’ Framework –
and the associated Guiding
Principles on Business and Human
Rights – it is incumbent on Gold
Fields to carry out human rights due
diligence not only on its own
activities, but also on its business
relationships.
Contractors and suppliers
Gold Fields’ business relies on
multiple contractors and suppliers to
carry out mining, development,
construction and other forms of work
on its operations. All contractors are
included in Gold Fields’ own health
and safety management systems, to
help ensure that contractor
employees benefit from safe and
healthy working conditions.
All contractor employees wishing to
report human rights violations are
able to make use of Gold Fields’
confidential, third-party
whistleblowing hotline. Where such
complaints are made, Gold Fields will
pursue the matter appropriately.
Gold Fields does not currently carry
out human rights due diligence on its
suppliers. Nonetheless, the Group
has developed an external party
screening solution to establish risk
profiles of external suppliers and
contractors. Among other criteria,
the tool screens new and existing
contractors and suppliers for human
rights and related violations and/or
transgressions (p38).
Security providers
Gold Fields’ protection services team
works with both private and public
security providers – for the effective
and responsible protection of
workers and assets. All private
security contractors receive human
rights training during induction –
based on local legal requirements,
as well as national and international
human rights best practice, including
the Voluntary Principles on Security
and Human Rights. Gold Fields is
also a signatory to the International
Code of Conduct for Private Security
Service Providers and the United
Nations Global Compact. There were
no formal complaints made against
Gold Fields’ internal or external
security providers in 2015 in relation
to human rights violations.
Materials stewardship
As part of its efforts to improve
human rights performance within its
broader value chain, to protect the
reputation of its core product and to
maximise the societal benefits of its
activities, Gold Fields is committed to
responsible materials stewardship. In
this context, Gold Fields supports
global efforts to tackle the use of
newly mined gold to finance conflict.
There is currently only a minimal risk
of externally derived conflict gold
entering Gold Fields’ value chain.
This is because:
❯ None of Gold Fields’ mines are
located in conflict-affected
countries
❯ All gold produced originates from
Gold Fields’ own operations
❯ No gold is purchased from
artisanal miners
Gold Fields has voluntarily adopted
the Conflict-Free Gold Standard of
the World Gold Council (WGC). This
has led to the standard being applied
at all relevant locations through full
assurance audits. This is a
requirement of London Bullion
Market Association (LBMA)
accredited refineries. In addition, the
company reports in accordance with
the WGC guidelines on value
creation and distribution. Although
Gold Fields withdrew its WGC
membership in 2014, it has and will
continue to apply both the Standard
and guidelines.
The Gold Fields Integrated Annual Report 2015 6
Focus on people
6.1 Driving a high-performance culture
6.2 Strategic focus areas
❯ Talent management
❯ Performance management
❯ People management
❯ Communication and engagement
❯ Supportive work environment
6.3 Remuneration and benefits
p122
p126
p126
p128
p129
p129
p130
p132
❯ Twin shafts and winder
house at South Deep
121
121
6.1 People – Driving a high-
performance culture
Overview
Group human resources performance
Category
Total employees (excluding contractors)
Contractors
HDSA employees in South Africa (%)¹
HDSA employees in South Africa (%) - Senior management¹
National employees in Ghana (%) excluding contractors
Minimum wage ratio²
Female employees (%)
Ratio of basic salary men to women
Employee wages and benefits (US$m)
Average training (hours per employee)
Employee turnover (%)4
2015
9,052
7,798
71
48
99
1.50
14.00
1.09
410
240
8.00
2014
8,954
6,486
71
47
99
1.70
14.00
1.10
468
181
20.20
2013
10,167
6,685
70
44
99
3.00
10.90
1.20
595
97³
10.00
20125
9,684
8,961
68
31
98
3.00
12.00
1.43
780
142³
8.00
1 Excluding foreign nationals, but including white females and corporate office staff; HDSAs – Historically Disadvantaged South Africans,
according to the Employment Equity Act definition
2 Entry level wage compared to local minimum wage. The narrowing of the ratio reflects a sharp rise in the minimum wage in Ghana
3 Figures do not include Yilgarn South assets
4 Includes voluntary and involuntary turnover
5 Excludes Sibanye Gold
The profile of our workforce was
profoundly impacted during the
initial years of our Group-wide
transformation journey (2012 – 2014)
with large-scale reductions in the
number of employees and
contractors. However, since then our
human resource base has stabilised
with 9,052 employees and
7,798 contractors on our books
at the end of 2015. Since the
restructuring our smaller, yet more
skilled, workforce has ensured that
Gold Fields works more efficiently
within more constrained budgets
and we believe that the size and
skills level of the workforce is
appropriate to successfully deliver
our business strategy.
Gold Fields’ People Strategy focuses
on building a high-performance
culture that ensures our people
deliver on the business strategy of
creating shareholder value through
cash generation from a portfolio of
largely mechanised assets.
Today our business requires a
smaller, highly skilled workforce that
can work more efficiently, within
leaner budgets, and that is
122
incentivised to deliver against clearly
defined performance targets. To
ensure our People Strategy supports
our business objectives, the
following five focus areas have been
identified, of which the first four are
incorporated into the Group
balanced scorecard:
5. Supportive work environment:
ensuring employees have the
environment and tools needed to
function optimally, taking into
account their holistic wellbeing,
so that we have a safe, healthy,
balanced and productive
workforce.
1. Talent management: ensuring
we have the right people in the
right jobs at the right time
2. Performance management:
measuring, incentivising and
motivating people to expend
discretional effort to deliver high-
performance results
3. Communication and
engagement: ensuring
employees have the information
and two-way engagement
platforms they need to
understand and operationalise
the business strategy
4. Great people managers:
building strong people
management skills in line
managers, and empowering them
with the tools and processes
necessary to understand, attract,
motivate and manage a diverse
workforce
Critical to the success of the new
People Strategy is the launch of a
new centralised electronic human
resources platform, called
‘SuccessFactors’, which replaces
the different software systems used
by the regions. It houses a full suite
of modules across the HR value-
chain – for the first time the balanced
scorecard, talent reviews,
succession planning, learning
management, recruitment and
compensation will be integrated on a
single user-friendly platform. It
provides real-time HR information to
managers, as it is integrated to our
payroll system, and also facilitates
two-way feedback from employees.
The Gold Fields Integrated Annual Report 2015 Total workforce by region
2015
Americas
Australia
South Africa
West Africa
Corporate Office
Total
Proportion of Nationals per region
Peru
Australia
South Africa1
Ghana
1 Nationals includes all South Africans and excludes all foreign nationals
Total
workforce
Permanent
employees
Contractors
2,044
2,206
5,837
6,670
93
16,850
375
1,549
3,699
3,336
93
9,052
2015
99.5%
98.0%
81.0%
99.0%
2014
99.2%
98.0%
84.0%
99.0%
1,669
657
2,138
3,334
–
7,798
2013
99.9%
97.0%
83.0%
99.0%
❯ Underground employee at our Australian operation
123
The Gold Fields Integrated Annual Report 2015 6.1 People – Driving a high-performance culture (continued)
What we achieved in 2015
1. Talent management
We continued to enhance talent management by:
❯ Evolving our talent review process to align to the
Ensuring employees have the
information and two-way
engagement platforms they
need to understand and
operationalise business
strategy
Communication
and engagement
3
A compelling
value proposition
to drive
an engaged
workforce
Performance
management
2
Measuring incentivising and
motivating people to expend
discretionary effort to deliver
high-performance results
Talent
management
Ensuring we have the right
people in the right jobs at
the right time
1
business’ talent needs
❯ Rolling out a talent pipeline strategy for each region,
to take emerging talent through a structured career
development path
❯ Strengthening our recruitment practices by
introducing more robust psychometric tests
2. Performance management
Progress in performance management was achieved by:
❯ Refining the Balanced Scorecard (BSC) pillars to focus
on Financial, Business Optimisation, Social Licence to
Operate and People
❯ Linking each BSC pillar to smaller, achievable, directly
linked objectives
❯ Cascading Group objectives to regional, operational,
departmental and individual scorecards
❯ Providing line managers with targeted training to
conduct performance conversations
❯ Maintaining the clear link between incentives and
performance
3. Communication and engagement
Steps to improve communication and engage employees
included:
❯ Approving and implementing a Group-wide internal
communications strategy
❯ Adopting various internal engagement tools to
facilitate two-way communication with employees
❯ Conducting a series of roadshows, hosted by our
CEO, addressing employees in each region
❯ Sharing of operational and Group results by
regional management
4. Great people managers
Achievements in people management included:
❯ Achieving positive participation in our management
development programme
❯ Finalising our expanded suite of leadership
training programmes
❯ Tracking our capabilities, enhancing training, and
directly linking people management and incentives
5. Supportive work environment
We continued to build a supportive work environment
through:
❯ Focusing on our comprehensive regional wellness
programmes centred on employees’ specific needs
❯ Rolling out our Employee Value Proposition as part of
the Gold Fields DNA training
124
The Gold Fields Integrated Annual Report 2015 Focus areas for 2016
1. Talent management
With a longer-term view of talent and development, we will focus
on:
❯ Redefining team and leadership competencies
❯ Implementing an increasingly integrated and purposeful
succession planning programme
❯ Enhancing the alignment between career and succession
plans
❯ Linking learning to competency gaps
❯ Increasing talent segmentation through more rigorous
performance management
2. Performance management
Looking beyond key performance indicators, we will focus on:
❯ Continuing to assess how line managers enable
performance and undertaking further training to fill
the gaps
❯ Increasing our focus on managing poor performers
❯ Ensuring ongoing communication to strengthen the link
between strategy and performance measures
❯ Harnessing trend data and metrics related to high and low
performers through Success Factors
3. Communication and engagement
We will continue to improve communication through:
❯ Focusing on making the business strategy relevant to our
regions, operations and individuals
❯ Launching new communications training for line
management
❯ Introducing new ways of cascading messages to all
employees
❯ Revitalising the Gold Fields DNA, Values and Vision in line
with Gold Fields’ evolution
❯ Integrating all internal communications into our Success
Factors platform to enhance two-way engagement
4. Great people managers
Steps to improve people management will include:
❯ Identifying hurdles to successful people management and
rolling out targeted training to address the gaps
❯ Refining people management objectives in the BSC
❯ Investigating incentives for better people management
❯ Enabling managers to celebrate team members’
achievements on recognition platforms
5. Supportive work environment
We will build a supportive work environment by:
❯ Continuing to refine and communicate our Employee
Value Proposition
❯ Focusing on wellness issues specific to regional needs,
including:
❯ The mental health of Fly-In-Fly-Outs (FIFOs) in Australia
❯ Financial wellness and malaria management in Ghana
❯ Sports and nutrition in Peru
❯ The provision of housing, lifestyle disease management
and financial wellness in South Africa
125
Great people
managers
4
Building strong people
management skills in line
managers, and empowering
them with the tools and
processes necessary to
understand, attract,
motivate and manage a
diverse workforce
Supportive work
environment
5
Creating an environment for
employees to function
optimally and taking into
account the holistic wellbeing
of employees to ensure
a safe, healthy, balanced,
productive workforce
The Gold Fields Integrated Annual Report 2015 6.2 People – Strategic focus areas
Talent management
Approach
The provision of world-class training, skills development and management
training is central to driving a high-performance culture. It enables the Group to
attract and retain the best talent; enhance employee productivity and safety;
and achieve its strategic objectives.
In 2015, approximately US$12.4 million was spent on training and skills
development across the Group (2014: US$13.4 million). This was invested
chiefly in the delivery of fit-for-purpose technical training, comprehensive
leadership development programmes and training to ensure global alignment
with the new Gold Fields culture.
Having ‘the right people in the right jobs at the right time’ can be further defined
as follows:
The right people
People with technical and
leadership competencies that are
aligned to the business strategy,
who embody the Gold Fields
Values and are able to deliver
sustained levels of high
performance
at the right time
Ensuring our talent
pipeline serves the business’
talent needs,
now and in the future.
in the right jobs
Making sure that we match
our talent to roles that are
informed by strategically
aligned organisational design.
Certain Group-wide strategies,
policies and structures are in place to
drive the talent management agenda.
The talent acquisition strategy and
the training and development
strategy take into account Gold
Fields’ immediate and long-term
talent requirements, while the
performance management system
seeks to reward and retain top
performing talent.
There is flexibility in how the regions
approach talent acquisition and
management. This helps ensure that
regions are able to determine the
best approach to meeting the
specific requirements of their
operations.
Group-level talent management
in 2015
Evolving the talent review
process
Historically, the talent review has
focused only on high-potential
D-band and above employees, who
represent the future leadership of
the business. However, a large
proportion of our high-performing
employees are skilled specialists in
their field who may not have
leadership aspirations but are
nevertheless critical to the
organisation. Their wealth of skill and
experience makes them difficult and
costly to replace, and they form the
very core of the high-performance
culture we are trying to build.
A targeted programme is required to
engage them and understand their
needs and drive their growth and
development. For this reason, talent
councils are being established in
each region in 2016 to identify high
potential and high performing talent.
Each region is tasked with
developing relevant programmes
for their operations.
Australia
In Australia, the Fly-In Fly-Out (FIFO)
working arrangements are better
suited to our operations in remote
areas where employees are either
required to live in camp or fly in and
fly out. Only the St Ives mine offers
126
The Gold Fields Integrated Annual Report 2015 full-time residential opportunities,
though it does not have quality high
school facilities or major tertiary
educational institutions. This makes
it difficult to retain individuals when
they eventually settle down and start
families or their children need to go
to high school. This, along with the
challenge of attracting permanent,
skilled people to work on remote
mines, accounts for the higher
employee turnover in Australia
particularly among younger staff
(15% in 2015, down from 18% in
2014).
Talent management strategies
employed
Across all Australian operations,
we run internal technical training,
leadership development training and
training in contractor management.
Where opportunities for growth and
promotion are not readily available,
the region has created opportunities
for employees to gain development
through other channels. The talent
review process also identifies
individuals who will benefit from
exposure to other sites in the region.
South Africa
In South Africa, socio-economic
factors drive an extremely high
unemployment rate among young
people and there is significant
pressure on mining companies to
create employment opportunities.
However, poor standards of
education and lack of opportunity to
study at a tertiary level, means many
unemployed South African youth do
not have the education and skills
required by our South Deep
operation, which relies on specialist
and currently rare skills in
mechanised mining.
Talent management strategies
employed
As South Deep, we have found that
the existing skills base of our miners,
largely recruited from conventional
gold mines in South Africa, is not
sufficient for the mechanised mining
equipment and machinery required
at the project. To augment the
current skills base, South Deep
therefore recruited an additional
146 skilled employees during 2015,
mostly from the platinum sector,
which has a similar mechanised
mining skills set. The three-year
wage agreement with South Deep’s
trade unions, signed in April 2015,
sets the remuneration framework
which facilitates the recruitment and
retention of the required mining skills.
However, our strategy remains to
grow the majority of our own people
through focused internal training.
During the year, we provided training
programmes to 47 artisans, working
on our fleet of equipment as well as
15 junior managers, mine
supervisors and mine overseers, to
equip them with critical mechanised
mining and engineering skills. There
was also a focus on management
and other leadership skills.
Since South Deep is at a critical
juncture in bringing the mine up to
higher production levels, this has
necessitated a fine balancing act
with the need to implement
comprehensive skills development
plans. For example, to address the
upskilling of our artisans, a two-year
agreement was reached with
AtlasCopco, one of South Deep’s
original equipment manufacturers
(OEM). Under the agreement, all
artisans and foremen at a segment
of the mine have been redeployed to
new working areas and will undergo
a comprehensive training programme
to bring their skills up to the level
required by the mine. While they are
receiving this training, the OEM
contractors will maintain the
machinery used in the trackless
environment. Once the two-year
period is up, artisans and foremen
will have the opportunity to return
to their original workplaces, and
machine maintenance will again be
managed internally.
Literacy levels on the mine remain an
ongoing skills challenge, which we
continue to address through a
targeted training programme. A key
focus of the people pillar in South
Deep’s new operational plan is to
collaborate with the wider mining
industry, tertiary institutions,
equipment suppliers and other
external players to develop a strong
skills development capacity and
adopt leading practices.
Gold Fields is committed to
employing HDSA, where possible, as
this maximises the impact of South
Deep in terms of economic value
generation and skills transfer. It is
also in line with the aims and targets
set out by relevant employment
equity regulations. At the end of
2015 69% of South Deep’s total
employees were HDSA (as defined
by the Mining Charter) and 50% of
its senior management team.
West Africa
Education levels among young,
urban Ghanaians are high but there
is intense competition for
employment opportunities. While this
makes it easier for the Company to
build a talent pipeline from the
ground up and, to meet its
localisation targets, it also means
that the Company has to keep
employees well rewarded and
engaged to retain them.
Talent management strategies
employed
The key talent management focus
areas are localisation and
employment of people from host
communities; retaining high potential
employees; and skills development
of operators.
Bursary programmes benefit youth
in local communities, but there are
currently few opportunities to create
on-mine employment for them due
to the depressed mining market. On
the localisation front, around 95% of
managerial positions are held by
locals, as Ghana has a
comprehensive skills transfer and
mentoring programme in place which
ensures that expat employees are
paired with potential local
successors.
Some employees have been sent on
short-term assignments outside of
the Company to offer them exposure
127
The Gold Fields Integrated Annual Report 2015 6.2 People – Strategic focus areas (continued)
to growth opportunities and keep
them engaged and motivated. Other
training programmes during the year
have focused on improving operator
efficiency and certification, short-
term assignments for high-potential
employees, and on-the-job coaching
and training.
It is important to note that high
quality education does not
necessarily reach young people in
the host communities around our
mines in Ghana, South Africa and
Peru and that many of the skills
come from other parts of the country.
But since our social licence to
operate is tied to expectations from
these communities there is a strong
focus on implementing programmes
that educate and upskill young
people in the communities adjacent
to these operations.
Americas
Contextual challenges
In Peru, we have a highly skilled
workforce, which means that the
Company needs to deliver strong
remuneration and other benefits as
well as growth opportunities to
ensure it keeps its employees
engaged and motivated.
Talent management strategies
employed
The key talent management focus in
Peru is on developing leadership
skills. Peru continued to run the
Young Talent programme that invests
in top university students studying in
a range of industry-related fields. A
three-year work-back arrangement
forms part of the agreement and
involves a full career development
plan that includes mentoring. In
2015, 10 people benefited from the
programme. In the year ahead, the
programme will be expanded to
include students who are studying
degrees in the technical fields of
mining.
The region’s career path programme
also focuses on further developing
the skills of operational and technical
employees and during the year Cerro
Corona invested US$330 000 in
dedicated technical training
programmes. Successful progress
through training stages are linked
to salary increases and bonuses
commensurate with their enhanced
skills levels.
Performance management
Approach
The performance management
system, driven through the
Balanced Scorecard (BSC) for D
and E-band (middle- to senior
management and professional)
employees, ensures we identify,
incentivise, reward and thereby
retain top performers, and identify
skills gaps among low-performers
that could be addressed through
training and development
programmes.
The BSC is structured around four
key business pillars: financial,
business optimisation, people and
social licence to operate. Within
each of these pillars, key focus
areas are identified, and matched
to goals and, finally, metrics for
delivery.
Through a structured cascading
model, the Group BSC informs the
BSCs for each of our regions, which
in turn drive operational,
departmental and then individual
BSCs. An employee’s BSC rating is
a 35% determining factor in their
annual bonus calculations, with the
Group’s performance determining
the remaining 65% portion. This
percentage varies based on the
position of the employee.
Performance management
initiatives during 2015
The BSC itself is reviewed and
refined on an annual basis. The four
pillars for 2015 were adopted to
ensure greater alignment with
Group business objectives and the
number of objectives reduced to a
smaller, more focused group. The
BSC was again adjusted around the
same four pillars for 2016 (p26).
Introducing a new production
bonus system at South Deep
Bargaining unit employees at our
South Deep operation are measured
and rewarded through a production
bonus system, instead of the BSC.
Following issues raised in 2014 by
trade unions, the mine introduced a
new production bonus system in
2015, ensuring that the behaviours
being driven and rewarded on the
mine support the achievement of
South Deep’s business objectives
and entrenching the high-
performance culture necessary
to the success of this critical
operation.
The following bonus parameters
have been incorporated in the new
bonus system: gold produced,
metres/tonnes produced, and
safety performance. Gold produced
and delivered out of the plant
serves as a qualifier, which means
that the mine must first produce
gold before any bonus parameter
kicks in.
The performance of individual
crews – not whole corridors – is
measured, ensuring greater
accountability is devolved to the
level of small teams and individuals.
All teams are now measured on
tonnes or metres advanced – in
line with mine design. The new
production bonus system also now
includes all employees on the mine,
which rallies employees around the
achievement of a single, common
goal.
Safety remains a key metric in
the new production bonus system
and accounts for 30% of every
employee’s production bonus. A
leading safety indicator has been
added to ensure employees are
rewarded for behaviours that
proactively work to prevent safety
incidents – and not simply penalised
for accidents. The safety score is
now split evenly between lead and
lag indicators.
128
The Gold Fields Integrated Annual Report 2015 Finally, South Deep introduced a
quarterly gold sharing scheme in
addition to the monthly production
bonus. This scheme benefits
employees in core production and
core support jobs, further
incentivising and rewarding them for
gold produced over the quarter.
People management
Approach
Closely linked to performance
management is our emphasis on
building strong people management
skills in line management. We have
a contingent of technically skilled
individuals, but these competencies
are not necessarily matched by
strong people management skills.
Line managers are the link between
the organisation and its people, and
it is imperative that line managers
are empowered with the skills and
tools to engage, motivate and drive
performance in their teams. As such
a people pillar was included in the
BSC as a first step in measuring
and incentivising the people
management capability of line
managers.
The majority of our management
team participates in the Group’s
Management Development
Programme. We also finalised an
expanded suite of leadership
training programmes to equip
managers with the tools to have
meaningful, targeted performance
conversations with team members.
Refined leadership competencies
expected of Gold Fields managers
and leaders together with the
introduction of more robust
psychometric assessments, will
ensure that our recruitment
practices support the selection of
the right kinds of people managers.
Communication and
engagement
Communication and engagement
was one of the areas rated below-
par by employees in a 2014 internal
climate survey. Employees
highlighted the need for
communication that created a
clearer link between Group and
regional strategy, and the role of
each employee. As a result, the
internal and external
communications functions were
split and internal communications
was moved from corporate affairs
to human resources, where an
in-depth understanding of the
employee audience is housed.
Communication focus during
2015
Communicating strategy and
purpose
During 2015, a new Group internal
communications strategy was
approved. It drives consistent,
improved communication –
informed by business strategy and
goals – from the Group to
employees, and seeks to develop
effective, cascading two-way
engagement platforms so that
employees can communicate with
the Group.
One of the key focus areas during
the year was the standardised
communication of the Group-wide
strategy, key strategic objectives for
the year, and how the Group is
performing against these objectives
on a quarterly basis. A variety of
communication channels were
used, including video, poster
campaigns and on-site
presentations at a regional and
operational level. Our new
interactive communication system,
housed in the SuccessFactors
platform, also facilitates improved
two-way communication between
the Group and employees.
In many operations line
management engages with the
workforce on a regular basis,
but this is often driven by the
communication skills and aptitude
of individual managers. There is a
clear need to build standardised
structures that ensure that line
management have the tools,
training, platforms and material
to engage with their teams.
During the year, Peru developed
and rolled out a structured
communication model that provides
line managers with an easy-to-use
toolkit to systematically cascade
important messages to their teams.
This tool will be adapted for other
regions and operations during
2016.
Group leadership continued to drive
the communication agenda during
the year. In Peru, Australia and
Ghana, regional Executive Vice-
Presidents or mine General
Managers held formal
communication sessions with
employees at least on a quarterly
basis. The new management team
at South Deep will adopt similar
practices in the year ahead.
Understanding what employees
think and feel
Comprehensive employee surveys
provide a holistic view of employee
concerns, and Gold Fields will
continue to run them every second
year with shorter surveys taken
annually.
A user-friendly digital survey
software package was purchased
during the year to facilitate the
roll-out of shorter, more frequent
‘pulse surveys’. It was used to great
effect in rolling out a follow-up
survey to the 2014 climate survey,
which focused on the four lowest-
scoring areas: performance
management, recognition, training
and development; and
communication and engagement.
Wage gap
Executive remuneration remains a
sensitive issue, globally. However,
companies in development
countries, like South Africa, face an
added complexity. Scarce skills and
talent retention remain a challenge
but this has to be countered by the
need to remain globally competitive
against countries with cheaper
labour rates.
129
The Gold Fields Integrated Annual Report 2015
6.2 People – Strategic focus areas (continued)
Balancing these challenges places
wide-ranging responsibilities on
executives. Furthermore,
heightened disclosure of executive
pay has required remuneration
committees to ensure that their
executives’ wage packages are not
out of line with those in their peer
group.
The wage gap – broadly defined as
the difference between executive
pay and earnings of those working
at the lowest levels of a company
– has become a controversial issue
in South Africa. Socio-economic
tensions and widespread labour
unrest are partially attributable to
perceived pay disparities and
disclosures of executive pay levels.
For most of the past decade
executive pay hikes have exceeded
those of lower level employees.
However, despite the global upward
pressure on executive pay levels,
the wage differential has narrowed
in recent years amid higher annual
increases awarded to employees
represented by organised labour.
This has certainly been the case at
our South Deep mine in South
Africa where we struck an
agreement in April 2015 with
workers in the bargaining units that
will result in an average salary
increase of over 10% in each of the
next three years. At entry levels the
annual increase was as high as
20.9%.
This has and will continue to
contribute to significantly closing
the wage gap between our CEO
and workers at entry level.
Union engagement
In South Africa and Ghana, unions
are a vital stakeholder at our
operations with 93% and 96% of
employees respectively holding
union membership in those
countries. In Peru 10% of our
workforce are represented by a
trade union, but this is exclusively at
one of our major contractors. While
we value and will continue to drive
direct engagement with employees,
we recognise the important role that
unions play in representing the
interests of the workforce
Ghana
Over the past three years Ghana
has made considerable progress in
strengthening the relationship with
unions. This has been helped by
a salary benchmarking and
adjustment exercise that now
places Gold Fields Ghana’s salaries
among the most competitive in the
industry.
During the year, declining
production at our Damang
operation necessitated a review of
employee numbers. Constructive
engagement with the unions
resulted in a Memorandum of
Understanding being signed for
Damang to retrench 401 employees
by the end of March 2016, the
majority of whom will be employed
by the contractor.
In early 2016, we also completed
wage negotiations with the Ghana
Mineworkers Union for 2015. Wage
negotiations for 2016 could take
place through centralised bargaining
via the Ghana Chamber of Mines.
Details are discussed in the
Remunerations section on
page 132.
South Africa
In South Africa, the relationship with
the unions has historically been a
difficult one, and in the context of
repeated changes in South Deep
management it has been a
challenge to cement a sustained
positive relationship. However, a
great deal of work has been done
engaging with the unions over the
past year, and the relationship has
improved considerably. This is
evidenced by South Deep’s signing
a ground-breaking three-year wage
deal with unions that allowed it to
avoid industrial action seen at other
mining companies during the year.
The details of the agreement, which
seeks to accommodate the different
skills set required at South Deep
compared with other gold mines in
South Africa, are discussed in detail
under Remuneration on page 132.
In 2016, the internal
communications strategy will be
augmented with policies and
structures that include the
introduction of a standardised,
Group-wide cascading model. Line
managers will receive targeted
communication training, and a
central automated communication
platform will be rolled out across
the Group as the central
communication hub.
Supportive work
environment
Gold Fields strives to create an
environment that allows employees
to function optimally, taking into
account their holistic wellbeing to
ensure a safe, healthy, balanced
and productive workforce. This
includes taking an integrated view
of the employee, both during and
outside of work hours, including
their financial, mental and physical
wellbeing, as well as things like
nutrition, housing and living
conditions, stress and fatigue
management and optimal job fit.
The wellbeing needs of employees
differ between regions and
programmes are therefore
implemented at a regional level
to deal with challenges specific
to each employee group.
All regions have comprehensive
wellness programmes in place. In
2015, Peru invested US$600,000
upgrading camp facilities at Cerro
Corona. This included the
construction of expanded gym
facilities, an indoor sports centre,
130
The Gold Fields Integrated Annual Report 2015
a recreation area with barbeque
facilities and construction of
additional rooms. Peru also offers
employees a range of extramural
activities and classes.
In Ghana, a new staff recreation
centre was constructed at Tarkwa
to benefit all employees, while the
staff hospital at Tarkwa, which is
also used by community members,
was refurbished and placed under a
new local management company.
In Australia, supportive work
arrangements focus both on the
camps in which employees live as
well as the fly in and fly out
arrangements. While the roster
arrangements have remained stable
over the past few years – for most
employees that is 14 days at work
and 10 days off – or eight days at
work and six days off, Gold Fields
has successfully negotiated better
flight arrangements and aircraft at
some of its sites. Similarly, the camp
sites have been upgraded and Wi-Fi
access rolled-out at all camps.
Fatigue management was a critical
element of our wellness strategy in
Australia last year and St Ives
changed its working hours to
reduce the fatigue risk at the mine.
In South Africa, accommodation for
mine employees is regulated under
the Mining Charter. We have met all
the relevant conditions including a
requirement that each South Deep
employee resident in our hostels
must have his or her own room –
this was achieved in December
2014 after a R150 million
investment in a hostel upgrade
programme creating 848 single
accommodation and 203 family
units. We are also finalising a
housing acquisition and
development programme – at a
cost of around R346 million –
through which around 850 houses
in neighbouring districts will be
made available to employees to
purchase or lease.
A new home ownership scheme –
Tswelopele – was launched
following the finalisation of the
South Deep wage agreement. It
seeks to assist employees to rent
these homes or buy them at a
discounted purchase price.
The scheme benefits employees in
the C-band and below, providing
them with a R3,000 per month
housing allowance for the first two
years of the agreement, with an
increase to R3,500 per month in the
third year. This housing allowance
can be used to pay rent in a South
Deep-owned or approved house
within a 50km radius of the mine, or
to service a bond should they wish
to purchase a house.
The Tswelopele scheme offers a
R100,000 interest-free loan to
qualifying employees to assist them
in securing a bond. The scheme
also supports employees through
financial literacy training, borrower
education, negotiation with banks
for favourable bond interest rates,
assistance with completion and
submission of forms among others.
❯ South Deep plant
131
The Gold Fields Integrated Annual Report 2015 6.3 People – Remuneration and
benefits
Introduction
The remuneration and benefits
offered to employees play a central
role in attracting and retaining key
talent. These are discussed in the
Remuneration Report on pages
43 – 62 of the Annual Financial
Report (AFR).
During 2015, the South Deep wage
and Ghana wage negotiations were
the most notable remuneration and
benefits events and are discussed
below.
South Deep wage agreement
South Deep’s bargaining unit
employees received an average 10%
salary increase over the three-year
period of the wage agreement that
came into effect in April 2015.
However, the agreement varies
depending on the employee category
and goes beyond wage increases to
provide employees with a range of
benefits. These include:
❯ A scarce skills allowance of
R4,000 per month in the first year,
escalating by R500 per annum
over the next two years, for
TM3 artisans and Category 1
machine operators
❯ A retention allowance of
R1,000 per month for Category 2
machine operators and artisans in
the plant, backfill, shafts as well as
tramming and recovery areas, for
each of the three years covered by
the agreement
❯ An increase of 20,96%, 14,29%
and 12,5%, respectively in each of
the three years, for Category
4 – 8 employees and an 8%
increase per year for miners,
artisans and officials
❯ A housing allowance to replace the
current living out allowance over
the three-year period (p131).
Ghana wage agreement
Gold Fields Ghana concluded 2015
wage negotiations with the Ghana
Mineworkers’ Union (GMWU) for the
bargaining units in early 2016. The
outcomes included:
❯ A 5% increase on basic pay
132
❯ A GHS 1,000 (US$250) one-off,
development reimbursement
❯ A 30% rent allowance for
employees not accommodated by
the Company
The Ghana Chamber of Mines has
proposed collective bargaining with
the GMWU for the 2016 wages and
working condition negotiations. The
GMWU has not consented to this
and by March 2016 negotiations had
not commenced.
Summarised Remuneration
Report
This is a summarised version of the
Remuneration Committee’s
Remuneration Report, the full version
of which can be found on pages
43 – 62 of the AFR.
The key principles of Gold Fields’
remuneration policy are to:
❯ Ensure that the Group’s executive
remuneration policy encourages,
reinforces and rewards the delivery
of sustainable shareholder value
❯ Provide competitive rewards to
encourage ownership in the
business, as well as setting stretch
performance targets for the
delivery of reward-based variable
short-term and long-term incentive
plans for its executive directors
and senior management
❯ Motivate and reinforce individual,
team and business performance in
the short, medium and long term.
The remuneration strategy is
underpinned by sound remuneration
management and governance
principles, and comprises the
following key elements:
❯ Guaranteed pay
❯ Benefits
❯ Short-term incentives (STI), i.e.
annual performance bonuses
❯ Long-term cash incentive
instrument i.e. as detailed in the
Long-Term Cash Incentive Plan
(LTIP).
Gold Fields’ remuneration philosophy
aims to attract and retain motivated,
high-calibre employees, whose
interests are aligned with those of
our shareholders. This is achieved
through a balance of guaranteed and
performance-based remuneration
(variable pay).
The pay components for our executives are displayed below:
Total remuneration actual outcomes for 2015
(US$’000) (An average exchange rate of US$1= R12.68 for 2015 was used)
CEO actual
1,081
619
1,133
CFO actual
571
617
568
EVP actual
484
442
247
0
1,000
2,000
3,000
Gross remuneration package
Annual performance bonus
Long-term incentives
The Gold Fields Integrated Annual Report 2015 Guaranteed pay and benefits
(remuneration package)
Gold Fields’ policy is to reward its
people fairly and consistently
according to their role and their
individual contribution to the Company
and its performance. As a global
Company, with the majority of our
operations now outside South Africa,
we expect our senior executives to
have global experience. We therefore
compete for talent in a global
marketplace, and our approach to
remuneration takes account of the
need to be competitive throughout the
various jurisdictions in which the
Group operates.
To achieve external equity and
competitive remuneration, Gold
Fields uses surveys of peer group
mining companies. During the year,
Gold Fields contracted Mercer
Consulting South Africa to provide a
comprehensive analysis of the Group
Executive Committee’s remuneration.
The study confirmed that the
compensation of executives is in line
with Gold Fields’ position in the
basket of comparative companies.
Gold Fields also provides, where
appropriate, additional elements of
compensation, including retirement
savings, healthcare assistance, life
and disability insurance, housing and
personal accident cover.
The 2016 annual gross remuneration
packages, or GRP, payable to the
CEO, Nick Holland, and the CFO,
Paul Schmidt, as determined the
Remuneration Committee, were as
follows:
❯ Nick Holland: R10,252,100 plus
US$390,000
❯ Paul Schmidt: R6,478,000 plus
US$119,000.
In addition to the GRP, each
executive director is entitled, among
other things, to benefits that
comprise participation in the Gold
Fields Long-Term Cash Incentive
Plan; consideration of an annual
incentive bonus based on the
fulfilment of certain targets set by the
Board of Directors; and an expense
allowance.
In 2015, the ratio of average
executive director compensation vs
average employee compensation
was 21.3.
This ratio has reduced from 25.02 in
2014 as a result, among others, of
the above inflationary wage increases
received by our employees in
South Africa in terms of three wage
agreement reached in 2015 (p129).
Short-term incentives (Annual
bonus)
Executive directors are eligible to
earn performance bonuses of 60%
of GRP for the CFO and 65% of
GRP for the CEO for on-target
performance, which comprise both
individual and strategic performance
objectives as well as wider Group
objectives. The annual bonus could
increase above 60% and 65%
respectively if the stretch target
is achieved.
The Remuneration Committee sets
targets for annual bonuses. In the
case of the CEO and CFO, 65% of
the performance bonus is based on
Group objectives and the remainder
is based on individual strategic
objectives. For the regional Executive
Vice-Presidents, bonuses are judged
against Group, regional and
operational objectives.
The on-target annual bonus
parameters for the CEO, CFO and
executive vice-presidents are set out
below.
Target earning potential
as % of guaranteed
remuneration
Bonus cap (stretch
earning potential) as % of
guaranteed remuneration
65
60
55
130
120
110
Role
CEO
CFO
Executive
vice-presidents
The bonus parameter objectives will be based on the drivers below and support
the Group scorecard as reflected above. Other elements of the Group
scorecard, not described below, are captured in the personal scorecards.
Group scorecard parameters
Safety
Total gold production
All-in Cost (AIC) per ounce
Development or waste mined
20%
20%
40%
20%
133
The Gold Fields Integrated Annual Report 2015 6.3 People – remuneration and benefits (continued)
The CEO’s 2016 annual performance bonus is made up of the bonus parameter objectives (65%) as stated in the table on
the previous page and personal performance objectives (35%) as stated in the table below:
2016 performance scorecard for Gold Fields CEO Nick Holland
Objective
1. Group free cash flow
Weighting
10%
2. South Deep cash flow
3. South Deep rebase plan
4. Portfolio decisions on Damang and Darlot
5. Technology and innovation
6. Improve the quality of assets in the Gold Fields
portfolio
15%
25%
20%
10%
20%
Measurement
Deliver free cash flow margin of 5% based on a gold price
of US$1,100/oz and exchange rates of A$0.73/US$ and
R14.14/US$
Cash breakeven by year-end
Conclude the rebase life-of-mine plan
Decision on Darlot and Damang
Technology and innovation strategy approved
Grow mineable resources that maintain growth in FCF/oz
and average reserve life per operation, through a
combination of brownfields exploration and portfolio
management (acquisition, joint venture and/or disposal)
Individual performance targets
The CEO and CFO were also
assessed on individual, strategic
objectives (the CEO’s performance
scorecard is included in full in the
Remuneration Report).
The CEO received a personal
performance score of 4.2 out of
5 and the CFO received a personal
performance score of 4.5 out of 53.
The aggregate bonus paid to
members of the executive team in
February 2016 was 109% of annual
salary. For the CEO it was 111%¹
and the CFO 106%² of annual salary.
1 CEO bonus = (65% x 170%) + (35% x
172%) x 65% = 111%
2 CFO bonus = (65% x 170%) + (35% x
190%) x 60% = 106%
3 Gets converted into a percentage with
3 = 100% and 5 = 200%. 4.2 = 172%,
4.5 = 190%
Long-term incentives
The Company operates a Long-term
Incentive Plan (LTIP) designed to
encourage senior and key employees
to identify closely with the long-term
objectives of Gold Fields and allow
them to participate in the future
financial success of the Company.
In particular the LTIP is designed to:
❯ reward key senior managers for
their performance and contribution
to long-term sustainable financial
results that drive shareholder
value; and
❯ increase the alignment of
executives and shareholders with
the future growth and profitability
of Gold Fields.
During 2015 the long-term incentives
were governed by the 2014 LTIP –
the salient features of this plan are:
❯ The LTIP is a three-year
performance plan.
❯ Each performance cycle starts on
1 January of the first year and
ends on 31 December of the
third year.
❯ Annual awards will be made to
eligible participants.
❯ Allocations will be based on the
formula: Annual salary x applicable
% by grade x personal
performance.
❯ Vesting will be based on two
corporate performance conditions
equally being met:
• Free cash flow margin 50%
weighted
• Total shareholder return 50%
weighted
Threshold must be achieved for
pay-out of any portion of the award
to be triggered.
The Gold Fields Limited 2014 LTIP is
set to be replaced with the revised
Gold Fields Limited 2012 Share Plan,
which requires shareholder approval
at the 2016 Annual General Meeting.
On approval of the changes to the
revised 2012 Share Plan, no new
awards will be made under the 2014
LTIP. In the event that the 2012
Share Plan is not approved, annual
long-term incentives will revert to the
terms of the 2014 LTIP, with revised
corporate performance conditions.
Minimum shareholding
requirement for executives
In line with best practice and in
response to shareholder input, the
Company has adopted a Minimum
Shareholding Requirement policy
that will become mandatory for
executives. The policy requires
executives to hold a specific
percentage of shares in the
Company. The proposed target
shareholdings of vested and
unencumbered shares for the
relevant executives is:
❯ CEO: 200% of annual Guaranteed
Remuneration Package (GRP); and
❯ CFO and other executives: 100%
of annual GRP
134
The Gold Fields Integrated Annual Report 2015 The table below provides details of the remuneration of executive directors and prescribed officers in 2015, in terms
of US Dollar values. An average exchange rate for the 12-month period ended 31 December 2015 was used:
i.e. US$1 = R12.68 to convert to US Dollar values.
Non-executive directors’ fees and executive directors’ and prescribed officers’ remuneration
The directors and prescribed officers were paid the following remuneration (US$ terms) for the year ended 31 December 2015:
Fees and remuneration in US Dollars
Board fees
Directors’
fees
Committee
fees
Salary¹
Pension
scheme
contri-
bution
Annual
bonus² Sundry
Subtotal
Total
realised
earnings
for the
12-month
period
ended
31 December
2015³
Pre-tax
share
proceeds
for shares
awarded in
previous
years
For the
12-month
period
ended
31 December
2014
–
–
–
–
–
–
–
–
–
–
–
–
–
–
203.8
66.9
66.9
66.9
66.9
66.9
66.9
–
–
935.7
512.2
145.3
618.910
58.4
616.5
–
–
1,699.8
1,187.0
1,132.5
568.2
–
–
–
–
–
–
–
–
–
–
–
–
–
43.3
33.8
46.4
52.6
46.4
18.9
622.4
688.9
560.9
283.0
347.1
307.7
265.2
412.8
210.6
–
158.5
64.5
53.1
38.4
33.8
65.3
45.0
23.4
425.7
572.0
482.0
306.9
379.3
322.1
322.4
423.5
208.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
414.8
298.8
–
–
–
–
–
1,463.0
1,718.2
1,107.4
643.0
764.8
663.6
652.9
197.2
1,078.5
–
–
–
–
–
–
–
–
–
–
–
442.5
–
–
–
203.8
110.2
100.8
113.3
119.5
113.3
85.8
109.4
220.5
688.6
221.4
207.7
175.4
106.6
–
–
–
–
–
–
–
–
–
–
–
–
2,832.4
1,755.3
1,572.4
1,938.7
1,796.0
864.4
972.6
839.0
759.6
1,078.5
442.5
–
–
–
203.8
110.2
100.8
113.3
119.5
113.3
85.8
2,603.5
1,602.7
1,970.4
1,889.2
1,506.5
726.6
851.3
807.1
673.8
403.6
–
1,034.4
510.7
727.1
232.3
125.6
114.9
127.5
136.2
129.2
97.8
605.3
241.4
5,146.5
685.7
4,677.9
910.8
12,267.6
3,430.5
15,698.1
16,270.4
All figures stated in
US$’000
Executive directors
Nicholas J Holland
Paul A Schmidt
Prescribed officers
Ernesto Balarezo4
Alfred Baku5
Richard Weston
Naseem A Chohan
Brett Mattison
Lee-Ann Samuel
Taryn Harmse
Nico Muller6
Avishkar Nagaser7
Willie Jacobsz8
Michael D Fleischer9
Kgabo FL Moabelo9
Non-executive directors
Cheryl A Carolus
Alan R Hill
David N Murray
Richard P Menell
Gayle M Wilson
Donald MJ Ncube
Kofi Ansah
Total
Average exchange rates were US$1 = R12.68 for FY2015 and R10.82 for FY2014 respectively
¹ The total US$ amounts paid for 2015, and included under salary, were as follows: Nick Holland US$356,000, Paul Schmidt US$100,000
² The annual bonus accruals for the 12-month period ended 31 December 2015, paid in February 2016
³ These amounts reflect the full directors’ emoluments for comparative purposes. The portion of executive directors’ emoluments payable in
USD is paid in terms of agreements with the offshore subsidiaries for work done by directors offshore for offshore companies. The total
realised earnings for 2015 for Nick Holland in ZAR = R35,914,615 and for Paul Schmidt = R22,256,668
4 Ernesto Balarezo – Sundry payment relates to legislated bonuses
5 Sundry payment for Alfred Baku relates to relocation/leave allowance and encashment of excess leave
6 Nico Muller – Sundry payment relates to pro rata sign-on bonus
7 Avishkar Nagaser – Appointed on 1 January 2015
8 Willie Jacobsz – Prescribed officer until 31 December 2014
9 Michael Fleischer and Kgabo Moabelo – Resigned during 2014
10 Nick Holland elected, prior to the determination of the annual performance bonus for FY2015 and in line with the Rules of the Minimum
Shareholding Requirement Policy, to convert 50% of his cash bonus into Gold Fields Shares (US$618,900) which will be held in escrow for
a five-year restricted period.
135
The Gold Fields Integrated Annual Report 2015
6.3 People – remuneration and benefits (continued)
The directors and prescribed officers were paid the following remuneration (Rand terms) for the year ended 31 December 2015:
Fees and remuneration in Rands
Board fees
Directors’
fees
Committee
fees
Salary¹
Pension
scheme
contri-
bution
Annual
bonus² Sundry7 Subtotal
Total
realised
earnings
for the
12-month
period
ended
31 December
Pre-tax
share
proceeds
for shares
awarded in
previous
years11
2015³
For the
12-month
period
ended
31 December
2014
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,584.1
848.5
848.5
848.5
848.5
848.5
848.5
– 11,864.8
–
6,494.2
1,841.9
740.1
7,847.410
7,817.4
–
–
21,554.1
15,051.7
14,360.6
7,205.0
–
–
–
–
–
–
–
–
–
–
–
–
–
548.9
429.1
588.5
666.6
588.5
239.7
7,892.6
8,735.5
7,112.1
3,588.2
4,401.3
3,901.1
3,362.5
5,234.5
2,670.8
–
–
–
–
–
–
–
–
–
–
–
2,009.3
817.9
673.3
487.1
429.2
828.3
570.8
296.7
–
5,398.3
7,252.8
6,112.1
3,891.9
4,809.8
4,084.0
4,088.3
5,370.4
2,643.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,260.0
18,550.9
3,789.0
21,786.5
–
–
–
–
–
14,042.1
8,153.4
9,698.2
8,414.3
8,279.1
2,500.0
13,675.8
–
–
–
–
–
–
–
–
–
–
–
5,610.8
–
–
–
2,584.1
1,397.4
1,277.6
1,437.0
1,515.1
1,437.0
1,088.2
1,387.2
2,795.7
8,731.8
2,807.5
2,634.0
2,224.3
1,352.2
–
–
–
–
–
–
–
–
–
–
–
–
35,914.6
22,256.7
19,938.1
24,582.2
22,773.9
10,961.0
12,332.2
10,638.5
9,631.3
13,675.8
5,610.8
–
–
–
2,584.1
1,397.4
1,277.6
1,437.0
1,515.1
1,437.0
1,088.2
28,169.4
17,341.7
21,319.2
20,440.5
16,296.9
7,861.1
9,212.1
8,732.3
7,290.7
4,366.3
–
11,191.9
5,525.6
7,867.3
2,513.6
1,359.3
1,242.8
1,379.2
1,473.8
1,397.9
1,058.5
7,675.1
3,061.3
65,257.5
8,694.6
59,315.7
11,549.0 155,553.1
43,498.2
199,051.3
176,040.1
All figures stated in
R’000
Executive directors
Nicholas J Holland
Paul A Schmidt
Prescribed officers
Ernesto Balarezo4
Alfred Baku5
Richard Weston
Naseem A Chohan
Brett Mattison
Lee-Ann Samuel
Taryn Harmse
Nico Muller6
Avishkar Nagaser7
Willie Jacobsz8
Michael D Fleischer9
Kgabo FL Moabelo9
Non-executive directors
Cheryl A Carolus
Alan R Hill
David N Murray
Richard P Menell
Gayle M Wilson
Donald MJ Ncube
Kofi Ansah
Total
Average exchange rates were US$1 = R12.68 for the FY2015 and US$1 = R10.82 for the FY2014 respectively
¹ The total US$ amounts paid for 2015, and included in Salary, were as follows: Nick Holland US$356,000, Paul Schmidt US$100,000
² The annual bonus accruals for the 12 month period ended 31 December 2015, paid in February 2016
³ These amounts reflect the full directors’ emoluments for comparative purposes. The portion of executive directors’ emoluments payable in
US$ is paid in terms of agreements with the offshore subsidiaries for work done by directors’ offshore for offshore companies
4 Ernesto Balarezo – sundry payment relates to legislated bonuses
5 Alfred Baku – sundry payment relates to relocation / leave allowance and encashment of excess leave
6 Nico Muller – sundry payment relates to pro rata sign-on bonus
7 Avishkar Nagaser – appointed on 1 January 2015
8 Willie Jacobsz – Prescribed Officer until 31 December 2014
9 Michael Fleischer and Kgabo Moabelo – resigned during 2014
10 Nick Holland elected, prior to the determination of the annual performance bonus for FY2015 and in line with the Rules of the Minimum
Shareholding Requirement Policy, to convert 50% of his cash bonus into Gold Fields Shares (R7,847,652) which will be held in escrow for
a five-year restricted period
136
The Gold Fields Integrated Annual Report 2015
7
Assurance
7.1 First party: Internal Audit statement
p138
7.2
Independent Assurance Provider’s Report to
the Directors of Gold Fields Limited
p139
7.3 Key sustainability performance data
p143
❯ Development work on Lake Lefroy at St Ives
137
The Gold Fields Integrated Annual Report 2015 7.1 First party: Internal Audit
statement
Gold Fields Internal Audit (GFIA) is an
independent assurance provider to
the Gold Fields Audit Committee
onthe 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 is
approved by the Audit Committee
annually.
Internal audit activities are conducted
in terms of the annually approved
mandate provided by the Audit
Committee and executed either by a
team of appropriate, qualified and
experienced internal auditors, or
through the engagement of external
practitioners on specified and agreed
terms. The Internal Audit team is
based in South Africa and services
all the Gold Fields operations
globally. The Vice-President and
Group Head of Internal Audit
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) and the 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.
Based on the work performed by
GFIA during the year, the Vice-
President and Group Head of Internal
Audit have presented the Audit
Committee with an assessment of
the effectiveness of the Company’s
systems 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 Field
business and provide reasonable
assurance that the objectives of Gold
Fields will be met. This GFIA
assessment forms one of the bases
of the Audit Committee’s
recommendation in this regard to the
Board.
Shyam Jagwanth
Vice-President and Group Head of
Internal Audit
Johannesburg
South Africa
22 March 2016
138
The Gold Fields Integrated Annual Report 2015 7.2 Independent Assurance Provider’s
Report to the Directors of Gold
Fields Limited
Report on Selected Sustainability Performance Information
We have undertaken an assurance engagement on selected sustainability performance information, as described below, and
presented in the Integrated Annual Report of Gold Fields Limited (Gold Fields) for the year ended 31 December 2015 (the
Report). This engagement was conducted by a multi-disciplinary team of health, safety, social, environmental and assurance
specialists with extensive experience in sustainability reporting.
Subject matter (presented in compliance with subject matter 4 of the International Council of Mining and Metals’ (ICMM)
Sustainable Development Framework: Assurance Procedure).
We are required to provide reasonable assurance on the selected sustainability performance information set out in the table
below. The selected sustainability performance information described below has been prepared in accordance with Gold
Fields’ reporting criteria that accompanies the selected sustainability performance information on pages 143 to 146 (the
accompanying Gold Fields reporting criteria).
Reasonable Assurance (RA)
Unit
Environment
Total CO2 equivalent emissions, Scope 1 – 3
Total energy consumed (GJ)/ounce of gold produced
Tonnes CO2e
Total GJ of energy consumed per ounce of gold produced
Total energy consumed (GJ)/total tonnes mined
Total GJ of energy consumed per tonne mined
Number of environmental incidents – Level 3 and above
Number
Electricity
Diesel
Total water withdrawal
Total water recycled/re-used per annum
Water intensity
Health
Number of cases of silicosis reported
MWh
kℓ
mℓ
mℓ
kℓ withdrawn per ounce of gold produced
Number of cases
Number of cases of noise induced hearing loss reported
Number of cases
Number of new cases of cardio respiratory tuberculosis
reported
Number of new cases
Number of cases of malaria tested positive per annum
Number of positive cases
Number of South African and West African employees in the
highly active anti-retroviral therapy (HAART) programme
Percentage of South African and West African workforce on
the voluntary counselling and testing (VCT) programme
Number of employees
Percentage of workforce
Safety
Total recordable injury frequency rate (TRIFR)
Number of fatalities
Rate
Number
Social
Total socio economic development (SED) spend in US dollars US Dollars
139
The Gold Fields Integrated Annual Report 2015 7.2 independent Assurance Provider’s report to the Directors of Gold
Fields Limited (continued)
Reasonable Assurance (RA)
Unit
Mining Charter
Percentage historically disadvantaged South Africans (HDSA)
in management who are classified as designated groups and
who are employed at management levels (top management
(Board), senior, middle, junior, core skills and total), including
and excluding corporate and including and excluding white
females
Top management %
Senior %
Middle %
Junior %
Core %
Total %
Number of houses built as part of home ownership scheme
Number of houses
Maintenance of the conversion rate of hostels to ensure an
occupancy rate of one person per room
Number of people per room
Percentage conversion of hostels to family units
Human Resource Development (HRD) Expenditure as a
percentage of total annual payroll (excluding mandatory
skills levy)
Percentage
Percentage
Number of bursaries/scholarships provided
Number of bursars/scholars
Research and Development initiatives supported (total
number, percentage of South African Institutions in the total
and expenditure)
Rand value spent on Local Economic Development (LED)
projects in the SLP in the current reporting year
Number
Percentage
Rand value
Rand value
Total procurement spend from BEE entities (BBSEEC, 2010)
Rand value
Procurement spend from BEE entities (in line with the Mining
Charter categories of capital goods, services & consumable
goods)
% Capital goods
% Services
% Consumable goods
Annual spend on procurement from multi-national suppliers:
Contribution to the social fund
Percentage of samples sent to South African facilities
Implementation of approved Environmental Management
Plans (EMPs) (defined as per the categories contained in the
on-line Mining Charter submission template to the DMR)
Implementation of the tripartite action plan on health and
safety (defined as per the categories contained in the on-line
Mining Charter submission template to the DMR)
Percentage
Percentage
Percentage
Percentage
140
The Gold Fields Integrated Annual Report 2015 Directors’ responsibilities
The Directors are responsible for
the selection, preparation and
presentation of the selected
sustainability performance
information in accordance with the
accompanying Gold Fields reporting
criteria. This responsibility includes
the identification of stakeholders and
stakeholders’ requirements, material
issues, for commitments with
respect to sustainability performance
and for the design, implementation
and maintenance of internal control
relevant to the preparation of the
Report that is free from material
misstatement, whether due to fraud
or error.
Our independence and quality
control
We have complied with the Code of
Ethics for Professional Accountants
issued by the International Ethics
Standards Board for Accountants,
which includes independence and
other requirements founded on
fundamental principles of integrity,
objectivity, professional competence
and due care, confidentiality and
professional behaviour.
KPMG Services Proprietary Limited
applies the International Standard on
Quality Control 1 and accordingly
maintains a comprehensive system
of quality control, including
documented policies and procedures
regarding compliance with ethical
requirements, professional standards
and applicable legal and regulatory
requirements.
Our responsibility
Our responsibility is to express an
opinion on the selected sustainability
performance information based on
the evidence we have obtained.
We have conducted our engagement
in accordance with the International
Standard on Assurance
Engagements (ISAE) 3000 (Revised),
Assurance Engagements Other than
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
reasonable assurance about whether
the selected sustainability
performance information is free from
material misstatement.
A reasonable assurance engagement
in accordance with ISAE 3000
involves performing procedures to
obtain evidence about the
quantification of the selected
sustainability performance
information and related disclosures.
The nature, timing and extent of
procedures selected depend on the
practitioner’s judgement, including
the assessment of the risks of
material misstatement, whether due
to fraud or error. In making those risk
assessments we considered internal
control relevant to Gold Fields’
preparation of the selected
sustainability performance
information. A reasonable assurance
engagement also includes:
❯ Assessing the suitability in the
circumstances of Gold Fields’ use
of the accompanying Gold Field
Reporting criteria as the basis for
preparing the selected
sustainability performance
information;
❯ Evaluating the appropriateness
of quantification methods and
reporting policies and internal
guidelines used, and the
reasonableness of estimates made
by Gold Fields; and
❯ Evaluating the overall presentation
of the selected sustainability
performance information and
whether the information presented
in the Report is consistent with our
findings, overall knowledge and
experience of sustainability
management and performance at
Gold Fields.
Our work included the following
evidence-gathering procedures:
❯ Interviewing management and
senior executives to obtain an
understanding of the internal
control environment, risk
assessment process and
information systems relevant to the
sustainability reporting process.
Inspecting documentation to
corroborate the statements of
management and senior
executives in our interviews.
❯ Testing the processes and systems
to generate, collate, aggregate,
monitor and report the selected
sustainability performance
information.
❯ Inspecting supporting
documentation and performing
analytical procedures on a sample
basis to evaluate the data
generation and reporting
processes against the reporting
criteria.
❯ Undertaking physical site visits to
Gold Fields’ South Deep, Tarkwa
and Damang operations and
remote reviews of the Granny
Smith, St Ives, Agnew/Lawlers,
Darlot, and Cerro Corona
operations.
We believe that the evidence we
have obtained is sufficient and
appropriate to provide a basis for our
opinion.
Opinion
In our opinion, the selected
sustainability performance
information set out in the subject
matter paragraph for the year ended
31 December 2015 is prepared, in all
material respects, in accordance with
the accompanying Gold Fields
reporting criteria.
Comparability
Our report includes the provision of
assurance on the Research and
Development initiatives supported
(Total Number, Percentage of South
African Institutions in the total and
Expenditure), Annual spend on
procurement from multi-national
suppliers: Contribution to the social
fund (percentage), Implementation of
Approved EMP’s (percentage),
Implementation of the tripartite action
plan on health and safety
(percentage), and Total Energy
Consumed (GJ)/Total Tonnes mined.
141
The Gold Fields Integrated Annual Report 2015 7.2 independent Assurance Provider’s report to the Directors of Gold
Fields Limited (continued)
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 Proprietary
Limited
Per PD Naidoo
Director
Per C Basson
Director
22 March 2016
22 March 2016
KPMG Crescent
85 Empire Road
Parktown
Johannesburg
2193
We were previously not required to
provide assurance on this selected
sustainability performance
information.
Report on the ICMM
assurance procedure
We are required to report our findings
on the International Council of Mining
and Metals’ (ICMM) Sustainable
Development (SD) Framework:
Assurance Procedure (ICMM
Assurance Procedure) in respect of:
❯ The alignment of Gold Fields’
sustainability policies to the ICMM
10 SD Principles and any
mandatory requirements set out in
ICMM Position Statements (ICMM
Subject Matter 1).
❯ 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).
❯ 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.
❯ The implementation of systems
and approaches that Gold Fields is
using to manage its material safety
risks and opportunities.
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
142
assurance engagement on the
selected sustainability performance
information set out in the subject
matter paragraph in our ‘Report on
Selected Sustainability Information’
on pages 139 and 140.
Findings
Based on our evidence gathering
procedures in our assurance
engagement for the year ended
31 December 2015 on the subject
matter set out in our ‘Report on
Selected Sustainability Information’
139 and 140, nothing has come to
our attention that causes us to
believe that:
❯ Gold Fields’ sustainability policies
are not aligned with the ICMM
10 SD Principles and any
mandatory requirements set out in
ICMM Position Statements.
❯ 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.
❯ Gold Fields has not implemented
systems and approaches to
manage its material safety risks
and opportunities.
Other matters
The maintenance and integrity of the
Gold Fields website is the
responsibility of Gold Fields
management. Our procedures did
not involve consideration of these
matters and, accordingly we accept
no responsibility for any changes to
either the information in the Report
or our independent assurance report
that may have occurred since the
initial date of presentation on the
Gold Fields website.
Restriction of liability
Our work has been undertaken to
enable us to express the opinions on
the sustainability performance
information set out in the subject
matter paragraph in our ‘Report on
Selected Sustainability performance
Information’ together with findings on
1, 2 and 3 in our ‘Report on the
The Gold Fields Integrated Annual Report 2015 7.3 Key sustainability performance
data
The following key sustainability performance information was selected by Gold Fields, for assurance by KPMG in 2015 which
have been reported in accordance with the criteria listed in the table below.
Parameter
Level of
assurance
Management figure
Selected sustainability performance information presented in accordance with Subject Matter 4 of the International
Council of Mining and Metals’ (ICMM) Sustainable Development Framework: Assurance Procedure (ICMM
Assurance Procedure), and prepared in accordance with the Global Reporting Initiative (GRI) G4 Guidelines as well
as Gold fields own internal Guidelines:
Environment
Total CO2 equivalent emissions, scope 1– 3 (in tonnes)
Reasonable
1 753 163 tonnes
Electricity (MWh)
Reasonable
1 322 353 MWh
Number of environmental incidents – Level 3 and above
Reasonable
5 incidents
Total water withdrawal (mℓ)
Diesel (kℓ)
Reasonable
35 247 mℓ
Reasonable
192 517 kℓ
Total water recycled/re-used per annum (mℓ)
Reasonable
43 120 mℓ
Water intensity (kℓ withdrawn per ounce of gold produced)
Reasonable
35 247 100 kl/2 235 560 = 15.77
Total energy consumed (GJ)/total tonnes mined
Reasonable
11 240 369/165 787 013 = 0.07
Total energy consumed (GJ)/ounce of gold produced
Reasonable
11 240 369/2 235 560 = 5.02
Health
Number of cases of silicosis reported
Reasonable
9 cases
Number of cases of noise induced hearing loss reported
Reasonable
6 cases
Cardio respiratory tuberculosis (number of new cases reported)
Reasonable
36 cases
Number of cases of malaria tested positive per annum
Reasonable
532 positive cases
Number of South African and West African employees in the
HAART programme (cumulative)
Reasonable
315
Percentage of South African and West African workforce on the
voluntary counselling and testing (VCT) programme
Reasonable
4 675 people on VCT/12 600
people = 37%
143
The Gold Fields Integrated Annual Report 2015 7.3 Key sustainability performance data (continued)
Parameter
Safety
TRIFR1
Number of fatalities
Social
Level of
assurance
Management figure
Reasonable
174 TRIs/51 198 901 man hours =
3.40
Reasonable
32
Total socio-economic development (SED) spend in US Dollars3
Reasonable
US$13 655 549
1 Per million hours worked, including employees and contractors
2 In addition to the three mining related fatalities, on 7 August 2015 a G4S Security Services Contractor, Sbongiseni Cornwell Ngqoleka, was
tragically killed during what appears to have been an armed robbery targeting copper cable at South Deep Mine.
3 Our SED definition has been aligned to the World Gold Council definition, which excludes employee-related SED spend, and includes the
SED spend from the South Deep Education and Community Trusts as well as the Community Westonaria Trust.
Parameter
Level of
assurance
Management figure
The following key sustainability performance information was selected by Gold Fields, for assurance by KPMG in
2015, which have been reported in accordance with the following criteria: 1) Selected Mining Charter elements
prepared in compliance with the Broad-Based Socio-Economic Empowerment Charter for the South African
Mining and Minerals Industry (BBSEEC) (2002) and related Scorecard (2004); and 2) Selected Mining Charter
elements prepared in compliance with the Amendment to the BBSEEC (2010) and related scorecard (2010) for the
South African Mining and Minerals Industry.
Reasonable
Mining Charter
Employment Equity
Percentage HDSA in management4
who are classified as designated
groups and who are employed at
management levels: top management
(Board), senior, middle, junior, core
skills and total. Core skills include A,
B and C graded employees in the
miner and artisan categories as well
as officials that are deemed to have
core skills in mining
Including corporate and
including white females
Top: 42%5
Senior: 47%
Middle: 60%
Junior: 56%
Core: 69%
Total: 67%
Excluding corporate and
excluding white females
Top: 50%
Senior: 40%6
Middle: 51%
Junior: 51%
Core: 67%
Total: 66%
Excluding corporate and
including white females7
Top: 50%
Senior: 50%6
Middle: 57%
Junior: 54%
Core: 70%
Total: 69%
Including corporate and
excluding white females
Top: 33%8
Senior: 35%
Middle: 45%
Junior: 50%
Core: 66%
Total: 64%
4 Excludes contractors.
5 Includes the Gold Fields Ltd and South Deep Joint Venture Board members.
6 Includes both SA Regional ExCo (RexCo) members and the South Deep mine executive members (ExCo).
7 Reportable in terms of the BBSEEC (2010).
8 Includes the Gold Fields Ltd and South Deep Joint Venture Board members.
144
The Gold Fields Integrated Annual Report 2015 Parameter
Level of
assurance
Management figure
Housing and Living Conditions
Maintenance of the conversion rate of
hostels to ensure an occupancy rate
of 1 person per room
Number of houses built as part of
home ownership scheme
% conversion of hostels into
family units
Reasonable
1 person per room
Reasonable
09
Reasonable
100%
9 The Home Ownership Scheme embraces facilitating access to accommodation for our employees. Construction of 150 houses is
progressing well and will be completed by end Q2 2016. South Deep owns 258 houses and purchased 198 from Sibanye in 2014
(transfer still in progress) and 489 have been rented from third parties by Gold Fields for our employees. The mine will make available
102 of the South Deep owned houses during Q2 2016, to be sold to employees. Furthermore, South Deep’s compliance with the Mining
Charter Scorecard element for ‘Housing and Living Conditions’, ensured the conversion of hostels to one occupant per room and
created availability of 203 family units in 2014.
Skills and Development
HRD expenditure as a percentage of
total annual payroll (excluding
mandatory skills development levy)
Number of bursaries/scholarships
provided
Research and development initiatives
supported (total number, percentage
of South Africa institutions in the total
and expenditure)
Local Economic Development
Rand value spent on LED projects in
the SLP in the current reporting year
Procurement and Enterprise
Development
Procurement spend from BEE entities
(in line with the mining charter
categories of capital goods, services
& consumable goods)
Total procurement spend from BEE
entities (BBSEEC, 2010)
Reasonable
10.50%
Reasonable
21
010
Reasonable
R3 160 657
Reasonable
Capital goods: 87.7%
Services: 78.6%
Consumable goods: 84.0%
Reasonable
Total procurement spend:
R1 993 284 157
BEE procurement spend:
R1 667 868 613
011
Annual spend on procurement from
multi-national suppliers: Contribution
to the social fund
Reasonable
10 There were no reportable Research and Development Initiatives supported during 2015.
11 There remains an industry-wide lack of clarity on this requirement in the absence of guidance from the DMR. Although no annual spend,
in terms of multi-national’s contributions to a social fund is reportable, South Deep has commenced and implemented several projects
in 2015 focused on enhancing host community procurement, employment and skills development.
145
The Gold Fields Integrated Annual Report 2015 7.3 Key sustainability performance data (continued)
Parameter
Level of
assurance
Management figure
Sustainable Development
and Growth
Percentage % of samples in South
African facilities
Implementation of approved EMP’s
(defined as per the categories
contained in the on-line Mining
Charter submission template to the
DMR)
Implementation of the tripartite action
plan (TAP) on health and safety
(defined as per the categories
contained in the on-line Mining
Charter submission template to
the DMR)
Reasonable
100%
Reasonable
100%
Reasonable
69%12
12 100% implementation was achieved on three of the five pillars of the TAP. Further work is being undertaken on the remaining two pillars:
training of occupational health and safety representatives as well as implementing the cultural transformation framework standards
in 2016.
146
The Gold Fields Integrated Annual Report 2015 Administration and corporate
information
COMPANY SECRETARY
Lucy Mokoka
Tel:
Fax:
email:
+27 11 562 9719
+27 11 562 9829
lucy.mokoka@goldfields.co.za
REGISTERED OFFICE
Johannesburg
Gold Fields Limited
150 Helen Road
Sandown
Sandton, 2196
Postnet Suite 252
Private Bag X30500
Houghton, 2041
Tel:
Fax:
+27 11 562 9700
+27 11 562 9829
OFFICE OF THE UNITED KINGDOM SECRETARIES
London
St James Corporate Services Limited
Suite 31, Second Floor
107 Cheapside
London EC2V 6DN United Kingdom
+44 20 7796 8644
Tel:
+44 20 7796 8645
Fax:
AMERICAN DEPOSITORY RECEIPTS TRANSFER
AGENT
Bank of New York Mellon
BNY Mellon Shareowner Services
P O Box 358516
Pittsburgh, PA15252-8516
US toll-free telephone: +1 888 269 2377
+1 201 680 6825
Tel:
shrrelations@bnymellon.com
email:
GOLD FIELDS LIMITED
Incorporated in the Republic of South Africa
Registration number 1968/004880/06
Share code: GFI
Issuer code: GOGOF
ISIN – ZAE 000018123
WEBSITE
www.goldfields.com
LISTINGS
JSE/NYSE/GFI
SWX: GOLI
INvESTOR ENQUIRIES
Avishkar Nagaser
Tel:
+27 11 562 9775
Mobile: +27 82 312 8692
email: avishkar.nagaser@goldfields.co.za
MEDIA ENQUIRIES
Sven Lunsche
Tel:
+27 11 562 9763
Mobile: +27 83 260 9279
email: sven.lunsche@goldfields.co.za
TRANSFER SECRETARIES
South Africa
Computershare Investor Services (Proprietary) Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
PO Box 61051
Marshalltown, 2107
Tel:
Fax:
+27 11 370 5000
+27 11 688 5248
United Kingdom
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham Kent BR3 4TUEngland
Tel:
0871 664 0300
[calls cost 10p a minute plus network extras,
lines are open 08h30 – 17h00 Mon-Fri] or [from overseas]
+44 20 8639 3399
Fax:
+44 20 8658 3430
email: ssd@capitaregistrars.com
SPONSOR
JP Morgan Equities South Africa (Pty) Ltd
DIRECTORS
CA Carolus (Chair) ° RP Menell (Deputy Chair) °
NJ Holland *• (Chief Executive Officer)
PA Schmidt • (Chief Financial Officer) K Ansah #
AR Hill ≠° DN Murray ° DMJ Ncube ° SP Reid ^ GM Wilson °
^ Australian * British # Ghanaian ≠ Canadian
° Independent Director • Non-independent Director
147
The Gold Fields Integrated Annual Report 2015
Forward looking statements
This report contains forward looking statements within the meaning of section 27A of the U.S. Securities Act of 1933, as amended, or the
Securities Act, and section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to Gold Fields’
financial condition, results of operations, business strategies, operating efficiencies, competitive position, growth opportunities for existing
services, plans and objectives of management, markets for stock and other matters.
These forward looking statements, including, among others, those relating to the future business prospects, revenues and income of Gold
Fields, wherever they may occur in this report and the exhibits to the report, are necessarily estimates reflecting the best judgement of the
senior management of Gold Fields and involve a number of risks and uncertainties that could cause actual results to differ materially from
those suggested by the forward looking statements. As a consequence, these forward looking statements should be considered in light of
various important factors, including those set forth in this report. Important factors that could cause actual results to differ materially from
estimates or projections contained in the forward looking statements include, without limitation:
❯ overall economic and business conditions in South Africa, Ghana, Australia, Peru and elsewhere;
❯ changes in assumptions underlying Gold Fields’ mineral reserve estimates;
❯ the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions;
❯ the ability to achieve anticipated cost savings at existing operations;
❯ the success of the Group’s business strategy, development activities and other initiatives;
❯ the ability of the Group to comply with requirements that it operate in a sustainable manner and provide benefits to affected communities;
❯ decreases in the market price of gold or copper;
❯ the occurrence of hazards associated with underground and surface gold mining or contagious diseases at Gold Field’s operations;
❯ the occurrence of work stoppages related to health and safety incidents;
❯ loss of senior management or inability to hire or retain employees;
❯ fluctuations in exchange rates, currency devaluations and other macroeconomic monetary policies;
❯ the occurrence of labour disruptions and industrial actions;
❯ power cost increases as well as power stoppages, fluctuations and usage constraints;
❯ supply chain shortages and increases in the prices of production imports;
❯ the ability to manage and maintain access to current and future sources of liquidity, capital and credit, including the terms and conditions
of Gold Fields’ facilities and Gold Fields’ overall cost of funding;
❯ the adequacy of the Group’s insurance coverage;
❯ the manner, amount and timing of capital expenditures made by Gold Fields on both existing and new mines, mining projects, exploration
project or other initiatives;
❯ changes in relevant government regulations, particularly labour, environmental, tax, royalty, health and safety, water, regulations and
potential new legislation affecting mining and mineral rights;
❯ fraud, bribery or corruption at Gold Field’s operations that leads to censure, penalties or negative reputational impacts; and
❯ political instability in South Africa, Ghana, Peru or regionally in Africa or South America.
Gold Fields 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 report or to reflect the occurrence of unanticipated events.
148
The Gold Fields Integrated Annual Report 2015
BASTiON GrAPHiCS
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