Gold Fields Annual Report 2017

Plain-text annual report

G o l d F i e l d s I n t e g r a t e d A n n u a l R e p o r t f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 7 2017 INTEGRATED ANNUAL REPORT The Gold Fields Integrated Annual Report 2017 ABOUT THIS REPORT Gold Fields Limited is a globally diversified gold producer with seven operating mines in Australia, Ghana, Peru and South Africa, and a total attributable annual gold-equivalent production of approximately 2.2 million ounces. It has attributable gold Mineral Reserves of around 49 million ounces and gold Mineral Resources of around 104 million ounces. Attributable copper Mineral Reserves total 764 million pounds and Mineral Resources 4,881 million pounds. Gold Fields has a primary listing on the Johannesburg Stock Exchange (JSE) Limited, with secondary listings on the New York Stock Exchange (NYSE) and the Swiss Exchange (SIX). Our integrated reporting approach aims to enable our stakeholders to make a more informed assessment of the value of Gold Fields and its prospects. This Integrated Annual Report (IAR) is structured around the Gold Fields Group Balanced Scorecard, which is how we measure our performance against our strategy and the matters we consider to be most material to the sustainability of our Group (p22). The IAR also forms part of our adherence to the Global Reporting Initiative (GRI) Standards and the 10 Principles of the International Council on Mining & Metals (ICMM), whose mandatory requirements of its position statements are presented online. We also align with the 10 Principles of the United Nations Global Compact. Our 2017 full IAR comprises the following reports: PAGE HEADER continued 2017 INTEGRATED ANNUAL REPORT 1. 2017 FINANCIAL ANNUAL REPORT 2. 2017 MINERAL RESOURCES AND MINERAL RESERVES 3. 1. Integrated Annual Report: Our primary report and details of the Group’s value creation story over the short, medium and long term. 2. Annual Financial Report: Our full Corporate Governance Report, Board and Board subcommittee reports, Remuneration Report and our Annual Financial Statements, fulfilling our statutory financial reporting requirements. 3. The Mineral Resource and Mineral Reserve Supplement: Detailed technical and operational information on our mines and growth projects. 4. The Notice of Annual General Meeting: The resolutions to be tabled to shareholders at our Annual General Meeting. 5. GRI Index: Gold Fields’ GRI Content Index for the IAR 2017. Report scope and boundary This report covers the reporting period from 1 January 2017 to 31 December 2017 and provides an overview of our seven operations in Australia, Ghana, Peru and South Africa, as well as our exploration and business development activities. Details on the exact location of each operation and project can be found on p2 and p3. We use an integrated approach to reporting that examines our operational, financial and sustainability performance. All non-financial data for 2013 excludes the Yilgarn South assets we acquired that year, unless otherwise indicated. Non-financial data for 2017 only covers our seven operating mines and excludes exploration activities and projects. Data from Darlot, which was sold, is included for the January to September 2017 period. Cover image: The Invincible Complex at the St Ives mine in Western Australia This report has been compiled in accordance with the GRI Standards and the International Integrated Reporting Council Framework. Gold Fields also references a broad range of additional codes, frameworks and standards in compiling the report, including the King IV Code on Corporate Governance. The full list can be found in the Annual Financial Report (p3). We consider that this IAR, together with additional documents held online, complies with the requirements of the GRI Standards. Average exchange rates for 2017 of R13.33/US$1 and US$0.77/A$1 have been used in this report. For 2018, forecast exchange rates of R12.00/US$1 and US$0.80/A$1 have been used. 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. Refer to the full forward looking statements on www.goldfields.com/disclaimer.php ICMM subject matters Gold Fields has complied with the ICMM Sustainable Development Framework, Principles, Position Statements and Reporting Requirements (see p137 for the assurance hereof). Our compliance with the ICMM is addressed throughout this report and on our website. This detail covers: • The alignment of our sustainable development policies against the 10 principles and mandatory position statements • The process for identifying specific sustainable development risks and opportunities • The existence and implementation of systems and approaches for managing sustainable development risks and opportunities • Gold Fields’ performance across a selection of identified material sustainable development risks and opportunities. Our disclosures in accordance with the GRI Standards can be found at www.goldfields.com/integrated-annual-reports.php Assurance ERM has provided independent reasonable assurance over selected sustainability information in this report, which is prepared in accordance with the GRI Standards. As a member of the ICMM, we are committed to obtaining assurance in line with the ICMM Sustainable Development Framework: Assurance Procedure. ERM has provided assurance over our statement on compliance with the ICMM Sustainable Development Framework, Principles and Reporting Requirements. The key sustainability performance data for assurance by ERM in 2017 can be found on p139 – 140. Board approval The Gold Fields’ Board of Directors acknowledges its responsibility to ensure the integrity of this IAR and has applied its collective mind throughout the preparation of this report. The Board believes that the integrated report is presented in compliance with the International Integrated Reporting Framework. Furthermore, the Board 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 the International Financial Reporting Standards. As such, the Board unanimously approves the content of the IAR 2017, including the Annual Financial Report 2017, and authorised its release on 22 March 2018. Cheryl Carolus Chairperson of the Board 27 March 2018 1 CONTENTS Send us your feedback To ensure that we report on issues that matter to our stakeholders please provide any feedback and questions to: investors@goldfields.com, sustainability@goldfields.com or visit www.goldfields.com to download the feedback form. linkedin.com/company/gold-fields business.facebook.com/GoldFieldsLTD @GoldFields_LTD Please refer to a page within these reports Please refer to our online report at www.goldfields.com s t n e t n o c 1) Our business Our global footprint Our business and value creation model Our operating environment Risks and materiality Value creation and distribution 2) Leadership Vision of the Chairperson CEO Report 3) Safe operational delivery Introduction Operational performance Safety Health Fit-for-purpose workforce Energy management Innovation and technology 4) Capital discipline and financial performance Financial performance Capital discipline 5) Portfolio management Managing our portfolio Life extension through near-mine exploration Mineral Resources and Reserves summary 6) Licence and reputation Overview Environmental stewardship Stakeholder relations Summarised corporate governance Summarised remuneration report 7) Assurance First party: Internal Audit statement Independent assurance statement of Gold Fields Limited Key sustainability performance data Administration and corporate information 2 4 6 8 12 16 19 42 45 50 53 56 61 66 70 75 80 86 88 94 95 105 124 130 136 137 139 IBC United Nations’ Sustainable Development Goals Given our commitment to sustainable development, there is great potential for Gold Fields to make an important and lasting contribution towards the United Nations’ Sustainable Development Goals (SDGs). Gold Fields seeks to work with partners to catalyse lasting social and economic progress that supports an end to poverty, protects the planet and ensures prosperity for all. The following development goals are viewed as critical in the work of the mining and metals sector in particular. Where we believe our work is relevant to achievement of these goals the icons below will appear in this IAR. Good Health and Wellbeing Quality Education Clean Water and Sanitation Affordable and Clean Energy Decent Work and Economic Growth Industry, Innovation and Infrastructure Sustainable Cities and Communities Responsible Consumption and Production Climate Action Life on Land Partnerships for the Goals The Gold Fields Integrated Annual Report 2017Our businessOUR GLOBAL FOOTPRINT Key: l Mines l Corporate office Regional offices l Project 2 Group performance Safety (TRIFR1) 300 250 200 150 100 50 0 (50) 4 0 . 4 0 4 3 . 2 4 2 . 7 2 . 2 14 15 16 17 Gold Fields’ West Africa region consists of two mines in Ghana, Tarkwa and Damang Contribution to Group production Damang Tarkwa £ Accra 32% 12% West Africa region Managed production (Koz) All-in cost (US$/oz) 800 700 600 500 400 300 200 100 0 Safety (TRIFR1) 1.2 1.0 0.8 0.6 0.4 0.2 0 6 3 7 4 5 7 6 1 7 0 1 7 14 15 16 17 2 0 . 1 5 7 . 0 8 6 . 0 0 5 . 0 14 15 16 17 1,200 1,000 800 600 400 200 0 4 9 0 , 1 9 4 0 , 1 0 2 0 , 1 9 1 1 , 1 14 15 16 17 Net cash-flow2 (US$m) 180 9 7 1 150 120 90 60 30 0 3 2 1 0 0 1 4 4 14 15 16 17 South Africa region All-in cost (US$/oz) 2,000 2 3 7 , 1 9 5 5 , 1 0 0 4 , 1 4 3 2 , 1 1,500 1,000 500 0 14 15 16 17 Managed production (Koz) 300 0 9 2 1 8 2 250 200 150 100 50 0 1 0 2 8 9 1 14 15 16 17 Safety (TRIFR1) 5 5 6 . 4 1 9 . 2 1 9 . 2 2 4 . 2 ( 0 (20) (40) (60) (80) (100) 4 3 2 1 0 14 15 16 17 14 15 16 17 Net cash-flow2 (US$m) 20 ) 6 1 1 ) 0 8 ( 2 1 ) 3 4 ( South Deep ll Johannesburg Contribution to Group production The South Deep mine, which is still in a ramp-up phase, is the only operating asset in the South Africa region 1 TRIFR – Total Recordable Injury Frequency Rate Injuries per 1 million hours worked, including employees and contractors 2 Net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments, excluding growth capital 3 The statistics for Australia include Darlot up to the date of its sale on 2 October 2017 4 Group net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments, including growth capital The Gold Fields Integrated Annual Report 20173 Projects Status l Gruyere (Australia) l Far Southeast (Philippines) l Salares Norte (Chile) l Arctic Platinum project (Finland) In development Scoping study Feasibility Sold Group net cash-ﬂow4 (US$m) 300 4 9 2 Americas region Managed production (Au-eq koz) 7 350 2 3 7 0 3 6 9 2 0 7 2 All-in cost (US$/oz) 800 2 0 7 7 7 7 2 6 7 3 7 6 Managed production (Koz) All-in cost (US$/oz) 4 9 2 , 2 6 3 2 , 2 2,500 2,000 1,500 1,000 500 0 9 1 2 , 2 3 3 2 2 , 1,200 1,000 800 600 400 200 0 7 8 0 , 1 6 2 0 , 1 6 0 0 , 1 8 8 0 , 1 14 15 16 17 250 200 150 100 50 0 (50) 5 3 2 3 2 1 14 15 16 ) 2 ( 17 14 15 16 17 300 250 200 150 100 50 0 14 15 16 17 14 15 16 17 Gold Fields’ presence in the Americas region consists of the Cerro Corona mine in Peru and the Salares Norte project in Chile Contribution to Group production Cerro Corona l Lima £ Peru Salares Norte l Chile 14% Safety (TRIFR1) 1.2 9 0 . 1 Net cash-flow2 (US$m) 150 0 5 1 1.0 0.8 0.6 0.4 0.2 0 8 3 . 0 4 3 . 0 9 1 . 0 14 15 16 17 120 90 60 30 0 7 1 1 7 7 5 3 14 15 16 17 Australia region l Far Southeast 1,000 800 600 400 200 0 42% Contribution to Group production Agnew l l Gruyere l l Granny Smith St Ives Perth £ The Australia region consists of three mines – Agnew, Granny Smith and St Ives – the Gruyere project and the Far Southeast project in the Philippines Managed production3 (Koz) 1,200 1 3 0 , 1 8 8 9 2 4 9 5 3 9 All-in cost3 (US$/oz) 1,200 5 1 0 , 1 2 1 9 1 4 9 8 4 9 14 15 16 17 14 15 16 17 Safety3 (TRIFR1) 20 15 10 5 0 4 0 . 7 1 7 2 . 6 1 4 4 . 0 1 3 4 . 9 14 15 16 17 Net cash-ﬂow2,3 (US$m) 300 5 5 2 6 5 2 250 200 150 100 50 0 8 1 2 8 8 1 14 15 16 17 700 600 500 400 300 200 100 0 1,000 800 600 400 200 0 The Gold Fields Integrated Annual Report 2017Our businessOUR BUSINESS AND VALUE CREATION MODEL 4 à BUSINESS ACTIVITIES KEY INPUTS, RESOURCES AND CAPITALS Financial capital • Capital investment framework to prioritise investment in line with strategy • Operational budgets • Selected hedging of exchange rates and commodity prices • Net debt: US$1,303m (end-2017) • Dedicated expenditure (2017): – US$840m capital expenditure – US$217m growth capital – US$623 sustaining capital – US$87m near-mine exploration spending – US$1,837m procurement budget • Ghana Development Agreement Human capital • 8,856 employees; 9,738 contractors (comprising exploration, financial, mining, processing, operational, human resources, legal investor relations, sustainable development expertise) Natural capital • Water withdrawal: 32,985ML • Energy usage: 12,178TJ Intellectual capital • Innovation and technology strategy and implementation • Extensive exploration database on our Australian projects • Geological mapping in partnership with technology companies • Partnerships with Original Equipment Manufacturers (OEMs) for efficient use of machinery and mine vehicles • Identification and implementation of low carbon and renewable energy projects EXPLORATION Near-mine exploration by our operations and selected greenfields exploration, in partnerships with junior miners, ensures that we continually extend the life of our portfolio of assets for long-term sustainability CLOSURE We manage the process of closing our mines in a responsible manner. The life cycle of the mine entails careful environmental management practices, including concurrent rehabilitation, to ensure the least disruption to our natural resources both during operations and post-closure. Furthermore, post-closure social and economic sustainability requires consultation with affected communities during the life-of-mine 6 1 5 Social and relationship capital • Regulatory licences • Social licence to operate from our host- communities • Six Shared Value community investment projects Manufactured capital • Six open pit or shallow underground mechanised operations in Australia, Ghana and Peru • One deep-level, bulk underground mechanised operation in South Africa • Two development projects • Seven Carbon-in-leach or Carbon-in-pulp processing facilities • 27 tailings storage facilities, of which 16 are active • Three on-site gas-fired power plants • US$162m investment portfolio GOLD SALES We sell gold bullion to authorised bullion banks which in turn sell it on to central banks, investors, the jewellery industry, other industries and technology sectors. The gold- copper concentrate is sold to smelters for processing The Gold Fields Integrated Annual Report 20175 DEVELOPMENT Development of projects that have undergone a stringent evaluation – through scoping, pre- feasibility and feasibility studies - and, once brought to fruition, will improve the cost and production profile of our portfolio 2 4 MINING We physically extract gold-bearing ore from open pits and underground mines in a fully mechanised, internationally diversified portfolio. We apply experience and technical expertise to ensure the safe and efficient extraction of the ore. This is done directly by our teams or through contractor mining 3 PROCESSING We generate additional value by physical and chemical processing of gold-bearing ore into semi-pure gold doré. The gold doré is externally refined by registered refineries into gold bullion. At our Cerro Corona mine we produce a gold-copper concentrate OUTPUTS Operational/Financial • Extended average life-of-mine profile of our portfolio of mines • 2.16Moz of gold produced • US$2.85bn in value distributed to stakeholders • US$1.86bn in operational and capital procurements • US$506m spent on employee salaries, wages, benefits and bonus payments • Gold-eq Mineral Resources of 104Moz and Mineral Reserves of 49Moz at end-December 2017 Environmental • CO2 emissions: 1.96Mt • Mining waste: 212Mt Skills development and training • US$20m invested in training • 223 hours of training per employee Communities • US$17m investment in SED funding to benefit host communities • Host community workforce employment: 7,516 people • Host community procurement spend: US$774m OUTCOMES* • Improved shareholder confidence • US$160m paid in dividends and interest • Mine closure liabilities of US$381m • Net debt increased by US$137m to US$1,303m in 2017 • US$2m in net cash-outflow • Free cash-flow margin of 16% Safety and health • Three fatalities • 2.42 total recordable injuries per million hours worked Community investments • 1,850 job created and preserved at Damang • US$17m in SED spent in our host communities • Around 40% of our total workforce is sourced from host communities • 45% of our goods and services from host community enterprises • Strengthened social licence to operate * Due to the interconnected nature of our outcomes, we have not categorised these outcomes by capitals The Gold Fields Integrated Annual Report 2017Our businessOUR OPERATING ENVIRONMENT 6 Gold Fields is subject to external strategic dynamics that inform decision-making, and influence our business performance. An analysis of the key strategic themes – and how Gold Fields is responding to them 3 Gold price 1 Ø Issue The price of gold continued its volatile recovery during 2017, ending the year at US$1,300/oz, up US$150/oz from the end of December 2016 and US$230/oz from the December 2015 low of US$1,070/oz. Similarly, the average gold price received by Gold Fields increased from US$1,140/oz in 2015 to US$1,241 in 2016 and further to US$1,255/oz in 2017. More than any other variable, the gold price is the key dynamic informing our business strategy. The traditional investment case for gold as a safe haven asset was called into question as many investors sold their physical gold holdings after the gold price collapsed in 2012. While much of the gold price’s short-term movement is driven by market sentiment and geopolitical developments, an analysis of gold’s supply and demand fundamentals underpins our belief that the gold price should continue to improve over the next few years, though there will undoubtedly be periods of short- term volatility. According to the World Gold Council (WGC), gold demand fell 7% to 4,072 tonnes in 2017, driven by a decrease in investment demand. Exchange traded funds inflows of 203 tonnes, although positive, lagged the 545 tonnes recorded in 2016. Bar and coin demand fell 2% to 771 tonnes on the back of a sharp drop in US retail investment. India and China led a 4% recovery in jewellery demand to 2,136 tonnes, although this remains below historic levels. Net purchases by central banks and other official institutions continued to slow in 2017, decreasing to 371 tonnes from 390 tonnes in 2016 and 577 tonnes in 2015. However, buying by the Russian and Chinese central banks, while having slowed down, is expected to continue in 2018. In the long term, gold supply issues will also support a recovery in the gold price, in our view. According to WGC data, 2017 mine production was flat at 3,269 tonnes, after increasing only 1% in 2016. Many gold market analysts are of the view that the industry has reached peak production levels given the limited number of new gold discoveries since the mid-1990s together with the decreased levels of exploration spend in recent years. Global gold demand and supply versus the US$ gold price (Moz) 200 (US$/oz) 150 100 50 0 2 5 1 6 4 1 1 5 1 7 4 1 4 4 81 3 1 9 3 1 6 3 1 8 3 1 3 4 1 7 3 1 0 4 1 8 4 1 0 4 1 1 3 1 1 4 1 2010 2011 2012 2013 2014 2015 2016 2017 Demand Supply Gold price (rhs) Source: World Gold Council 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Ø Response Gold Fields does not predict the gold price. We expect volatility and structure the business accordingly. We maximise value by: • Prioritising cash-flow over production volumes • Setting targets for each mine at a 15% free cash-flow margin around planning price of US$1,300/oz • Eliminating marginal mining • Selling non-strategic assets The Group is therefore in a relatively strong state to weather a sustained lower gold price (at circa US$1,100/oz) and well positioned to capture future upside when the gold price recovers. During 2017, we invested in the future of our portfolios with a number of new projects, while at the same time continuing to invest in the ongoing development of ore bodies – through proactive near-mine exploration. Our mines avoid ‘high-grading’ – due to the obvious negative impact this would have on the sustainability of their ore bodies – by mining at or below their reserve grade. These growth strategies are strategic essentials that will in no way be compromised by the current price environment. Total mine supply (Moz) 120 1 0 1 9 9 100 4 9 1 9 8 8 4 0 1 5 0 1 5 0 1 80 60 40 20 0 10 11 12 13 14 15 16 17 The Gold Fields Integrated Annual Report 20177 Social licence to operate 2 Ø Issue The nature of the extractive sector means the industry must pay particular attention to its social licence to operate. Unlike other companies, mines are dependent on their mineral deposits and cannot relocate to new locations when facing deteriorating local or national operating environments. Furthermore, many mines’ lives are finite but still can span decades. Mines must be able to navigate complex social, economic and political dynamics over time to avoid conflicts with their host communities. As it is, conflicts between communities and mines have risen sharply over the past decade. To manage the potential risks, mining companies need to maximise their positive impacts, minimise their negative impacts and make sure that this is communicated to – and recognised by – host community stakeholders. For many decades this was not the case and, apart from a limited number of community jobs and procurement offered by mining companies, these communities saw few benefits. Similarly, taxes and royalties went into the coffers of central governments and rarely found their way back through investment in host communities. It is therefore not surprising that demands from host communities have become more vocal and strident in recent years. Amid widespread use of social media and activism in these communities their demands have also found a global audience. Ø Response At Gold Fields, a strong social licence to operate is a prerequisite for long-term generation of value for stakeholders. This approach had to be underpinned by: • Responsibility: ongoing investment in responsible operational standards to avoid and mitigate negative social and environmental impacts. This includes effective water and environmental management, which has become an increasingly material issue for most mining companies (p95) • 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 and social transformation (p110) Regulatory issues • Understanding: investment in communities relies on a thorough understanding of the risks, community needs and community perceptions. Since 2015, Gold Fields has undertaken relational proximity studies at a number of its mines and in 2017 also undertook socio-economic baseline and social return on investment studies at its South Deep mine in South Africa (p122) • Shared Value: the pursuit of mine-level business strategies that enhance the value of our own business and generate positive social impacts. Gold Fields currently has six Shared Value projects around the mines. The most important of these are our enhanced efforts to recruit employees and contractors from host communities and to source goods and services from host companies (p111) Global conflicts between communities and mines 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 20 40 60 Number of incidents 80 100 120 Source: ICMM, BHR (2017 not available) These initiatives are particularly important in the low gold price context, which has an impact on the Group’s ability to invest in community development projects as well as raising the prospect of job cuts among employees, many of whom hail from host communities. 3 Ø Issue A sound and certain regulatory and fiscal environment should enable the global gold sector to ride out short-term fluctuations in gold prices 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. Many governments view the industry as an easy target for higher taxes and other fiscal imposts. As a result, the governments’ share of mining revenue has grown at the expense of other stakeholders. Ø 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 wider global mining industry, has sought to address this trust gap in a number of ways: • The industry is continuing to spread value to a number of stakeholders. Over the past three years, Gold Fields has consistently created between US$2bn and US$3bn in total value annually for our wide range of stakeholders – accounting for around 90% of revenue on average (p12) • Gold Fields is actively promoting host community employment and procurement from host community enterprises in an effort to strengthen its social licence to operate and mitigate any regulatory actions that limit its ability to share the benefits of mining (p112) We actively engage with our host governments in Ghana, Australia, Peru and South Africa, either directly or through industry organisations, in addressing the resource nationalism that, we believe, prevents the sector from achieving sustainable growth. Gold Fields’ total value creation (US$bn) 3 5 6 . 2 3 4 . 2 8 9 . 2 5 8 . 2 1 5 . 2 2 1 0 13 14 15 16 17 The Gold Fields Integrated Annual Report 2017Our businessRISKS AND MATERIALITY 8 Top 15 Group risks and opportunities in 2017 1 2 Risks and mitigating strategies A sustained and significantly lower gold price and currency exchange rate volatility • Updated metal price forecasts approved for 2018 • Business plans implemented and monitored through monthly and quarterly cost, capital and production reviews • Ongoing portfolio optimisation to ensure cash generation • Approval obtained to hedge gold and copper production for the various regions and subsequent structures have been entered into • Business restructuring and technology strategies to improve efficiencies and costs South Deep 2.1 Partial achievement of the production targets as defined in the rebase plan and the associated loss of investor confidence • Organisational transformation initiatives to unlock the full potential of all our employees • Skills development programmes – artisan upskilling and supervisor training programme progressed • Ensure compliance to mine design programme implementation • Improve fleet performance by focusing on effective maintenance and operation of equipment 2.2 Logistics and utilities infrastructure • Continued maintenance and upgrading of underground logistics and utilities infrastructure • Upgrading of ore pass systems • Design work for implementation of upgraded backfill system in progress • Haulage infrastructure (rail upgrade) work programme progressing • Ongoing roadway maintenance programme • Comprehensive logistics and utilities infrastructure audit and a five-year implementation plan to commence in 2018 3 Non-delivery of Damang reinvestment and Gruyere projects • Both projects progressing in line with or ahead of their respective project schedules • Long-lead engineering items ordered and/or being manufactured • Gruyere access road and sealed airstrip projects completed • Monitoring wells have been drilled, cut-off trenches constructed and radar installed at the Damang East wall to improve pit wall stability 4 Regulatory uncertainty/Mining Charter in South Africa • Ongoing consultation with the Minister of Mines and the Presidency of South Africa through the Chamber of Mines in developing a new Mining Charter for the South African Mining Industry • Legal strategy in place and implemented through Chamber of Mines to facilitate certainty around historic transactions specifically with regard to ownership to ensure the security of mining licences 5 Replacing Resources and Reserves at international operations • Comprehensive near-mine exploration programmes in place • Mergers and acquisitions strategy to identify opportunities • Acquisition of additional shares in Cardinal Resources • Damang reinvestment and Gruyere projects progressing as per project schedules • Salares Norte project feasibility study on track for completion in 2018 • Significant exploration commitments in Australia and Ghana 6 Loss of social licence to operate and community acceptance • Growth opportunities in stable mining destinations – Gruyere and Salares Norte • Fit-for-purpose community relations structures in place • Strengthen stakeholder engagement strategy to deal with Native Title issues in Australia • Enhanced community investment and Shared Value projects in Ghana, Peru and South Africa • Interaction with communities via the SA Chamber of Mines regarding their involvement in the new Mining Charter 7 Water pollution, supply and cost • Strict and focused compliance with environmental management regulations • All operations ISO14001 certificated • Water management plans are being widened to include post- closure water management • Water recycle, reuse and conservation practices in place in all regions 8 Safety and health of our employees • Unrelenting focus on safety and health as the number one value in Gold Fields • Behaviour-based safety and visible-felt leadership programmes ongoing in all regions • ICMM Critical Control Management health and safety-based processes and policies rolled out and being tracked at the Board’s Safety, Health and Sustainable Development (SHSD) Committee • The Chairperson of the Board’s SHSD Committee chairs the South Deep quarterly safety meetings with the CEO in attendance 9 Attraction and retention of skills • Fit-for-purpose regional/mine structures in place to deliver on operational plans • Human resource strategy focused on developing a high- performance culture • Succession planning and talent review systems in place at mine, regional and group levels • Entrenching the Gold Fields values and culture The Gold Fields Integrated Annual Report 2017 9 How Gold Fields manages risk The approach to assessing risk in Gold Fields is a collective effort by management of the risks facing the business. The assessments of the risks may be subjective and qualitative to a degree as they are primarily used internally. A comprehensive set of risk mitigating actions reduces identified risks significantly. All heat maps reflect residual risks. Risk tables have been published in the IAR on this basis for the last eight years. m u m x a M i I Y T R E V E S 2 1 10 11 12 7 15 3 8 6 5 4 9 14 13 Minimum Maximum PROBABILITY Our top 10 materiality issues Gold Fields Group materiality score for Global Reporting Initiative standards (where 1 = critical to Gold Fields and 10 = not material at all) Economic performance Socio-economic compliance (SLO) Safety and health Employment Labour/management relations Public policy Indirect economic impacts Water Energy Training and education 1.8 2.5 2.7 2.8 2.8 3.3 3.3 3.4 3.5 4.2 For how we determine our risks and materiality, see www.goldfields.com/risk-management-and-materiality.php 10 Cost of energy and security of power supply • Five-year energy and carbon plans built into mine operational plans and being implemented • Continued investigation into the feasibility of renewable energy options • Genser gas power plants commissioned at Tarkwa and Damang and realising significant cost savings and providing stable power feeds • South Deep 40MW solar photovoltaic (PV) project in final phase of agreement process with an independent power producer • Oil price hedges in place in Australian and Ghana ending in December 2019 11 Impacts of global climate change • Comprehensive climate change vulnerability risk assessments conducted at all mines with remedial action plans being developed • Aligning our financial and operational climate change disclosure to latest international standards • Evaluating 20% renewable energy options for new projects in Australia and Chile 12 Cyber crime/loss of information, communication and technology (ICT) data • Implementation of a cyber intelligence programme incorporating external monitoring and early detection of cyber attacks • Cyber security maturity assessment conducted and areas for continual improvement identified and being implemented • Cyber security specialist position to be appointed • Review and implementation of the ISO 27001 security standard for key risk areas • Attack and penetration testing is ongoing, led by Internal Audit and ICT Department 13 Group litigation • Legal and engagement strategies to deal with potential Native Title-based claims at our Australian operations • In South Africa, work is ongoing through the Occupational Lung Disease Working Group, including legal and stakeholder mitigating strategies, to achieve a fair settlement on the Silicosis claims • Potential liability on the Silicosis payment booked for accounting purposes 14 Wage agreement in South Africa and Ghana • Early preparation for wage negotiations with proper market analysis, industry trends and settlements • Communication of the macroeconomic environment • Contingency plans in place for strike action • In Ghana, Tarkwa is implementing the conversion to contractor mining 15 Political uncertainty in South Africa (national elections in 2019) • Geographic derisking towards favourable jurisdictions ongoing • Improved engagement strategies with governments and regulators • Lobbying governments directly and through the Chamber of Mines – including legal strategies and actions • Rand West City forum established to facilitate engagement between mines, local government and community organisations The Gold Fields Integrated Annual Report 2017Our business RISKS AND MATERIALITY continued 10 Top 5 risks and opportunities per region in 2017 Risks and mitigating strategies South America region m u m x a M i I Y T R E V E S 2 1 4 3 5 Minimum Maximum PROBABILITY West Africa region 2 4 5 1 3 m u m x a M i I Y T R E V E S Minimum Maximum PROBABILITY 1 2 3 4 5 Implementation of the in-pit tailings project at Cerro Corona • Scoping study awarded to an international consulting engineering firm • Group support through corporate technical services • Feasibility study to facilitate early in-pit tailings has been completed Salares Norte project, Chile – potential delay in Environmental Impact Assessment (EIA) approval • Completion of the hydrogeological model at the Salares Grande basin • Proactive and timeous community engagement programme • Proactive communication of information to relevant authorities Oxide ore stock transportation to nearby CMC mining company • Securing commercial contract and close co-operation with CMC • Road maintenance • Safe mining and haulage planning and optimisation • Ensuring support from impacted communities and community safety programmes Transition to a new mining contract through retender process • Ensuring seamless workforce transfer from old to new contractor • Building up of ore stocks • Build efficiency incentives into the new mining contract Local social pressures, conflicts and community expectations • Proactive community and stakeholder relationships and engagement • Crisis management plans to deal with potential conflict • Stringent follow-up and feedback on all community commitments • Involvement of government authorities in our social projects Risks and mitigating strategies 1 2 3 4 5 Transition from owner to contractor mining at Tarkwa • Ongoing engagement with union and affected stakeholders • Employee awareness and sensitisation programmes in place – including transfer to contractor and industry-based severance packages • Establishing and monitoring key milestones for the transition project • Change management process • Stockpiles built up to minimise impact of possible disruptions Fiscal and government policy changes • Frequent engagement with relevant government departments • Intensive engagement via the Ghana Chamber of Mines • Ensure adherence to principles and conditions in the Development Agreement (DA) Execution of Damang mine reinvestment project • Implementation and delivery of milestones under the reinvestment plan • Fit-for-purpose organisational structure and continuous improvement initiatives • Ongoing monitoring of contract mining milestones • Pit wall control implementation • Drilling and mining of Amoanda and Huni pits as key additions to the long-term plan Reserve depletion at Tarkwa – inadequate organic growth and LoM extension • Drilling to test new mineralisation targets • Comprehensive brownfields exploration on lease area • Innovation and technology programme to improve mining efficiencies • Ensure utilisation of DA benefits for long-term LoM and exploration potential Power – switching to own/backup power generation and impact of costs • Monitoring of independent power purchase agreement with Genser Energy to reduce grid reliance • Strict implementation of project deadlines • Damang: Commissioning of Genser Power plants completed in Q4 2016 • Tarkwa: Full commissioning of the fourth turbine to be completed in early 2018 The Gold Fields Integrated Annual Report 201711 Risks and mitigating strategies Australia region m u m x a M i I Y T R E V E S 1 3 4 2 5 Minimum Maximum PROBABILITY 1 2 3 4 5 Reserve life at all mines • Significant near-mine exploration to delineate further Mineral Reserves • Divestment of Darlot completed and Gruyere construction on schedule • Extended exploration programme at Agnew • Ongoing business improvement initiatives to achieve cost savings Gruyere project delivery • Overall engineering and construction progress of the project on target • Deliverables strictly monitored against engineering design and construction • Joint venture management and steering committee structures in place • Approvals for construction of gas pipeline obtained • Amendments to environmental approvals obtained Australian Dollar gold price • Ongoing business improvement initiatives focused on business efficiencies and reduced costs • Australian Dollar gold price hedging strategy Turnover of key personnel and impact on operational performance • Review and improvement of employee development programmes • Strategic workshop to reposition attraction, retention and engagement of key personnel • Market-related remuneration External influences on rising input costs including taxes • Jobs-first for Western Australia campaign launched through industry bodies • Engagement with politicians and media • Review of stakeholder relations strategy Risks and mitigating strategies Partial achievement of the production build-up targets as defined in the South Deep rebase plan and the associated loss of investor confidence • Transforming organisational culture to ensure high performance based on trust and accountability at all levels • Skills development programme, including artisan upskilling and supervisory training programmes implemented and monitored • Grade and compliance to mine design programmes in place for early remediation • Improve fleet performance by focusing on effective maintenance and operation of equipment • Integrating and optimising all aspects of the mining value chain Safety and health of employees • Implementation of the ICMM Critical Control Management process to prevent major unwanted health and safety incidents • Behaviour-based safety and visible felt leadership programmes strengthened • Database established to log all safety incidents and sub-standard safety conditions • People and vehicle proximity detection devices on locos and heavy equipment installed • Seismicity monitoring system and response plans implemented • Dust reduction task team created in line with regulatory requirements and Chamber of Mines working group established to reduce underground silica dust exposure • Focus on fan silencing and equipment maintenance to reduce noise in the workplace and all category A and B employees to be issued with personalised hearing protection devices Geotechnical risk associated with mining at depth and evolving mining operations • Implemented Geotechnical Review Board recommendations, including revised support strategies, mining sequence, pillar, configuration changes and improved modelling capabilities • High profile destress design change implemented with improved pillar yielding/reduced backfill dependency • Comprehensive backfill intervention strategy implemented including the appointment of dedicated staff • Support strategy implemented for ground support • Pre-conditioning formal training by expert business partner Regulatory uncertainty/Mining Charter in South Africa • Ongoing consultation with the Minister of Mines and the Presidency of South Africa through the Chamber of Mines in developing a new Mining Charter for the South African mining industry • Legal strategy in place and implemented through Chamber of Mines to facilitate certainty around historic transactions specifically with regard to ownership to ensure the security of mining licences Loss of social licence to operate and community activism • New 2018 – 2022 SLP approved by the Social, Ethics and Transformation Committee and submitted to the Department of Mineral Resources for approval • Fit-for-purpose community relations and stakeholder engagement structure in place and delivery on this • Delivery of the three-year host community employment and procurement plan on track, collaborating with community trusts on project implementation 1 2 3 4 5 South Africa region 1 2 3 5 4 m u m x a M i I Y T R E V E S Minimum Maximum PROBABILITY The Gold Fields Integrated Annual Report 2017Our businessVALUE CREATION AND DISTRIBUTION 12 Governments Payments include Mining royalties and land-use payments, taxes, duties and levies and dividends. Why these stakeholders matter 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. What we contributed in 2017 • We paid governments US$310m (2016: US$235m) in taxes and royalties, 11% of total value distribution (2016: 10%) • In addition, the Ghanaian government receives dividends relating to its 10% shareholding in Gold Fields Ghana, depending on the Company's performance National value distribution by region 2017 (US$m) Americas Australia South Africa West Africa Corporate Total Gold Fields 62 160 2¹ 79 7 310 Business Payments include Operational and capital procurements. Why these stakeholders matter Supply chain businesses provide the equipment and services needed to develop and maintain our operations. They comprise business partners, contractors and suppliers. What we contributed in 2017 • We paid US$1,857m to suppliers and contractors, representing 65% of total value creation (2016: US$1,648m/66%) • Of the total 2017 procurement expenditure, US$1,620m or 88%, was spent on businesses based in operating countries (2016: US$1,360m/83%) • US$774m, or 45% of total procurement, was spent on suppliers and contractors from host communities (2016: US$558m/41%) National value distribution by region 2017 (US$m) Americas Australia South Africa West Africa Corporate 147 815 221 667 7 Total Gold Fields 1,857 Workforce Payments include Salaries and wages, benefits and bonus payments (including shares and payroll taxes). Why these stakeholders matter The technical skills, experience and activity of our people drive the day- to-day operations of our business. What we contributed in 2017 • We paid US$506m (2016: US$482m) to employees in terms of salaries, dividends and benefits, representing 18% of total value distribution (2016: 19%) • We also provide employees (where legislated) with additional benefits such as retirement savings, healthcare assistance, life and disability insurance, housing assistance and personal accident cover National value distribution by region 2017 (US$m) Americas Australia South Africa West Africa Corporate Total Gold Fields 38 135 168 115 49 506 Total and national value distribution National value distribution by region and type 2017 (US$m) Government Business Employees/ contractors Communities Capital providers National value distribution Americas Australia South Africa West Africa Corporate 62 160 2¹ 79 7 147 815 221 667 7 Total Gold Fields 310 1,857 1 South Deep does not yet pay income tax as it is in a loss-making position 2 This includes spending from the South Deep trusts and SLP commitments 38 135 168 115 49 506 7 — 42 6 — 17 4 — 12 9 136 160 257 1,110 407 876 199 2,850 The Gold Fields Integrated Annual Report 201713 Capital providers Payments include Interest and dividend payments to capital providers. Why these stakeholders matter Financial institutions, shareholders and bond holders invest with us, thus enabling us to fund the development, maintenance and growth of our operations and our overall business. What we contributed in 2017 • We paid US$160m (2016: US$122m) to the providers of debt and equity capital, mainly in the form of interest and dividends • Net debt increased by US$137m to US$1,303m during 2017 National value distribution by region 2017 (US$m) Americas Australia South Africa West Africa Corporate Total Gold Fields 4 — 12 9 136 160 Managing our impacts The nature of our mining operations requires that we understand, minimise and manage the impact of our operation. Community impacts in 2017 Community investments: US$17m Funding of projects that directly benefit our host communities Host community workforce employment: 7,516 people Around 40% of our total workforce is sourced from host communities Host community procurement: US$774m During 2017 Gold Fields procured 45% of its goods and services from host community enterprises Environmental impacts in 2017 Water withdrawal: 33Gℓ CO2 emissions: 1.96m tonnes Mining waste: 212m tonnes Energy usage: 12.2m GJ Communities Payments include Socio-economic development (SED) spending, including infrastructure, health and wellbeing, education and training, local environmental initiatives and donations. Why these stakeholders matter Host communities are the source of a significant portion of our workforce and a key component of our social licence to operate. What we contributed in 2017 • We invested US$17m (2016: US$16m) in terms of SED investment • Independently, the South Deep trusts spent R23m (US$1.7m) in 2017 (2016: R19.3m/US$1.4m) • 40% of our workforce is drawn from host communities (2016: 48%) • See p111 for an analysis of our host community employment and procurement as well as other benefits and investment in communities National value distribution by region 2017 (US$m) Americas Australia South Africa West Africa Corporate Total Gold Fields 7 — 42 6 — 17 Farming vegetables near our Tarkwa mine The Gold Fields Integrated Annual Report 2017Our businessDrilling on Lake Lefroy at St Ives Vision of the Chairperson CEO report – Introduction and overview – Group performance scorecard – Gold Fields strategy at a glance – Strategy overview – The road ahead for 2018 and beyond – The mine of the future p16 p19 p20 p22 p32 p35 p37 p40 Leadership At Gold Fields, we understand that strong and ethical leadership is the foundation of the Group’s ability to create value. We are committed to embedding best practice governance at all levels of the organisation to deliver on our strategy. VISION OF THE CHAIRPERSON 16 Cheryl Carolus, Chairperson Gold Fields has continuously met its production and cost targets Just over five years ago – in February 2013 – Gold Fields’ unbundling of its ‘legacy’ South African gold mines into Sibanye Gold (now Sibanye-Stillwater) was formalised. The rationale at the time was to refocus Gold Fields as a geographically diversified mining group with a quality portfolio of highly mechanised, open-pit or bulk underground operations and projects as well as focused management teams. The Gold Fields Integrated Annual Report 201717 US$4.30 – one of the top performers in the gold sector. I am certain that further value will be created for shareholders over time. However, some investors believe that much of our fortunes remain inextricably linked to both the short-term performance and outlook for South Deep, our sole remaining South African mine. While South Deep is a key component of our portfolio, I continue to stress that Gold Fields is a global gold company with much more than South Deep in its portfolio. Indeed, with production and cash-flow already heavily weighted towards our mines in Australia, South America and Ghana, we are increasing our investment in these regions to ensure the longevity and sustainability of our international portfolio. At Damang, we are spending US$341m over a number of years to extend the mine’s life to 2025 and in Australia we have partnered with Gold Road to develop the Gruyere project in the highly prospective Yamarna district in Western Australia. In Chile, Salares Norte progressed into the feasibility phase last year. All these projects are being progressed within time and budgeted parameters. While our international mines and projects are consistently meeting or even exceeding their targets and guidance, South Deep remains the one asset in the portfolio that is yet to contribute meaningfully to Gold Fields’ success. In February 2017, the Board approved a comprehensive five-year rebase plan that will set the mine up to achieve a steady-state production level of approximately 500,000oz by 2022 at an All-in As the Board looks back over the past five years, I believe we can reflect with a measure of satisfaction on how Gold Fields has lived up to its vision to the benefit of its key stakeholders. Despite operating in a difficult economic environment – the gold price has fallen by almost 20% over the five-year period – Gold Fields has continuously met its production and cost targets and generated US$419m in net cash-inflow over that period. If we exclude 2013, the year in which the gold price experienced a large drop, net cash-inflow since then has been over US$650m. This demonstrates that the change in strategy in 2013 from a more production growth focus to a sustainable cash focus is bearing fruit. This cash has been used to create significant value for our key stakeholders, while at the same time enabling the Company to invest in future growth by funding the life extension of its existing mines, protecting the integrity of the mines' ore bodies and bringing new projects to fruition. Investors are gradually being won over by the success of the strategy of long-term sustainable cash generation for the business. It has been undoubtedly an immense source of frustration for management and our shareholders that the share price has not reflected the Company's sound operational performance since 2013. During 2017, however, the Gold Fields share price recovered strongly. On the JSE it rose by over 24% to end 2017 at R54.10 and on the New York Stock Exchange by 43% to costs (AIC) of R410,000/kg. After a setback in Q1 2017, when the two fatal accidents and three fall-of- ground incidents impacted production in high-grade areas, South Deep fell short of its production and cost targets for the first year of the plan. This has had some follow-through impact on the second year as well, but the integrity of the rebase plan is not in question and its successful implementation is a prerequisite for realising the mine’s long-term value for the benefit of both our shareholders and other local stakeholders. Safe operational delivery at the mines and projects remains the Board's priority and we fully support management’s efforts in further entrenching safety standards and behaviours. While the number of total recordable injuries for the Group increased slightly in 2017, the long-term trend at Gold Fields has been a steady reduction in recordable and serious injuries – between 2013 and 2017 there has been a 42% improvement in the Total Recordable Injury Frequency Rate. However, it is unacceptable that miners continue to lose their lives while working at our mines. Tragically this is what happened at South Deep during 2017; Thankslord Bekwayo, a dump truck operator, and Nceba Mehlwana, a loco driver, were killed in underground accidents. A third fatality occurred at our Tarkwa mine in Ghana when a contractor, Moses Adeaba, was killed by falling scaffolding equipment in a warehouse. Our sincere condolences go out to the relatives, friends and colleagues of Messrs The Gold Fields Integrated Annual Report 2017LeadershipVISION OF THE CHAIRPERSON continued 18 Bekwayo, Mehlwana and Adeaba. The Board has once again urged management to prioritise efforts to ensure zero harm. This is possible, with the right leadership from mine management and the right behaviours exhibited by the workforce, as was illustrated by the Cerro Corona mine in Peru, which recorded only one recordable injury last year. Tarkwa had just three recordable injuries during 2017, notwithstanding that the fatal accident was one of them. Stakeholder engagement, beyond the regular interaction with our shareholders and investors, remains a critical issue for the Board. We devote considerable time to ensure that Gold Fields’ management deals appropriately with the challenges, issues and concerns of the key stakeholders in our host countries, including governments, employees, shareholders and host communities. During 2017, Gold Fields’ total value distribution to our stakeholders was US$2.85bn in the form of payments to governments, capital providers, business suppliers, communities and employees. Many of these stakeholders are, often rightfully, demanding an increasing share of the benefits of mining. In return though, we would expect governments and trade unions, in particular, to also play their part in ensuring the longevity and sustainability of the sector. During current negotiations with organised labour at our Ghanaian and South African operations, for example, we have not always found the common ground that could help us extend the life and sustainability of our operations. It is also imperative that we find ways of working with governments in all our jurisdictions in the spirit that enabled the development agreement we entered into with the Ghana government in 2016. As a direct consequence of this agreement, we were able to launch the reinvestment into the Damang mine last year, creating and preserving around 1,850 direct and indirect jobs and leading to significant new community investment. We are also in the process of finding more common ground with the government in South Africa, where the new Presidency has committed to renegotiations of the Mining Charter and other legislation. These negotiations had stalled in previous years when industry had no option but to pursue legal means to stop the implementation of unworkable and economically irresponsible regulations. As directors of this Company, one of our key responsibilities is to ensure that the global corporate governance programmes at Gold Fields are in line with the ever- changing and more stringent standards expected from multi- national companies. The Board is committed to upholding the governance outcomes of ethical culture, good performance, effective control and legitimacy underpinned by the King IV Code on Corporate Governance. During 2017 the Board oversaw the implementation of the Code and believes that Gold Fields is now materially compliant with King IV. Furthermore, Gold Fields’ revised Code of Conduct was rolled out to most of its operations during the year, which includes our commitment to respecting the human rights of all our stakeholders, as set out in the Human Rights Policy Statement. A number of key Group policies were also approved by the Board during the year, none more significant than the Group Diversity Policy, which commits Gold Fields’ leadership team to implementing policies and targets to achieve, among others, greater gender and race diversity at all levels of the Company. Appreciation Over the past few years the Board's composition has changed with six new directors joining the Board since 2016 – the latest being Carmen Letton who joined in May last year. The directors have settled into their new roles and the Board, I believe, has the requisite skills set and experience to continue guiding the Company on the right course in years to come. I want to pay a special tribute to Gayle Wilson, who retired in May last year after nine years on the Board, the last seven years as Chairperson of the Audit Committee. This is undoubtedly one of the most demanding roles on the Board, but Gayle completed it with aplomb and a professionalism that has been a constant throughout her career. Gold Fields has rightfully gained a strong reputation for transparent and comprehensive reporting under Gayle's watch. Gold Fields’ management teams and employees work in difficult economic and operational circumstances amid a relentless focus on cost controls and operational efficiencies. Under the leadership of CEO Nick Holland, they have done so with a strong commitment and dedication to the Company. On behalf of the Board, I would like to express my gratitude to Nick, his executive team and the workforce around the globe. Cheryl Carolus Chairperson The Gold Fields Integrated Annual Report 201719 CEO REPORT Nick Holland, CEO Exceptional performance at our international operations For a fifth year in a row Gold Fields has managed to meet or exceed its production and cost guidance during 2017. These strong results are testament to the exceptional performances of the teams at our international operations. The Gold Fields Integrated Annual Report 2017Leadership20 CEO REPORT continued Introduction and overview Dear stakeholders I am proud to say that for the fifth year in a row Gold Fields has met or exceeded its production and cost guidance during 2017. Our 2.16Moz attributable production for the year was above our guided 2.10 – 2.15Moz and 2016 production of 2.15Moz. All-in costs (AIC) of US$1,088/oz were lower than the guided US$1,170 – US$1,190/oz, but higher than the US$1,006/oz reported in 2016 due to an increase in project capital spending. Despite the increased spending we declared a total dividend of R0.90/ share and retained stable debt levels. These strong results are testament to the exceptional operational performances of our international operations. Our mines in Ghana, Peru and Australia generated US$483m (excluding growth capital at Gruyere and Damang) in cash by exceeding production targets and controlling costs. After a challenging Q1 2017, the South Deep mine in South Africa came in below the targets set for the first year of its five-year rebase plan announced early in 2017. The sound cash-generating performance by the Group is particularly noteworthy given that 2017 was the first year of Gold Fields’ reinvestment programme – a programme that seeks to sustain the current production base for the next decade. Total capital expenditure during 2017 amounted to US$840m (US$834m at continuing operations and US$6m at discontinued operations) with a further US$835m budgeted for 2018. We are in effect adding two new mines to the portfolio and ramping another project up the value chain, in addition to an extensive brownfields exploration programme. The major investments are: • A US$341m investment at our Damang mine in Ghana to extend the life-of-mine (LoM) to 2025. Capital spending during 2017 was US$115m • A 50-50 joint venture with Australian explorer Gold Road Resources in the Gruyere project in Western Australia. The two companies are jointly investing a total of A$532m (US$411m) in the project. During 2017 our portion of the spending was A$184m (US$141m), including capital investment and other sundry management costs • A A$99m (US$75m) near-mine (brownfields) exploration programme at our Australian mines in 2017, which added 0.5Moz in Mineral Reserves (after depletion) and 0.4Moz in Mineral Resources during the year • The Salares Norte project in Chile, which has progressed into feasibility status. The feasibility study is expected to be completed by the end of 2018. Spending on further drilling and other work totalled US$53m during 2017 At South Deep, annual production was impacted by two fatal accidents and three fall-of-ground incidents in Q1 2017, which negatively affected the contribution from higher-grade corridors. Despite subsequent improvements during the remainder of the year, full-year production of 281,000oz came in 11% below the 2017 guidance of 315,000oz, while the AIC, at R600,109/kg (US$1,400/oz), was above the R585,000/kg (US$1,290/oz) guided. I believe that South Deep’s long- term production and cost guidelines, contained in the mine’s rebase plan released in February 2017, are realistic and achievable. The plan targets steady-state production of approximately 500,000oz by 2022 at an AIC of R410,000/kg. The tragic deaths of two of our South Deep colleagues – Thankslord Bekwayo and Nceba Mehlwana – and that of a contractor at our Tarkwa mine, Moses Adeaba, were a reminder that safety must remain our overarching priority. My heartfelt condolences once again go out to the families and friends of the deceased. Over the past few years we have made progress in improving the safety culture and standards at all our operations as is reflected in the 42% improvement in the Total Recordable Injury Frequency Rate (TRIFR) to 2.42 recordable injuries per million hours worked in 2017 from 4.14 in 2013. But, as the fatalities so tragically remind us, we can never let our guard down when it comes to the health and safety of people working at our operations. Our strong operational performance and the merits of the investment programme are starting to be recognised by the market. The Gold Fields share price improved by almost 43% on the New York Stock Exchange (24% on the Johannesburg Stock Exchange) during 2017, one of the best stock performers among our global gold mining peer group. It appears to reflect a gradual recognition that Gold Fields is a globally diversified gold company with our fortunes linked to the performance of all our operations, not just that of South Deep, our sole remaining South African mine. The Gold Fields Integrated Annual Report 201721 Gold Fields’ five-year production and cost profile Production (koz) 2,500 2 2 0 , 2 9 1 2 , 2 0 0 2 , 2 9 5 1 , 2 0 0 2 , 2 6 4 1 , 2 5 2 1 , 2 0 6 1 , 2 8 5 1 , 2 7 5 9 , 1 2013 2014 2015 2016 2017 Actual Guidance All-in costs (AIC) (koz) 1,400 0 4 2 , 1 6 4 1 , 1 0 5 1 , 1 7 8 0 , 1 5 7 0 , 1 6 2 0 , 1 0 4 0 , 1 6 0 0 , 1 0 8 1 , 1 8 8 0 , 1 2,000 1,500 1,000 500 0 1,200 1,000 800 600 400 200 0 2013 2014 2015 2016 2017 Actual Guidance Mining is an industry that has significant impacts on the countries and communities in which it operates. This requires continued proactive stakeholder engagement strategies and sustainable development policies. Communities, in particular, have over many years become critical stakeholders for our mines. During 2017, we spent significant resources in investing in Shared Value community programmes, including increasing the share of jobs and procurement spend allocated to host communities. The judicious use of water and energy resources by our mines is another critical element, not only as part of our commitment to operational efficiencies and environmental stewardship, but also as part of strengthening our social licence to operate. During the year, the Board approved updated policies to strengthen sustainable development programmes and stakeholder engagement initiatives. This includes updated sustainable development and climate change policies and strategies as well as an increased commitment to the work of the International Council on Mining & Metals (ICMM), of which we are a member. Gold Fields’ value distribution to stakeholders in 2017 – as measured by the World Gold Council definitions – rose strongly to US$2.85bn compared with US$2.51bn in 2016. Supporting our integrated management approach is robust and effective corporate governance throughout the Company. During 2017, Gold Fields implemented its revised Code of Conduct, which forms the ethical foundation of the business and informs how we conduct ourselves and interact with all stakeholders. The Board of Directors has also overseen the implementation of the recommendations of the King IV Report on Corporate Governance and approved a new diversity policy for our workforce. This will drive race and gender diversity at all operations, which is critical as we believe that the wide array of perspectives that results from such diversity promotes innovation and drives business success. In the second section of this report, we unpack the Company’s strategy (p32 – 36). The decision that faced Gold Fields’ management in 2017 was to balance distributing the value we generated to stakeholders with reinvesting into our assets to ensure that our portfolio of mines continues to generate cash sustainably into the foreseeable future. To date we have been successful and I have confidence that our management teams will once again meet this challenge to the long-term benefit of all our stakeholders. The Gold Fields Integrated Annual Report 2017LeadershipCEO REPORT continued 22 Introduction and overview continued Performance highlights (Group, including discontinued operations) Attributable production All-in sustaining costs (AISC)3 All-in costs (AIC)3 Net cash-flow1 Free cash-flow (FCF) margin3 Net debt Dividend declared Fatalities Total Recordable Injury Frequency Rate (TRIFR) Total value distribution Energy usage2 Water usage CO2 emissions Host community procurement (% of total) Host community employment (% of total) Mine closure liabilities Moz US$/oz US$/oz US$m % US$bn R/share Number /million hours worked US$bn TJ Mℓ million tonnes % % US$m 2017 2.16 955 1,088 (2) 16 1.303 0.90 3 2.42 2.850 12,178 32,985 1.96 45 40 381 2016 2.15 980 1,006 294 17 1.166 1.10 1 2.27 2.505 11,697 30,321 1.96 38 48 381 1 Net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments 2 The sum of direct and indirect energy consumption reflects a conversion factor used by Granny Smith, Darlot,Tarkwa and Damang power stations to account for generation losses 3 These measures have been defined in management’s discussion and analysis in the Annual Financial Report and have been reconciled to IFRS Group performance scorecard ➊ Deliver FCF margin of 15% at US$1,300/oz ➍ Manage balance sheet and maximise capital returns ➎ Improve quality of our portfolio for operations ➋ Safely meet guidance ➌ Safely deliver strategic projects ➏ Protect licence to operate and enhance reputation CAPITAL DISCIPLINE PORTFOLIO MANAGEMENT SAFE OPERATIONAL DELIVERY STRATEGIC OBJECTIVE Maximise total shareholder return sustainably LICENCE AND REPUTATION The Gold Fields Integrated Annual Report 201723 Group performance scorecard Each year, Gold Fields adopts a Group performance scorecard that incorporates the Company’s strategic priorities and seeks to instil the right culture and behaviours among our workforce, driven by the imperative of cash generation and sustainably growing the business. By integrating all of the key value drivers into the business, the scorecard also aims to enhance the Group’s sustainability and reflects the integrated nature of our business. The scorecard consists of four key performance areas and elements against which we measure our performance. These are: safe operational delivery, capital discipline, portfolio management and licence and reputation. This Integrated Annual Report is structured along the lines of our 2018 scorecard and an overview of each performance area follows. Safe operational delivery Gold Fields remains committed to running its operations safely, productively and cost-effectively without undermining their longevity. We measure the success of business optimisation by looking at our progress on safety and health towards zero harm; the performance and growth of our portfolio of mines and projects; setting up the South Deep project for long-term success; delivering the Damang and Gruyere projects; using energy and water efficiently; and implementing appropriate workforce strategies to achieve these targets. Safety and health Safety is management’s first priority and it is critical that we continuously emphasise our commitment to zero harm. Therefore, the fact that we had three fatalities at our mines during 2017, compared with one in 2016, is a serious setback. to prevent or mitigate these events are now being implemented. Our overall safety performance regressed during 2017, with the Total Recordable Injury Frequency Rate (TRIFR) increasing to 2.42 per million hours worked from 2.27 in 2016, as the total number of recordable injuries rose to 138 from 124 in 2016. Despite the setback in our safety performances in 2017 we remain convinced that zero harm is possible with the right commitment from management and the right behaviours exhibited by the workforce. Our Cerro Corona mine shows that it can be done. The mine reported only one recordable injury in 2017. That was in January of that year; since then it has gone 14 months without a recordable injury. Behaviour-based safety programmes are in place across the Company and our work at embedding these into our day-to- day performance, along with visible management leadership on the ground, will be strengthened in the wake of the fatalities during 2017. A safety leadership forum has been established to share learnings and good practices across the Company. Our regions have also intensified operation-specific health and wellness programmes, focusing on improving the physical and mental health of our employees. Furthermore, to address the risk of major, particularly fatal, incidents, Gold Fields adopted the critical control management approach promoted by the International Council on Mining & Metals (ICMM). Material unwanted events in safety, health, environment and in the community were identified and prioritised in each region. Controls I am also pleased to report that the Occupational Lung Disease Working Group, representing gold mining companies in South Africa, is making good progress in negotiations with the legal representatives of workers that have been affected by silicosis. We remain committed to finding a fair and sustainable solution for the claimants and the companies. During the year, we raised a provision of R390m (US$30m) for a possible settlement of the silicosis class action claims. Business performance 2018 is the second year of our reinvestment programme that seeks to improve the quality of our portfolio and sustain the current production base for the next decade. The significant capital expenditure requirements that accompany this programme inevitably resulted in higher Group costs and reduced net cash-flow during 2017. As such, we guided the market at the beginning of 2017 on higher costs and marginally lower production. As we have done consistently over the past five years, we again exceeded our guidance during 2017. Attributable production of 2.16Moz, was above our guidance range for the year of 2.10 to 2.15Moz and in line with the 2.15Moz produced in 2016. Four of the mines in the Group reported improved production in 2017 compared with 2016, and Damang was well ahead of guidance. South Deep’s production was lower than in 2016. The Gold Fields Integrated Annual Report 2017Leadership24 CEO REPORT continued Group performance scorecard continued Strong cost management across the Group resulted in a good cost performance with AIC of US$1,088/oz and AISC of US$955/oz in 2017, below guidance for the year of US$1,170 – 1,190/oz and US$1,035 – 1,045/oz respectively. In 2016, AIC and AISC were US$1,006/oz and US$980/oz, respectively. The Group reported net cash- outflow of US$2m (2016: US$294m cash-inflow) and a FCF margin (which excludes capital spend on growth projects) of 16% (2016: 17%). The gold price received by Gold Fields during 2017 averaged US$1,255/oz (2016: US$1,241/oz). The Group and mine operating and financial performances are detailed on p42 – 49. Project delivery 2017 was the first year in our drive to secure the longevity and sustainability of our portfolio of assets. Group capital expenditure levels increased to US$840m during 2017 (2016: US$650m), of which US$217m was growth capital. All our key projects are tracking their delivery deadlines and financial budgets: • US$115m was spent on the Damang reinvestment project during the year. The project is ahead of its planned progress and in line with budget. (For an update on the Damang reinvestment project, see p81) • We spent A$184m (US$141m) on the Gruyere project in Western Australia, a joint venture with Gold Road Resources. Of this A$106m (US$81m) was project capital and the remainder the deferred portion of the purchase price of our 50% in Gruyere. The deposit, which has 3.5Moz in total Mineral Reserves, is set to produce 270koz a year (100% basis) over a 13-year LoM. All the key contractors for the project have been appointed and progress on construction is in line to meet the targeted completion date of Q1 2019. (For details of the Gruyere JV, see p84) • Exploration drilling progressed at the Salares Norte project in Chile, which moved into feasibility phase in 2017. US$53m was spent in 2017 and a further US$83m has been budgeted for 2018 on the feasibility study with its completion set for the second half of 2018 (for details on Salares Norte, see p85) South Deep rebase plan After a two-year detailed assessment by the South Deep management team, the Board approved a rebase plan for the mine in February 2017. This plan sketches the long-term production and cost profile of the mine and contained the following key targets: • Increasing the tonnes milled to 230kt/month by 2022 • Ramping up production to approximately 500,000oz/year by 2022 • Reducing AIC to US$410,000/kg by 2022 • Growth capital expenditure of R2.3bn (US$151m) from 2017 – 2022 The implementation of the rebase plan, however, got off to a slow start, with five safety incidents in the higher-grade section of the mine impacting production during the first quarter of the year. As a result, Q1 2017 production was 600kg (19koz) lower than planned. Although there was an improvement in production during the remainder of the year, the mine was unable to make up the shortfall in production from the first quarter and consequently fell short of guidance for the year. Production for the full year decreased by 3% to 8,748kg (281koz) in 2017 from 9,032kg (290koz) in 2016 and was short of the guided 9,800kg (315koz). Net operating costs were 2% higher at R4,062m (US$305m). AIC increased by 3% to R600,109/kg (US$1,400/oz) compared with R583,059/kg (US$1,234/oz) in 2016, as a result of lower production. The rebase plan had guided an AIC of R585,000/kg (US$1,280/oz) for year one. South Deep also reported a goodwill impairment of R3.5bn (US$278m) during 2017, underpinned by a reduction in the gold price, assumption used in the LoM impairment model and the slow start of the rebase plan. Though there has been some operational improvement at the mine, work is still required in the areas of mine development, destress mining and long-hole stoping. During 2017, development decreased marginally to 6,897 metres from 6,933 metres in 2016. Development in the new mine areas increased by 20% to 976 metres in 2017 from 811 metres. Destress mining increased by 3% to 33,419m² in 2017 from 32,333m² in 2016. Long-hole stoping volumes mined increased by 3% to 767kt in 2017 from 745kt in 2016. The knock-on effect of the lower production in Q1 2017 is expected to continue into 2018 and we are guiding for production of 10,000kg (321koz) and AIC of R540,000/kg (US$1,400/oz), compared with the original rebase plan year two guidance of 11,136kg (358koz) and R567,910/kg (US$1,240/oz). The Gold Fields Integrated Annual Report 201725 However, we have full confidence in the integrity of the rebase plan and believe that South Deep will be able to meet the 2022 targets (p82 – 83). A new regional management team has also begun to tackle many of the operational deficiencies that were evident and is also reviewing the cost structure of the mine, including the size of the workforce, in line with its production profile. Energy supply and cost The supply and cost of energy is a material focus area of our operational strategies, as it is becoming an increasingly expensive resource globally. The use of many energy resources also has a significant impact on our environmental footprint. As such, our mines have been tasked with developing and implementing policies that ensure security of energy supply as well as cost savings, while also seeking to reduce our carbon footprint. Energy accounted for 17% of Group operating costs in 2017. While energy consumption increased by 4% in 2017, the Group reduced energy spending by 11% to US$258m in 2017, amid greater operational energy efficiencies that yielded savings of around US$22m. Furthermore, with our increasing usage of renewable and low-carbon energy sources, we expect further energy efficiencies and reduced carbon emissions in the future. Costs will also benefit from this trend, given the recent rise in global oil prices. In Ghana, Gold Fields signed a power purchasing agreement (PPA) with an independent power producer, Genser, after significant cost increases and supply outages experienced in preceding years when we relied solely on the state-owned utilities for supply. In terms of the agreement, Genser commissioned the gas-powered plants at both Tarkwa and Damang during Q4 2016. By Q1 2018, the plants provided 100% of power at Damang and 60% at Tarkwa, significantly improving supply and reducing costs at both mines. In 2017, we reached a commercial agreement and are close to signing a 25-year PPA with an independent power producer (IPP) for a 40MW solar photovoltaic facility at our South Deep mine. The IPP will develop, build, own, operate and maintain the plant with commissioning expect in 2019. Gold Fields remains committed to its goal of 20% renewable energy generation over the LoM at all new projects and is investigating this requirement for the Salares Norte project in Chile. Greater use of renewables has the added benefit of reducing our carbon footprint, which is one of Gold Fields’ key environmental priorities. During 2017, our total CO2 emissions declined marginally to 1.959m tonnes (2016: 1.964m tonnes), but we expect longer-term benefits arising from the energy efficiency and fuel-switching projects we have put in place at our mines. Fit-for-purpose workforce A key area of focus in 2017 was to ensure that our mines have appropriately sized and qualified workforces to drive safe operational delivery. Contractor mining has over the years been used at a number of our operations in line with various operational requirements and LoM factors, such as longer hauling distances and the increasing depth of our underground operations. These include the Gruyere project, Cerro Corona in Peru, Ghana’s Damang mine and at many of our Australian operations. In early 2018, we also commenced our transition to contractor mining at the Tarkwa mine, given the escalating cost of labour in Ghana and the need to invest in new equipment and fleet. In South Africa, in response to the continued underperformance at South Deep, we have commenced a workforce restructuring as part of our drive to align costs with the mine’s production profile. This has to date seen a 26% reduction in staff numbers among managers and supervisors at the mine. Other important human resource initiatives implemented in 2017 included the continued drive to have appropriately skilled people in the right roles. With the increasing shift towards mechanisation and automation, we have found that in addition to the continued development and training of our workforce, it is important to recruit appropriately skilled people at our mines. During 2017, we spent over US$20m globally on training and development – on top of recruiting the best mining skills to supplement our existing talent pool. Having the right culture in the organisation is another key component for delivery. During the year, we reinvigorated the Gold Fields’ Vision and Values, contextualising them within the Company strategy to embed the behaviours required for delivery. The Gold Fields Integrated Annual Report 2017Leadership26 CEO REPORT continued Group performance scorecard continued We also re-emphasised the importance of focusing on the overarching Group-wide strategic objectives, and building a more unified workforce across our global operations. This project will continue to run throughout 2018. The year also saw an increased focus on workforce diversity – both in terms of gender and race. While our global workforce is culturally diverse, gender and racial diversity remain a challenge within certain regions. A more diverse workforce and the varying skills, perspectives and problem-solving approaches that come with it can be a powerful internal lever for improved delivery. This will remain an imperative for management in the year ahead and was given a big boost when the Board adopted the Group Diversity Policy during 2017. Innovation and technology Innovation and technology (I&T) is critical in improving safety, volumes and costs at our mines over time. During 2017, a newly established I&T division at Gold Fields started implementing the I&T strategy approved by the Board in late 2016. The ultimate goal of the strategy is to work towards the Gold Fields Mine of the Future, which will be premised on automation, an integrated digital data platform, remote machine operation, virtual reality and reduced mining waste. In 2017, we commenced with the foundational phase of the strategy, which is scheduled to be completed by 2019. This will be followed by programmes to optimise our operations by year three and implementing new technologies and innovation over the full five-year period. Our regions have also been tasked with implementing three-year technology plans. They started this work in 2017, with the I&T division consolidating and driving the process. During 2017 the following milestones were achieved by Gold Fields’ operations in implementing the I&T strategy: • Purchased high-precision GPS drilling rigs at Cerro Corona and Tarkwa to improve blasting efficiencies • Rolled out drone survey technology in West Africa to accelerate tailings, waste dump and pit surveying • Rolled out mine sense blending software and systems at Cerro Corona • Increased use of tele-remote systems from surface at Granny Smith Our regions have also started to implement their own roadmaps, including identifying I&T projects for implementation in 2018. The following are our major Group-wide project objectives for 2018: • Start to upgrade information technology and operating technology networks at all our operations. This includes installing underground wireless technologies in South Africa and Australia to enable real-time data availability to assist our teams in decision making • Rollout the ‘Mine of the Future Hearts and Minds’ programme among employees to develop a manufacturing mindset among the workforce at our operations (OEMs) that are leaders in the field. This will be done on a Company- wide basis, but also in co-operation with our peers in the ICMM. The introduction of electrical machinery and vehicles in mining operations is one of the key projects that the ICMM will raise with OEMs this year. Capital discipline The core focus of Gold Fields’ financial strategy is to grow our FCF margin and to sustain this margin in the long term. The Group has set a FCF margin target of at least 15% at a notional long-term planning gold price of US$1,300/oz, which translates to an AIC breakeven level of approximately US$1,050/oz. To ensure the sustainability of FCF generation in the longer term, reinvesting in and upgrading our portfolio is essential. As such, Gold Fields embarked on a period of reinvestment at the beginning of 2017, with 2017 and 2018 being the peak capital expenditure years of the programme. This will temporarily put pressure on our net cash-flow generated and our ability to retain our debt levels below the long-term target. Financial performance Despite the significant capital investment programme, Gold Fields produced a sound financial performance during 2017. With most of the mines reporting production in line with or ahead of guidance, and the average gold price received slightly higher at US$1,255/oz (2016: US$1,241/oz), net revenue increased by 2% to US$2,811m in 2017. A critical element of our strategy is partnerships with IT companies and original equipment manufacturers Given the volatility in commodity prices and exchange rates and, more pertinently, the high levels of The Gold Fields Integrated Annual Report 2017 27 project capital expenditure incurred during the year, management undertook short-term, tactical hedging of the oil price, the copper price and the Australian Dollar gold price to protect cash-flows. While these hedges worked in Gold Fields’ favour, apart from the copper price hedge, it must be stressed that management has not deviated from its policy of not considering long- term, systematic gold price hedging. Despite a stronger South African Rand and Australian Dollar during 2017, which pushes up the input costs for our mines in those jurisdictions in US Dollar terms, Group AIC came in below guidance at US$1,088/oz (2016: US$1,006/oz). Taking into account all of the above, net losses attributable to Gold Fields shareholders amounted to US$19m in 2017 compared to earnings of US$158m in 2016. Critical to our margin focus and our investment programme is the cash-flow generated by the operations, which remained strong and came in ahead of expectations in 2017. Excluding project capital and exploration expenditure, operational cash-flow was US$441m (US$188m in Australia, US$117m in Peru, US$179m in Ghana and a negative US$43m in South Africa) versus US$444m in 2016. During 2017, the Group recorded net cash-outflow of US$2m, compared to an inflow of US$294m in 2016. Included in this cash-flow number is total capital expenditure of US$840m, which includes US$623m in sustaining capital and US$217m in project capital. In addition, US$53m was spent at Salares Norte, which is currently in feasibility study. The FCF margin decreased slightly from 17% in 2016 to 16% in 2017, driven primarily by an increase in taxes paid. Encouragingly, this is ahead of our targeted 15% FCF margin at a US$1,300/oz gold planning price. Dividends Gold Fields has a long and well- established policy of rewarding shareholders by paying out between 25% and 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. Despite recording a net cash outflow, the Group maintained its dividend policy and declared a total dividend for the year of R0.90/share (2016: R1.10/share), which translates to 39% of normalised earnings for the year. Debt reduction One of Gold Fields’ key strategic objectives has been to reduce the amount of debt on our balance sheet. In this regard, management set itself a long-term target of reducing the net debt to adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) ratio to below 1.0x. Having moved into a capital-intensive phase during 2017, management guided the market for a pick-up in net debt during the year. As such, the focus has shifted to limiting the cash outflow, minimising the increase in debt and maintaining the strength of the balance sheet through the peak capital expenditure years (2017 and 2018). Net debt increased by US$137m during the year to US$1,303m at the end of 2017 from US$1,166m at the end of 2016. Given the improved Group production and the lower costs, the outperformance of the Damang reinvestment plan, less capital expenditure incurred at Gruyere than planned and a higher gold price than budgeted, Gold Fields ended 2017 on a net debt/ EBITDA ratio of 1.03x, a slight increase from the 0.95x at the end of 2016. Portfolio management Gold Fields manages its assets to improve the overall quality of its portfolio and ensure the sustainability of the cash-flow generated by this portfolio. In this regard, the focus is on reducing Group AIC, increasing the free cash-flow per ounce and extending the life of the assets. When looking at growth in the Gold Fields context, our focus is not on growing the level of production but rather on growing FCF per ounce and extending the average reserve life per operation sustainability. We believe that by maintaining this focus we will improve the quality of our portfolio over time. Elements of the portfolio management process include: • Acquiring or developing lower- cost (than Group average), longer-life assets • Disposing of higher-cost, shorter- life assets that management believes can be better served by a company that has more time and resources to commit to them • Extending the life of current assets through near-mine brownfields exploration The Gold Fields Integrated Annual Report 2017Leadership28 CEO REPORT continued Group performance scorecard continued • Focusing on in-country opportunities to leverage off our existing footprint, infrastructure and skills set Pursuing cash-generative acquisition opportunities is part of our growth strategy although opportunistic in nature. However, given our existing capital commitments, further acquisitions at present appear unlikely and would be limited to opportunistic bolt-ons to existing operations, ideally in countries in which we already have a presence. During 2017, we made a judicious return to greenfields exploration with a US$21m investment for a 19.8% stake (partially diluted as at end- December 2017) in ASX-listed Cardinal Resources, which has a number of exploration projects in Ghana. We are looking at accelerating our investments in greenfields exploration in the long term, but this would be limited to countries in which we currently operate. Quality portfolio of assets On an annual basis, all assets in our portfolio are subject to the Group’s strategic planning process. A scenario analysis is conducted for each operation, assessing how to best maximise cash-flow, LoM and margin. The results of this analysis are then used in conjunction with the Group’s capital profile and the current economic environment as inputs into our annual business planning. The following key decisions were implemented with regards to the existing portfolio during 2017: • Reinvestment into Damang in Ghana commenced at the beginning of the year, which will extend the mine’s life to 2025. During 2017, US$115m in project capital was incurred, primarily on waste stripping • A$184m (US$141m) was spent in total on the Gruyere project in Western Australian during 2017, of which A$106m (US$81m) was growth capital and the remainder the deferred portion of the purchase price for our 50% interest in Gruyere. Development of the project is on track and all key contractors have been appointed. Gold Fields has also acquired a 9.9% stake in Gold Road Resources, which holds the other 50% of Gruyere • Gold Fields continued to streamline its portfolio by selling Darlot in Western Australia to Red 5. Red 5 paid for the acquisition through a combination of cash and shares. Gold Fields also partially underwrote a rights issue by Red 5 and now holds a 19.9% share in the company • The sale of the Arctic Platinum Project to CD Capital was concluded in early 2018 for a cash consideration of US$40m and future royalties of 2% • Gold Fields further consolidated its royalty portfolio in 27.9%-held Toronto-listed Maverix Metals The strength of our international portfolio is evident in the continued net cash-flow generation of our mines in Australia, Ghana and Peru, which collectively generated US$369m during 2017 (2016: US$432m). Critically, we announced a successful extension of Cerro Corona’s life to 2030 through work on the tailings facility and the future use of in-pit tailings. The only operating asset in the Group that still needs to be brought to full account is the South Deep project, but management is confident that it will achieve the production and costs targets outlined in the five-year rebase plan. Brownfields exploration and mine development We have made ongoing investment in brownfields exploration at our mines, as well as the development of their ore bodies, strategic priorities. Even in a sustained low gold price environment we would be reluctant to cut development spending on ore bodies as they ensure that these mines have a sustainable future. The costs associated with maintaining the integrity of our ore bodies are built into our mines’ cash-flow models. Gold Fields believes that near-mine exploration offers the best route to low-cost ounce replacement that can generate cash in the short and medium term. In addition to adding to Gold Fields’ Mineral Resource and Mineral Reserve base, near- mine exploration: • Extends the life of the Group’s existing mines • Ensures each region can continue to leverage its infrastructure • Provides a robust platform for regional growth In 2017, Gold Fields spent US$87m on near-mine exploration (2016: US$80m), which supported a total of 754,669 metres of near-mine drilling (2016: 694,527 metres). The majority of this spending – US$75m (A$99m) – was incurred at our Australian mines. US$11m was spent in Ghana, which is significantly higher than the US$3m spent in the region in 2016, amid a renewed focus on extending the life of the Tarkwa mine. For 2018, we have budgeted US$87m for near-mine exploration of which US$66m (A$86m) will be at our Australian operations (including Gruyere). Our Australian mines have successfully extended their lives through a consistent investment in brownfields exploration activities. During 2017, this yielded a number of successful projects: The Gold Fields Integrated Annual Report 201729 • Mine life extension of Agnew through the addition of the Waroonga North ore body • Extension of the Invincible South ore body at St Ives • A potential new ore source at Granny Smith with the Blurry Bif ore body Mineral Resources and Mineral Reserves During 2017, Gold Fields increased attributable gold Mineral Reserves (net of depletion) by 0.89Moz to 49.01Moz and Mineral Resources by 2.27Moz to 103.76Moz. Attributable copper Mineral Reserves totalled 764Mlbs (2016: 454Mlbs) and Mineral Resources 4,881Mlbs (2016: 5,813Mlbs). In Australia during 2017, attributable Mineral Reserves increased by 0.42Moz to 6.18Moz and Mineral Resources by 0.51Moz to 16.00Moz, testament to the continued success of brownfields exploration at the mines. In Ghana, attributable Mineral Reserves now stand at 6.87Moz (2016: 6.98Moz) and attributable Mineral Resources at 13.30Moz (2016: 13.56Moz), while at South Deep attributable Mineral Reserves total 34.02Moz (2016: 34.07Moz) and our attributable Mineral Resources 60.35Moz (2016: 57.48Moz). Gold Mineral Reserves at the Cerro Corona mine in Peru are now 1.93Moz (2016: 1.30Moz) and Mineral Resources 2.53Moz (2016: 2.46Moz). We updated the Mineral Resources position at the Salares Norte project in Chile, following additional drilling and updated resource modelling. At end- December 2017, the project had gold Mineral Resources of 3.66Moz (2016: 3.79Moz) and Silver Resources of 49.46Moz (2016: 43.76Moz). Licence and reputation The success of our business is dependent on our relationships with a number of key external stakeholders that determine both our regulatory and social licences to operate, as well as the reputation we have with these stakeholders. To protect and enhance these relationships we must minimise the impact of our operations through environmental stewardship while ensuring we have ongoing engagement with our stakeholders to create shared value. Finally, our reputation and our ability to fulfil our stakeholder promises requires the highest levels of corporate governance and compliance. During 2017, the Board approved a new sustainable development policy statement that commits Gold Fields “to integrate sustainable development principles into strategy, business planning, management systems and decision-making processes to maintain our licence to operate and leave a positive legacy. The results will be an appropriate balance of the Company’s requirements to perform financially, to manage the environment responsibly and to ensure broad social benefits.” Environmental stewardship Responsible environmental management remains a vital component of Gold Fields’ regulatory and social licence to operate at all our operations and projects. In 2017, we reported two Level 3 environmental incidents (2016: three), one in Australia and one in Ghana (p95). Gold Fields has had no Level 4 or 5 environmental incident for well over seven years. Water is a particular focus of our environmental strategy, as it is becoming an increasingly scarce and expensive resource 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 ensure sustainable production for existing operations and the future viability of projects. During 2017, water withdrawal across the Group increased to 32.99Mℓ (2016: 30,32Mℓ) and water recycled or reused amounted to 43.29Mℓ (2016: 44,32Mℓ). Water withdrawal per ounce was higher at 14.78kℓ/oz in 2017 compared with 13.67kℓ/oz in 2016. Our operations are investing in improving water practices, including pollution prevention, recycling and conservation initiatives. Work carried out by the ICMM on water and tailings management has provided best-practice guidelines to the Company and during 2017 we worked closely to align our practices to ICMM position statements on water and tailings management. We completed internal and external reviews of all our 26 tailings facilities at our mines and projects and are in the process of closing out all the gaps identified by these reviews. The total gross mine closure liability for Gold Fields remained unchanged at $381m in 2017. We plan on further enhancing our integrated approach to mine closure management during 2018 with a focus on progressive environmental rehabilitation, the social impact of closure and full LoM closure obligations. Stakeholder relations Employees, business partners, shareholders and investors, governments and communities have been identified as Gold Fields’ key stakeholders. Their support and acceptance is critical in ensuring that we receive and retain our regulatory approvals and social licence to operate. This can only be achieved if we develop stakeholder relationships that are based on transparent and open engagement The Gold Fields Integrated Annual Report 2017Leadership30 CEO REPORT continued Group performance scorecard continued and if we create shared value for them. The ability to generate cash is critical in distributing the benefits from mining to our stakeholders. In 2017 Gold Fields’ value distribution – as measured by the World Gold Council – totalled US$2.850bn, compared with the US$2.505bn we distributed in 2016. This amount was dispensed as follows during 2017: • US$160m (2016: US$122m) to shareholders and debt providers, who are seeking a return on their invested capital through dividend and interest payments • US$506m (2016: US$482m) to our employees, whose work is rewarded through salaries and other benefits • US$1.857bn (2016: US$1.648bn) to contractors and suppliers, from whom we procure goods and services • US$310m (2016: US$235m) to governments, which grant us our mining licences and who benefit from our tax and royalty payments • US$17m (2016: US$16m) in social investment programmes among our host communities, whose support is critical for our social licence to operate and who benefit significantly through host community jobs and procurement Government relations As the issuers of mining licences, developers of policy and implementers of regulations, host governments at all levels (national, regional and local) are one of Gold Fields’ most critical stakeholders. As such we seek to work closely with them in establishing relationships that benefit the country and impacted communities, while at the same time providing an environment in which our operations can prosper in the long term. These relationships are not always easy, but Gold Fields has mostly found ways of working successfully with governments. During 2017, we commenced our US$341m reinvestment programme in Damang, which created or secured around 1,850 jobs. This decision was taken after we concluded a development agreement with the Ghana government, which provided for fiscal stability. This is what, I believe, is a clear win-win situation for both parties. In South Africa as well we have seen a more engaged approach by government in early 2018, with the advent of the presidency of Cyril Ramaphosa. After years of impasse with government over the implementation of a new Mining Charter to govern the sector, which left the industry no choice but to embark on legal action, fresh talks commenced in March 2018. The negotiations between the new Minister of Mines and the Chamber of Mines, representing industry, are ongoing and now also include community organisations. In Australia, the Western Australian regional government sought to impose higher royalties on the gold sector during 2017. This too was thwarted by an industry publicity campaign that highlighted the adverse economic impact, including job losses that would have resulted from the higher taxes. Our value proposition and relationships with shareholders, investors and employees are discussed elsewhere in this report. Community relations and Shared Value One of the biggest challenges facing mining companies is building relationships and trust with their host communities, without which there is potential for operational disruption, project delays and cancellations – the loss of the social licence to operate referred to previously. Gold Fields has traditionally invested in communities through a range of educational, skills development, health and infrastructure projects and, more recently, through Shared Value-based projects. This approach to structuring our investments in communities ensures that the value created is shared by communities and the business. To date, our regions have implemented six Shared Value projects, ranging from the promotion of mathematics and science education among South Deep’s host communities to multi-lateral water management projects at Cerro Corona. The most high-profile project is the US$21m, three-year upgrade of the dirt road between the Tarkwa and Damang mines in Ghana, which is set to be completed in late 2018. We are working with government agencies in building the road which will significantly improve access for our operations’ host communities. In addition, the bulk of the labour required for completing the project is being sourced from these communities. Host community procurement and employment are perhaps the most impactful of our community investment strategies. At present, host community members account for 28% of our workforce at Cerro Corona in Peru, 16% at South Deep in South Africa and 68% at our two Ghanaian operations. The numbers for host community procurement spend are 7%, 18% and 13% respectively. Gold Fields Australia has also embarked on developing appropriate strategies for its operations, many of which are far away from human settlements and rely largely on fly-in, fly-out workers. The Gold Fields Integrated Annual Report 201731 element of this as it informs ethical decision making in the business and in all dealings with our stakeholders. It is supported by a compliance framework that ensures continued adherence to almost 1,500 statutes that apply to our operations and records the interactions of our employees with all stakeholders. At the same time we are providing employees with greater awareness and knowledge of the regulatory environments in which we operate in to ensure compliance and accountability among our workforce. Gold Fields is proactively looking at ways to further increasing host community employment and procurement opportunities over the next few years, and each operation has set itself targets for 2020. South Deep has set a target of procuring 25%, equivalent to about R500m a year, of goods and services from the mine’s Westonaria host community by 2020, creating around 500 new jobs in the process. We are making good progress in this regard – in 2017 host community procurement spend totalled R448m, the number of host community suppliers to South Deep increased to 88 (2016: 84). Governance and compliance Sound governance, transparency and regulatory compliance are critical enablers for any business, but even more so in the mining industry, which often faces challenging social, economic and political contexts. Equally, Gold Fields’ vision of global leadership in sustainable gold mining requires the highest level of governance and compliance. Governance and reputation are also key drivers of sustainability. Adherence to legislation, controls and standards are a non-negotiable aspect of doing business, while ethical leadership and sound business governance serve to strengthen our reputation and relationships with shareholders, governments, communities and employees. These issues are a key focus area for the Board of Directors and management as it is the foundation of a successful implementation of the strategy of the Company. In South Africa, the King IV Code on Corporate Governance was launched in November 2016. The Gold Fields Board committed to full compliance with the Code and implemented the appropriate policies and actions during 2017 and early 2018. The updated Code of Conduct, which was rolled out at most of our operations last year, is a critical The twin shafts at the South Deep mine The Gold Fields Integrated Annual Report 2017Leadership32 CEO REPORT continued Gold Fields’ strategy on a page Our balanced SCORECARD (BSC) SAFE OPERATIONAL DELIVERY Vision: To be the global leader in sustainable gold mining Medium-term aspiration: AIC of US$900/oz by 2020 Annual target: Free cash-flow margin of 15% at a US$1,300/oz gold price The Gold Fields Values: How we do things 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 Delivery we strive for excellence and do what we say we will do Innovation We encourage innovation and an entrepreneurial spirit Responsibility We responsibly manage our impact on the environment and host communities STRATEGIC OBJECTIVE Maximise total shareholder return sustainably LICENCE AND REPUTATION CAPITAL DISCIPLINE PORTFOLIO MANAGEMENT Enablers: Finance and accounting Fit-for-purpose operating model and structures Effective leadership Right workforce structure Innovation and technology Governance and compliance The Gold Fields Integrated Annual Report 201733 What we want to achieve STRATEGIC GOALS How we'll achieve it STRATEGIC INITIATIVES at US$1,300/oz ➊ Deliver FCF margin of 15% ➋ Safely meet guidance ➌ Safely deliver strategic for operations projects º Safe operational delivery • Deliver South Deep, Gruyere and Damang • Reduce energy and water costs and secure supply • Meet guidance by following mine plan which aligns with strategic plan • Leverage culture to drive delivery • Embed Zero Harm mindset • Ensure we have the right people in the right roles doing the right things PERFORMANCE We measure our performance against the four pillars of our strategy using our BSC (see the next page) ➍ Manage balance sheet and maximise capital returns º Capital discipline • Allocate capital in line with strategic priorities as per capital ranking ➎ Improve quality of our portfolio ➏ Protect licence to operate and enhance reputation º Portfolio management • Use portfolio management and strategic planning to inform acquisitions and disposals • Life extension through brownfields exploration, mergers and acquisitions (M&A) and optimisation • Implement business improvement and efficiency projects to reduce costs • Reduce costs through innovation and technology (I&T) projects º Licence and reputation • Enhance reputation through community, environmental and safety programmes that enhance the lives of our people • Enhance governance and compliance • Build confidence with analysts and investors • Enhance reputation with stakeholders through Shared Value initiatives Enablers: Finance and accounting Effective leadership Right workforce structure Innovation and technology Fit-for-purpose operating model and structures Governance and compliance The Gold Fields Integrated Annual Report 2017LeadershipCEO REPORT continued 34 2018 BSC TARGETS SAFE OPERATIONAL DELIVERY Gold Fields’ strategy on a page Our balanced SCORECARD (BSC) What we want to achieve STRATEGIC GOALS How we'll achieve it STRATEGIC INITIATIVES SAFE OPERATIONAL DELIVERY STRATEGIC OBJECTIVE Maximise total shareholder return sustainably CAPITAL DISCIPLINE PORTFOLIO MANAGEMENT Vision: To be the global leader in sustainable gold mining Medium-term aspiration: AIC of US$900/oz by 2020 Annual target: Free cash-flow margin of 15% at US$1,300/oz gold price The Gold Fields Values: How we do things 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 Delivery we strive for excellence and do what we say we will do Innovation We encourage innovation and an entrepreneurial spirit Responsibility We responsibly manage our impact on the environment and host communities at US$1,300/oz ➊ Deliver FCF margin of 15% ➋ Safely meet guidance ➌ Safely deliver strategic for operations projects º Safe operational delivery • Deliver South Deep, Gruyere and Damang • Reduce energy and water costs and secure supply • Meet guidance by following mine plan which aligns with strategic plan • Leverage culture to drive delivery • Embed Zero Harm mindset • Ensure we have the right people in the right roles doing the right things ➍ Manage balance sheet and maximise capital returns º Capital discipline • Allocate capital in line with strategic priorities as per capital ranking ➎ Improve quality of our portfolio º Portfolio management • Use portfolio management and strategic planning to inform acquisitions and disposals • Life extension through brownfields exploration, mergers and acquisitions (M&A) and optimisation • Implement business improvement and efficiency projects to reduce costs • Reduce costs through innovation and technology (I&T) projects º Licence and reputation • Enhance reputation through community, environmental and safety programmes that enhance the lives of our people • Enhance governance and compliance • Build confidence with analysts and investors • Enhance reputation with stakeholders through Shared Value initiatives LICENCE AND REPUTATION ➏ Protect licence to operate and enhance reputation Enablers: Finance and accounting Fit-for-purpose operating model and structures Effective leadership Right workforce structure Innovation and technology Governance and compliance Our Balanced Scorecard is derived from and aligned to our business strategy • Production and AIC/oz better than yearly guidance with spatial compliance to plan • No fatalities and a reduction in TRIFR by 10% in the long term (due to regression in 2017, stretch target is 12% for 2018) • Implement ICMM critical control guidelines on safety, health and environmental stewardship and stakeholder management • Project delivery: deliver Damang, South Deep and Gruyere in accordance with key metrics for 2018 year • Manage talent pipeline and succession cover • Reduce energy usage by 5% to 10% for critical roles against a future baseline through energy saving initiatives and implement renewable energy initiative at South Deep • Reinvigorate vision and values to a winning culture that rewards teamwork and delivery of Group strategy CAPITAL DISCIPLINE • Pay dividends in line with policy • Maintain net debt to EBITDA ratio of under 1.25x and extend debt maturity PORTFOLIO MANAGEMENT • Deliver life extension, cost reduction, revenue enhancement and improved health and safety through innovation and technology and business improvement initiatives • Reduce Group LoM AIC/oz and increase reserve life per region through brownfields exploration, M&A and optimisation of existing mines LICENCE AND REPUTATION • Improve total shareholder return by positioning share price between median and upper quartile of peer group • Increase the proportion of sustainable host community procurement and employment to drive Shared Value • No Level 3 or above environmental incidents and a 10% reduction in Level 2 incidents • All new capital spend to have appropriate returns taking into account risks and cost of capital ranked and prioritised in accordance with an agreed matrix and in line with internal capital control standards and study guidelines. Accordingly all growth capital expenditure on existing mines, new projects or acquisitions to have hurdle rates of 15% at a US$1,300/oz gold price • Deliver positive Salares Norte feasibility project that exceeds metrics set for the project • Mine closure costs, along with concurrent rehabilitation plans, incorporated into strategic plans • Align management practices with ICMM tailings and water position statements • Deliver and manage a robust and transparent group governance and compliance programme • Maintain position in top five of the Dow Jones Sustainability Index The Gold Fields Integrated Annual Report 201735 Strategy overview Gold Fields seeks to be a low-cost gold producer that secures sustainable cash-flow through the inevitable economic cycles in the gold mining industry. Through this, we can deliver superior returns when the gold price is high, and offer a degree of protection when the price falls, ensuring that we are able to maintain our business with healthy margins. At the same time, sound cash-flow enables us to manage our debt, invest in the right assets and distribute the benefits of mining to our stakeholders. These economic realities inform our long-term vision of global leadership in sustainable gold mining, and our target of achieving a 15% free cash-flow (FCF) margin at a gold price of US$1,300/oz. As part of our medium-term planning, and in line with our key focus on cash margins, we have set a strategic aspiration of operating at Group AIC of US$900/ oz or lower by 2020. To achieve our targets, we need to meet our strategic objective of maximising total shareholder returns sustainably, and to this end have developed four strategic pillars: 1. Safe operational delivery – how we make money (p42) 2. Capital discipline – how we spend money (p68) 3. Portfolio management – what we choose to invest in (p78) 4. Licence and reputation – how we conduct ourselves (p92) Within each of these pillars, we have selected a number of strategic focus areas for 2018. These in turn will be delivered through strategic initiatives, the success of which will be measured by the Group Balanced Scorecard metrics. The achievement of these metrics determines the bonuses and annual salary increases for our management teams at Group, regional and mine level. The strategic focus areas and initiatives for each of the four strategic pillars are discussed in more detail below. 1. Safe operational delivery This strategic pillar drives the consistent operational delivery of our assets in a safe, healthy and sustainable manner. The three strategic focus areas within this pillar are to: • Deliver FCF margin: delivering the targeted FCF margin at our existing operations enhances shareholder value by not only buffering the effects of a depressed gold price, but also offering exponential value under a favourable gold price environment. It also provides us with greater flexibility to allocate cash efficiently to manage our balance sheet and continually upgrade the assets in our portfolio • Safely meet guidance for operations: by safely meeting our annual guidance, we seek to protect the safety and wellness of our employees, ensure our yearly FCF margin targets are met and secure our mines’ longer-term sustainability • Safely deliver strategic projects: our major growth projects – the South Deep rebase plan, Gruyere, Damang Reinvestment and Salares Norte – have been identified as value-accretive assets for the Company. These projects will increase the overall life of our portfolio, drive down costs and meet our key objective of upgrading the portfolio of assets. Delivering safely on these projects is thus a key strategic imperative We will continue to embed a zero-harm mindset across the Company. Safety and wellness remains our number one value and safeguarding the lives and the health of our people is critical from a moral perspective as well as a commercial one as it also protects against the risk of safety-related stoppages. Each operation needs to meet guidance by following its mine plan. In the past five years, we have evolved our strategic and mine planning approach considerably to ensure ever-closer alignment with the achievement of our strategic objectives. By focusing on margin and reserve life when undertaking operational planning, and by closely following the mine plans, we believe the mines will meet guidance and be sustainable for the foreseeable future. Off the back of this protocol, the Company has met its production and cost guidance for the past five years. Water and energy costs and supply are critical inputs for our operations, and account for about a quarter of operating costs. In the year ahead, we will continue to roll out initiatives to both manage water and energy costs, and secure their long-term supply. This is not only an operational imperative, but is aligned to our objective of being a responsible company. People play a central role in ensuring safe operational delivery. Our key human resources initiatives are to leverage culture to drive delivery, and to ensure we have appropriately skilled people in the right roles. 2. Capital discipline Capital discipline requires us to invest our money wisely and deliver superior returns to investors. This is done through the conservative management of our balance sheet, paying dividends, reinvesting in our mines and acquiring assets to upgrade our portfolio. This is the strategic focus area in the capital discipline pillar. Our aim is to limit the increase in our net debt/EBITDA ratio to 1.25x during 2018, which takes into account the significant investments required at both Damang and The Gold Fields Integrated Annual Report 2017Leadership36 CEO REPORT continued Strategy overview continued Gruyere. In the medium term, we seek a return to a ratio of 1.0x. At the same time, we need to reinvest in the business and look for new opportunities, as has been done in the past years, but we will only do so if such reinvestment drives the sustainable achievement of our targeted AIC. 3. Portfolio management Our portfolio of assets is one of the few ways we can differentiate ourselves from peers in the gold mining industry. A strategic planning process provides visibility on production and cash-flow over the life-of-mine (LoM) for each of our operations and informs our decisions on whether and when to dispose of, acquire, invest in or otherwise optimise assets. A project and capital ranking curve helps us invest in those assets that will meet the Company’s required investment hurdle rates. Our strategic focus area in this pillar is to improve the quality of our portfolio. We define a quality portfolio as one that delivers life and cash-flow margin in a sustainable manner to maximise returns. The strategic initiatives that will drive this include: • Implementing business improvement and efficiency projects to reduce costs • Using the portfolio management and strategic planning process to inform acquisitions and disposals • Extending life through brownfields exploration and value-accretive mergers and acquisitions (M&A) • Reducing costs, improving efficiencies and safety through a focus on innovation and technology 4. Licence and reputation Governance and reputation are key drivers of sustainability. Adherence to legislation, controls and standards are a non-negotiable aspect of doing business, while ethical leadership and sound business governance serve to strengthen our reputation and relationships with shareholders, governments, communities and employees. Responsibly managing our environmental impact and building positive and mutually supportive relationships with host communities are important focus areas, and ones that also serve to meet the increasing demands of environmental, social, governance- focused investors. Our strategic focus area within the licence and reputation pillar is to maintain our licence to operate and enhance our reputation. The strategic initiatives to support this include: • Building confidence with analysts and investors • Enhancing governance and compliance • Strengthening our reputation through Shared Value initiatives and through community, environmental and safety programmes that improve the lives of our stakeholders Construction and civil works at the Gruyere project in Western Australia The Gold Fields Integrated Annual Report 201737 The road ahead for 2018 and beyond As outlined in the preceding text, the main objective underpinning Gold Fields’ strategy is to generate sustainable cash-flow and superior margins. To continue expanding margins and distributing cash, the long-term sustainability of the business must be kept intact. This requires investing to extend the life of our assets, ensuring we maintain our social licence to operate and retaining our people who are key to the success of our business. The challenge facing Gold Fields’ management is, therefore, to balance distributing the cash we generate with reinvesting into our assets, to ensure that our portfolio of mines continues to generate cash sustainably into the foreseeable future. 2018 is the second year of our reinvestment programme, the benefits of which will be realised in the years to follow. In addition to the cash-generative mines within the portfolio, the Company now has development and growth projects in each of the four regions in which it operates. In South Africa, we have South Deep, which is still a mine in the build-up phase, with significant growth opportunities over its current 78-year LoM. In Ghana, the reinvestment at Damang is essentially the equivalent of developing a new mine, while our investment in the Gruyere joint venture will lead to the construction of a new mine in Western Australia, with first production scheduled in early 2019. Finally, in the Americas region, we are set to conclude the feasibility study on the Salares Norte project in northern Chile by late- 2018. These projects are important in terms of their contribution to the strategic objectives of Gold Fields, namely to maintain and grow cash-flow on a sustainable basis. They are all forecast to operate at an AIC that is lower than the current AIC of the Group, once steady-state levels of production are realised. As such, the Group’s overall cost of production will reduce over time, and the quality of the portfolio will improve. At South Deep, we announced a five-year rebase plan in February 2017. This plan is set to position the mine at a steady-state production of approximately 500,000oz per year by 2022, at an AIC (in 2017 terms) of R410,000/kg. While the mine fell short of the plan’s first-year targets in 2017, the integrity of the rebase plan remains intact. The Damang project has projected AIC and AISC, including upfront capital development, of US$950/oz and US$700/oz, respectively. While Gruyere is projecting AIC of A$1,130/oz (US$805/oz) and AISC of A$945/oz (US$690/oz), including upfront capital. The delivery of both these projects remains on track. Although the Salares Norte feasibility study is still to be concluded, early indications are that AIC will be comfortably below current Group levels, due to the high grades and the fact that this will be an open-pit operation. We continue to invest in brownfields exploration in Australia with the objective of not only replacing what we mine each year, but also increasing our Mineral Resources and Reserves at a higher quality than what has been mined previously. Finally, we need to optimally manage the ore bodies of our operating mines in terms of grade management and ongoing sustainable capital expenditure by planning for outcomes that optimise the life of these ore bodies. A key element of the Group’s underlying strategy, which has contributed towards improving the quality of the portfolio over the years, is value-accretive M&A. For an asset to be considered as an acquisition target, it must meet the following criteria: • Quality: The asset must improve the Group’s AIC and must generate a sound FCF margin in line with our strategy and aspiration • Jurisdiction: It must be located in a geography that Gold Fields is comfortable to operate in, preferably countries where we already have a presence • Life: The asset must increase our overall reserve life per operation and have a minimum life of eight years Given the amount of capital that has been committed to Gruyere, Damang, South Deep and Salares Norte, management has decided only to pursue smaller-scale, opportunistic acquisitions. In time, and once we have delivered on these growth projects, Gold Fields will maintain its disciplined approach to any corporate activity and will strictly adhere to the investment criteria set out above. The Gold Fields Integrated Annual Report 2017Leadership38 CEO REPORT continued The road ahead for 2018 and beyond continued I am confident that Gold Fields has put in place the strategies that will ensure sustained value creation in the medium to long term and will see the Company through the vagaries of the gold price cycle. I believe that this strategy is gradually being recognised by investors. Executive management has aligned itself with investors through its long-term incentive scheme, a large portion of which relates to the performance of the share price over time. If we stay the course on which we have embarked, I am confident that the share price will continue to reflect the strong operational performance of the Company, its strong cash- flow generation and its significant investment in its future profitable growth. Gold price outlook During 2017 the average US Dollar gold price improved marginally to US$1,255/oz from US$1,241/oz. It has maintained steady gains for the first two months of 2018. Economists credit gold’s recent stronger performance to three main factors: • A weaker US Dollar • High assets prices, particularly equities, which led many investors to add gold to their portfolio for fear of a market correction in these assets • Geopolitical instability has heightened investor uncertainty and fuelled investment into gold, though not as large as many had expected early in the year Despite these factors, we remain cautious about gold’s short-term performance. Recent tax liberalisation in the US is likely to lead to continued inflows into equity markets and further US interest rate hikes. This has traditionally been bearish for gold. Gold Fields is thus planning its business for 2018 on the assumption of a US$1,200/oz gold price. Our longer-term outlook, however, is more optimistic and has not changed much from previous years. While gold prices in the short term will be largely dictated by macro events, in the longer term supply and demand fundamentals cannot be ignored. On the supply side, research we have undertaken indicates that primary gold supply is close to a peak and likely to decline in the years to come. This is predominantly due to the cut in exploration spending as well as the dearth of new mines being built, and exacerbated by the decline in grades and the increasing depth and complexity of the ore bodies being mined. Demand in India and China, while significantly down on its highs over the last five years, should remain strong given economic growth, rising urbanisation and traditional affinity towards gold in these countries. Central banks continue to buy and it appears that most of the central banks that were looking to sell gold have already done so. These factors bode well for the long- term future of gold, although the price will undoubtedly move through cycles with the attendant volatility. While some have questioned the continued safe-haven status of gold in times of political and economic uncertainty, we believe that the longer-term effects of the current geopolitical turmoil will help to support the price. Investors will continue to diversify some of their risk into gold, both as a hedge against inflation and currency volatility. Guidance for 2018 Gold Fields’ business plan for 2018 had been built around an average gold price of US$1,200/oz (A$1,600/oz, R525,000/kg). The growth capital investment in our business remains a priority for 2018, which includes US$36m for South Deep (2017: US$17m), US$105m for Damang (2017: US$115m), US$145m for our 50% share in Gruyere (2017: US$81m) and US$83m for Salares Norte (2017: US$53m). Total capital expenditure for the year is forecast at US$835m (2017: US$840m). As a result, our AIC cost guidance for 2018 is US$1,190/oz – US$1,210/oz compared to US$1,088/oz reported for 2017. The guidance for AISC is US$990/oz – US$1,010/oz compared to US$955/oz in 2017. Our production guidance for the year is 2.08Moz – 2.10Moz, compared with the 2.16Moz achieved in 2017. The changes for 2018 are due to: • A gradual improvement in production at South Deep from 281koz in 2017 to 321koz in 2018 • A rise in Damang’s production to 160koz from 144koz in 2017 but lower output from Tarkwa • Stable production profiles at our three Australian mines, with Darlot no longer part of the portfolio • A decline in gold-equivalent production at Cerro Corona from 307koz in 2017 to 280koz in 2018, due to expectations of a lower copper price The Gold Fields Integrated Annual Report 201739 Note of thanks I would like to express my gratitude to my fellow directors, led by our Chairperson, Cheryl Carolus, for their support and guidance during 2017. I also welcome Carmen Letton to the Board. She joins the other five new directors who have been appointed over the past two years. The Board’s skills set has been strengthened through our new directors who will guide and support Gold Fields in the next stage of its journey, namely its investment drive to sustain the portfolio of assets for the long term. I want to pay a special tribute to Gayle Wilson, who retired as Chairperson of the Audit Committee and the Board in May 2017. She was a director of Gold Fields for nine years and the input she provided played a major part in achieving the quality and transparency of reporting and accounting for which Gold Fields has been widely recognised. The composition of the Executive Committee changed during 2017 with the appointment of two new regional heads for our Australia and South Africa regions. In February, Stuart Mathews, our previous Head of Operations in the Australia region, took over as EVP from the retiring Richard Weston, while in March Martin Preece replaced Nico Muller as EVP for South Africa. Nico left to lead Impala Platinum as CEO. Subsequent to year-end, we also recruited Rosh Bardien, the previous GM: HR and Transformation, at ArcelorMittal SA, as EVP, People and Organisational Effectiveness. Rosh replaces Lee-Ann Samuel, who also left the Company last year. I would like to thank Lee-Ann, Richard and Nico for their contribution. I would also like to thank my colleagues on the Executive Committee for their continued leadership and commitment to Gold Fields. Most importantly, I would like to express my sincere appreciation and gratitude to all the employees of Gold Fields. We run a tight ship and this requires resilience, commitment and long hours from every member of the team. I attribute the operational and sustainable financial success of the Group – in a low gold price environment – largely to their hard work and dedication. As we embark on the second year of our investment drive to secure the long-term future of the Company, it gives me great comfort to know that I have this team behind me. Nick Holland CEO Work at the Damang pit cutback project The Gold Fields Integrated Annual Report 2017LeadershipCEO REPORT continued 40 The mine of the future Gold mining remains relevant and valuable in today’s global economy. But for mines in the industry to prosper in the long term they have to fundamentally transform themselves into mines of the future – mines that are sustainable and create value for all their stakeholders. 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 the discovery of gold to its 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. All the while, governments and communities are demanding greater benefits. Given these industry trends, and in the wake of a gold price that has declined by around 30% since its peak in September 2011, it’s not surprising that the sector has seen shareholder value slump significantly over the past 10 years. At Gold Fields, we have 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 sound governance and transparency. The key operational challenges confronting gold mining can be grouped under a number of 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 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 number of technology companies are working on software to advance 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. Gold Fields has started embarking on this course of action. At our Australian mines, we collect vast amounts of data from a number of sources, such as sensors fitted on machinery and equipment and drones that scan our large tenements. This information is then used for a number of projects and applications, such as aerial magnetic surveying, remote fleet management and remote loading, among others. Similarly we are using “Big Data” for an increasing number of applications at our South Deep mine in South Africa. Through telemetry nodes that transmit real-life information we can check the status of equipment and, most critically, inform our underground staff to leave the mine in case of possible emergencies. Remote control operations are also being installed, such as those used for rock-crushing at our ore passes, which are dangerous when undertaken by employees nearby. A further feature of the mining industry’s technological transformation will be ever closer co-operation with original equipment manufacturers (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 and 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 historically overwhelmingly conventional. But we are making gradual progress in setting the base for what could well be the country’s last major gold mine. A detailed update on Gold Fields’ innovation and technology strategy and implementation can be found on p67. The Gold Fields Integrated Annual Report 201741 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. Without 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 community members for the new mine, but where we also encourage 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 benefit mines provide to society are job creation together with tax and royalty payments. 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 benefit from the creation of sustainable value. 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. The fourth area of focus for the mine of the future is transparency, in operational and financial performance, social development, 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 the 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. This is a summary of a presentation I gave at the 120th anniversary of the Mining School of the University of the Witwatersrand, Johannesburg, on 24 March 2017. Operator drilling at the South Deep mine in South Africa The Gold Fields Integrated Annual Report 2017LeadershipMachine operator at South Deep Good Health and Wellbeing Decent Work and Economic Growth Industry, Innovation and Infrastructure Responsible Consumption and Production Climate Action Key measurements – Safe operational delivery 2017 Status 2016 2015 2014 2013 Total Recordable Injury Frequency Rate (TRIFR) (rate per million) Fatalities Gold production – attributable (koz) Revenue (US$m) All-in sustaining cost (AISC) (US$/oz) All-in cost (AIC) (US$/oz) Average gold price received (US$/oz) Cost of sales before amortisation and depreciation (US$m) Headline earnings/(loss) (US$m) Normalised earnings (US$m) Net cash (outflow)/inflow (US$m) Free cash-flow (FCF) margin (%) 2.42 3 2,160 2,811 955 1,088 1,255 1,404 210 154 (2) 16 2017 performance improvement on 2016 or achievement in line with strategy 2017 performance drop against 2016 2017 performance on par with 2016 2.27 1 2,146 2,750 980 1,006 1,241 1,388 204 186 294 17 3.40 3 2,159 2,545 1,007 1,026 1,140 1,456 (33) 39 123 8 4.04 3 2,219 2,869 1,053 1,087 1,249 1,678 27 85 235 13 4.14 2 2,022 2,906 1,202 1,312 1,386 1,667 (71) 58 (235) n/a Attributable gold production 2.16Moz Introduction Operational performance Safety Health Fit-for-purpose workforce Energy management Innovation and technology p44 p45 p50 p53 p56 p61 p66 Safe operational delivery In order to deliver sustainable financial returns, we remain focused on running our operations safely and cost effectively. To deliver on our strategic promises, we need the right people with the right skills, ongoing investments in technology and an innovative approach to energy and carbon management Results and impact Strategic responses – how we will achieve this • Deliver South Deep, Gruyere and Damang • Reduce energy and water costs and secure supply • Meet guidance by following mine plan which aligns with strategic plan • Leverage culture to drive delivery • Embed Zero Harm mindset • Ensure we have the right people in the right roles doing the right things Key initiatives Related risks Key stakeholders • Production and cost/oz better than yearly guidance with spatial compliance to plan • No fatalities and a reduction in TRIFR by 10% in the long term • Reduce energy usage by 5% to 10% against a future baseline through energy saving initiatives and implement renewable energy initiative at South Deep • Implement ICMM critical controls guidelines on safety, health and environmental stewardship and stakeholder management • Project delivery: deliver Damang, South Deep and Gruyere in accordance with key metrics for 2018 year • Manage talent pipeline and succession cover for critical roles • Reinvigorate vision and values to a winning culture that rewards teamwork and delivery of Group strategy • South Deep – Partial achievement of the production targets as defined in the rebase plan and the associated loss of investor confidence • South Deep – Logistics and utilities infrastructure • Non-delivery of Damang reinvestment and Gruyere projects • Safety and health of our employees • Attraction and retention of skills Consecutive five years of exceeding or meeting cost and production guidance Employees Communities Governments Shareholders and investors 44 during 2017, with solid operational and cost performances which contributed to strong overall results for the Group. While cash generation has remained a core attribute in all strategic decisions, management is cognisant that the sustainability of this cash generation is vital. As such, the longevity of our portfolio was addressed during 2017 through a number of investments: • A$184m (US$141m) was spent on the Gruyere project in Western Australia. A$106m (US$81m) of this was project capital, with the bulk of the remaining A$78m (US$60m) relating to cash calls on the deferred Gruyere purchase consideration. This is a 50:50 joint venture with Gold Road Resources. See p84 • US$115m in project capital was spent at our Damang mine in Ghana. See p81 • Near-mine exploration spending of A$99m (US$75m) in Australia (including Gruyere) and US$11m in Ghana. See p86 • US$53m investment on further exploration and drilling at Salares Norte in Chile. See p85 In 2017, Gold Fields’ attributable gold-equivalent production increased to 2.16Moz (2016: 2.15Moz), beating the upper end of guidance. This performance takes into account the loss of Darlot’s contribution in Q4 2017 – when its sale took effect – and reflects an improved performance across the portfolio, with South Deep being the exception. INTRODUCTION Gold Fields has consolidated its position as a more focused, leaner business with a portfolio that is characterised by modern, fully mechanised underground and open-pit mines, as well as a number of projects that will ensure the long-term sustainability of the Company. The production base is geographically diversified with seven mines and two development projects in four regions. Gold Fields’ broader strategy is focused on cash generation and capital discipline rather than ounces for ounces’ sake. This focus has enhanced the Group’s ability to generate free cash-flow (FCF) and provide investors leverage to the gold price through dividends and share price performance. Our six operating mines in Ghana, Australia and Peru lived up to this mandate Group production overview 2018 Guidance Prod (Moz) AIC (US$/oz) 2017 Actual Prod (Moz) AIC (US$/oz) 2017 Guidance Prod (Moz) AIC (US$/oz) 2016 Actual Prod (Moz) AIC (US$/oz) Group 2.08 - 2.10 1,190 - 1,210 2.16 1,088 2.10 - 2.15 1,170 - 1,190 2.15 1,006 Central to Gold Fields’ strategy of growing our margin and maximising FCF, is a relentless focus on managing costs on an all-in cost (AIC) basis. The Group recorded AIC of US$1,088/oz in 2017, which was lower than guidance (US$1,170/oz – US$1,190/oz), but higher than the US$1,006/oz recorded in 2016. The year-on-year increase in AIC was driven by the capital expenditure at Gruyere, Damang and South Deep as well as continued exploration spending at Salares Norte. Group AISC decreased to US$955/oz from US$980/oz in 2016, and was significantly lower than guidance of US$1,010/oz – US$1,030/oz. During 2017, Gold Fields increased the capital expenditure levels deemed critical for the longevity of the portfolio. With the focus on extending the life of our ore bodies at all our international mines, Group capital expenditure increased to US$840m (2016: US$650m). This comprises sustaining capital of US$623m (including near-mine exploration of US$87m), equivalent to US$288/oz, and project capital of US$217m. Regional sustaining capital expenditure included: • Australia: Our Australian mines decreased capital expenditure to A$423m (US$324m) in 2017 from A$431m (US$322m) in 2016, with near-mine exploration spending coming in at A$99m (US$75m) in 2017 (2016: A$102m (US$76m)) • South Africa: Sustaining capital expenditure at South Deep decreased to R874m (US$66m) in 2017 from R1,030m (US$70m) in 2016 • South America: At Cerro Corona capital expenditure declined to US$34m in 2017 from US$43m in 2016. The decrease was mainly due to lower expenditure on the construction of the tailings dam and waste storage facilities • West Africa: Sustaining capital expenditure declined to US$198m (2016: US$206m) The Gold Fields Integrated Annual Report 201745 OPERATIONAL PERFORMANCE Regional performance Americas region Production overview Gold-only production Copper production Gold-equivalent production AIC/AISC1 AIC/AISC eq-oz 2018 Guidance 2017 Actual 2017 Guidance 2016 Actual koz kt koz US$/oz US$/oz 145 30 280 585 810 159 30 307 203 673 152 28 290 620 780 150 31 270 499 762 1 Significant variances due to movements in the copper price. Copper revenue is viewed as a buy-product revenue for purposes of AIC/AISC calculations, in line with the World Gold Council definition Cerro Corona in Peru had a solid year, with total managed gold- equivalent production increasing 14% year-on-year to 307koz in 2017 (2016: 270koz), mainly as a result of the improved copper to gold price ratio, higher gold head grades treated and better gold recoveries. This was 6% higher than the gold-equivalent production guidance for the year of 290koz. Cost of sales (before amortisation and depreciation, including gold-in- process movements) increased by 10% to US$154m in 2017 from US$140m in 2016. The higher costs were mainly due to a US$3m draw-down of concentrate inventory compared to a US$4m build-up in 2016, higher expenses associated with the increase in tonnes mined and higher power costs. Capital expenditure decreased by 21% to US$34m in 2017 from US$43m in 2016, mainly due to lower expenditure on the tailings dam and waste storage facilities during 2017 compared to 2016. AISC and AIC were US$203/oz in 2017 compared to US$499/oz in 2016 and, on a gold equivalent basis, US$673/oz in 2017 (2016: US$762/oz). The decrease in AISC and AIC was primarily due to higher by-product credits, lower sustaining capital expenditure and higher gold sold, partially offset by higher costs of sales. Critically, we announced a successful extension of Cerro Corona’s life to 2030. The life extension is to be achieved by a combination of a higher density factor and an increase in the dam walls of the current tailings dam to 3,803m above sea level (which adds two years to the existing tailings storage facility) and in-pit tailings (which adds five years). The region reported net cash inflow of US$117m during 2017. 2018 guidance: • Gold only production: 145koz • Copper production: 30kt • Gold-equivalent production: 280koz • AISC/AIC: US$585/oz • AIC/AISC (Au-eq): US$810/oz Tailings storage facility at Cerro Corona The Gold Fields Integrated Annual Report 2017Safe operational deliveryOPERATIONAL PERFORMANCE continued 46 Australia region Production overview St Ives Agnew Granny Smith Darlot1 Region ¹ Darlot Q1 – Q3 2017 2018 Guidance Prod (koz) AISC/AIC (A$/oz) 2017 Actual 2017 Guidance 2016 Actual Prod (koz) AISC/AIC (A$/oz) Prod (koz) AISC/AIC (A$/oz) Prod (koz) AISC/AIC (A$/oz) 360 230 275 Sold 865 1,250 (US$1,000) 1,310 (US$1,050) 1,240 (US$990) Sold 1,263 (US$1,010) 364 241 290 39 935 1,198 (US$916) 1,276 (US$977) 1,171 (US$896) 1,874 (US$1,432) 1,239 (US$948) 360 220 278 52 910 1,325 (US$970) 1390 (US$1,020) 1,215 (US$890) 1,755 (US$1,285) 1,332 (US$977) 363 229 284 66 942 1,273 (US$949) 1,301 (US$971) 1,119 (US$834) 1,662 (US$1,238) 1,261 (US$941) Gold Fields’ Australian operations delivered another strong operational performance in 2017. Gold production of 935koz at AIC of A$1,239/oz (US$948/oz) was better than full year guidance of 910koz at an AIC of A$1,332/oz (US$977/oz), despite the sale of Darlot, which was completed on 2 October 2017. Granny Smith, St Ives and Agnew all outperformed both production and cost guidance, while Darlot was on track to achieve guidance before being sold. Production was only 1% lower than in 2016 (942koz), despite the loss of fourth quarter output from Darlot. Costs of sales decreased by 2% to A$675m (US$517m) in 2017 from A$689m (US$514m) in 2016 as a consequence of more material mined than processed, partially offset by increased mining volumes. Capital expenditure decreased to A$423m (US$324m) from A$431m (US$322m). The Australia region reported a net cash inflow of US$187m in 2017 compared to US$256m in 2016. The lower cash-flow was mainly due to an increase in tax payments to A$171m in 2017 (2016: A$92m). Mine performances At St Ives the Invincible complex continued to be the main source of production during 2017. The Drake and Fenton underground portals at Invincible were blasted in July and first ore at Invincible Underground was intersected in December. The Invincible open pit will continue to operate in 2018 but will be phased out by end-2019, at which point Invincible underground and the Neptune open pit will be the main sources of ore at St Ives. Production increased marginally to 364koz in 2017 from 363koz in 2016, and came in slightly ahead of guidance of 360koz. Cost of sales decreased by 15% to A$207m (US$159m) in 2017 from A$244m (US$182m) in 2016, mainly due to a gold inventory credit of A$38m (US$29m) in 2017 compared to a credit of A$15m (US$11m) in 2016. In addition, mining costs decreased by A$19m (US$14m) in 2017 on the back of reduced operational tonnes mined from the open pits together with cost improvements at the open pits and Hamlet underground. Capital expenditure increased 9% to A$204m (US$156m) during 2017 from A$188m (US$140m) in 2016, with A$21m (US$16m) incurred at the new Invincible underground mine. AISC and AIC decreased 6% to A$1,198/oz (US$916/oz) in 2017 from A$1,273/oz (US$949/oz) in 2016 and were 10% below full year guidance of A$1,325/oz (US$970/oz). St Ives generated net cash-flow of US$125m for the year. A review of the mine’s brownfields exploration activity in 2017 is on p86. 2018 guidance: • Gold production: 360koz • AISC/AIC: A$1,250/oz (US$1,000/oz) The Gold Fields Integrated Annual Report 201747 At Agnew, gold production increased 5% to 241koz in 2017 from 229koz in 2016, and was 10% higher than guidance of 220koz. The higher production was mainly due to higher tonnes mined and processed. Costs of sales increased 4% to A$197m (US$150m) in 2017 from A$189m (US$141m) in 2016 due to higher mining costs, which resulted from a 16% increase in ore development metres. AISC and AIC decreased to A$1,276/oz (US$977/oz) in 2017 from A$1,301/oz (US$971/oz) in 2016, due to higher gold sold, partially offset by higher net operating costs and capital expenditure. Capital expenditure increased by 2% to A$96m (US$74m) in 2017 from A$94m (US$70m) in 2016, driven by the purchase of a crushing facility for A$5m (US$4m) in 2017. Agnew generated net cash-flow of US$76m in 2017. A review of the mine’s brownfields exploration activity in 2017 is on p86. 2018 guidance: • Gold production: 230koz • AISC/AIC: A$1,310/oz (US$1,050/oz) At Granny Smith, production increased by 2% to 290koz in 2017 from 284koz in 2016, and was 4% ahead of guidance for the year. Costs of sales increased 17% to A$210m (US$160m) in 2017 from A$179m (US$134m) in 2016 due to higher volumes mined and a gold-in-process charge in 2017 compared with a credit in 2016. AISC and AIC of A$1,171/oz (US$896/oz) in 2017 compared with A$1,119/oz (US$834/oz) in 2016, with the increase driven by higher cost of sales, partially offset by higher gold sold and lower capital expenditure. Capital expenditure was 6% lower in 2017 at A$114m (US$87m), with the majority of the expenditure related to capital development and infrastructure at the Wallaby mine, exploration and the purchase of mobile equipment. The mine development programme saw around 10km of horizontal capital development advanced, providing access to lower ore horizons at Zone 110/120. Following a positive feasibility study of Zone 110/120 an extension at depth to the Wallaby mine was approved. Granny Smith generated net cash-flow of US$125m in 2017. A review of the mine’s brownfields exploration activity in 2017 is on p86. 2018 guidance: • Gold production: 275koz • AISC/AIC: A$1,240/oz (US$990/oz) Darlot produced 39koz in the nine months to end-September before being sold to Australian mining group Red 5. As part of the sale agreement Gold Fields has taken a 19.9% stake in Red 5, thereby maintaining exposure in Darlot. The Neptune pit at the St Ives mine in Western Australia The Gold Fields Integrated Annual Report 2017Safe operational deliveryOPERATIONAL PERFORMANCE continued 48 South Africa region 2018 Guidance 2017 Actual 2017 Guidance 2016 Actual Production overview Prod (kg) AIC (R/kg) Prod (kg) AIC (R/kg) Prod (kg) AIC (R/kg) Prod (kg) AIC (R/kg) South Deep 10,000 (321koz) 540,000 (US$1,400/oz) 8,748 (281koz) 600,109 (US$1,400/oz) 9,800 (315koz) 585,000 (US$1,290/oz) 9,032 (290koz) 583,059 (US$1,234/oz) The implementation of the South Deep rebase plan got off to a slow start, with five safety incidents impacting production during Q1 2017. As a result production was 600kg (19koz) lower than planned. The mine was unable to make up the shortfall in production and consequently fell short of guidance for the year. Despite a strong recovery in the second half, production for the full year decreased by 3% to 8,748kg (281koz) in 2017 from 9,032kg (290koz) in 2016 and was 11% short of the guided 9,800kg (315koz). Costs of sales were 2% higher at R4,062m (US$305m). AISC increased by 1% to R574,406/kg (US$1,340/oz) from R570,303/kg (US$1,207/oz) in 2016, while AIC increased by 3% to R600,109/kg (US$1,400/oz) compared with R583,059/kg (US$1,234/oz) in 2016. The increase in AISC was driven by lower gold sold and higher costs of sales, partially offset by lower sustaining capital expenditure. AIC increased for the same reasons in addition to higher non-sustaining capital incurred during 2017. The rebase plan had guided an AIC of R585,000/kg (US$1,280/oz) for year one. South Deep also reported a goodwill impairment of R3.5bn (US$278m) (gross and after tax) during 2017, related to the slow start of the rebase plan and a reduction in the gold price and resource price assumptions used in the life-of-mine model. Capital expenditure decreased by 4% to R1,099m (US$82m) in 2017 from R1,145m (US$78m) in 2016. Sustaining capital expenditure decreased to R874m (US$66m) in 2017 from R1,030m (US$70m) in 2016, underpinned by lower spend on the mine’s fleet. Non-sustaining capital expenditure increased to R225m (US$17m) in 2017 (2016: R115m (US$8m)) due to higher expenditure on new mine development infrastructure and refrigeration infrastructure. During 2017, development decreased marginally to 6,897 metres from 6,933 metres in 2016, with development in the new mine areas increasing by 20% to 976 metres from 811 metres in 2016. Destress mining increased by 3% to 33,419m² in 2017 from 32,333m² in 2016. Long-hole stoping volumes mined increased by 3% to 767kt in 2017 from 745kt in 2016. South Deep recorded a net cash outflow of US$60m, in line with the rebase plan. For a details the progress of the South Deep rebase plan, please refer to p82. 2018 guidance: • Gold production: 10,000kg (321koz) • AISC: R500,000/kg (US$1,300/oz) • AIC: R540,000/kg (US$1,400/oz) Drilling and installing support at South Deep The Gold Fields Integrated Annual Report 201749 West Africa region Production overview Tarkwa Damang Region 2018 Guidance Prod (koz) AIC (US$/oz) 2017 Actual 2017 Guidance 2016 Actual Prod (koz) AIC (US$/oz) Prod (koz) AIC (US$/oz) Prod (koz) AIC (US$/oz) 520 160 680 970 1,520 1,100 566 144 710 940 1,827 1,119 565 120 685 985 2,250 1,193 568 148 716 959 1,254 1,020 The West Africa region is the second biggest producer in the Gold Fields portfolio, contributing 32% to Group managed production in 2017. Gold Fields has a shareholding of 90% in both mines with the Ghana government holding the remaining 10%. The Damang reinvestment project, which commenced on 23 December 2016, got off to a strong start, with both contractors performing ahead of plan. During 2017, total tonnes mined were 40Mt compared to the original project schedule of 33Mt, while gold produced was 144koz against guidance of 120koz. Encouragingly, AISC of US$1,027/oz and AIC of US$1,827/oz both came in below guidance of US$1,175/oz and US$2,250/oz, respectively. For an update on the Damang reinvestment plan, see p81. Despite total managed gold production for the region falling 1% to 710koz in 2017, it came in 4% ahead of guidance of 685koz, driven by the better than expected performance at Damang costs of sales for the region decreased by 8% to US$428m in 2017 from US$463m in 2016, underpinned by lower production, continued business process re-engineering and a build-up of inventory of US$41m (2016: US$18m). The mine also realised benefits from incorporating the Development Agreement, which was signed with the Ghana government in 2016 and was fully embedded during 2017. Capital expenditure increased to US$313m in 2017 from US$206m in 2016, with the bulk of the increase coming from the US$115m in project capital incurred at Damang. AIC for the region was US$1,119/oz, 6% lower than guidance of US$1,193/oz and 10% higher than the US$1,020/oz reported in 2016. Despite the significant amount of project capital incurred at Damang, the region as a whole reported a net cash inflow of US$64m during 2017, with Tarkwa generating net cash of US$109m and Damang recording a US$45m outflow. Through an agreement with US-based Genser Energy, an independent power producer, Tarkwa and Damang are now being supplied with gas-fired, on-site energy. This has improved reliability, the mills’ operational efficiencies and contributed to significant cost savings as a result of lower tariffs and using less diesel-driven generators. Savings during 2017 were around US$15m, when taking into account improved efficiencies and higher utility tariffs the mines would otherwise have had to pay. For more details see p63. Mine performances At Tarkwa, the largest and one of the most consistent producers in the Gold Fields Group, production decreased marginally to 565koz in 2017 (2016: 568koz), but was in-line with guidance of 565koz. The mine’s carbon-in-leach plant throughput decreased slightly to 13.5Mt (2016: 13.6Mt), while its yield remained steady at 1.30g/t. Cost of sales decreased by 6% to US$306m in 2017 from US$327m in 2016. Capital expenditure increased 8% to US$181m in 2017 from US$168m in 2016 mainly due to higher expenditure on the mining fleet. AISC and AIC decreased by 2% to US$940/oz in 2017 from US$959/oz in 2016, and were comfortably below guidance of US$985/oz. Tarkwa generated a net cash inflow of US$109m during 2017. 2018 guidance: • Gold production: 520koz • AISC/AIC: US$970/oz Damang produced 144koz in 2017, which is 3% lower than the 148koz produced in 2016, but 20% higher than guidance of 120koz. While the reinvestment plan entailed an increase in both operating costs and capital expenditure, both AISC (US$1,027/oz) and AIC (US$1,827/oz) came in below guidance. This is a result of the strict cost controls and better than expected efficiencies from the contractors used to implement the plan. Cost of sales decreased 10% to US$122m in 2017 from US$136m in 2016, due to the benefits of the Development Agreement being realised, the move to contractor mining and lower operating tonnes mined. Damang recorded a net cash outflow of US$45m in 2017, underpinned by the US$115m in project capital spent during the year. 2018 guidance: • Gold production:160koz • AISC: US$860/oz • AIC: US$1,520/oz The Gold Fields Integrated Annual Report 2017Safe operational delivery50 The number of recordable injuries also rose to 138 in 2017 from 124 in 2016. Of the 138 injuries, 75 were employee injuries (2016: 76) and 63 were contractor injuries (2016: 48). Most concerning is the increase in the fatalities last year, two of which occurred at South Deep and one at the Tarkwa mine in Ghana: • On 1 January, Thankslord Bekwayo, a dump truck operator at South Deep, hit an underground safety support structure with his truck and dislodged a horizontal beam, which struck Mr Bekwayo in the driver’s cabin. Following the incident the mine installed cabin doors in all relevant vehicles, repaired and illuminated steel support arches and enforced first-gear driving in support-set areas • On 16 February, Nceba Mehlwana, a South Deep loco driver, was fatally injured when he was struck by a steel drill rod he was using to close a stuck hopper door. After the incident the mine examined all hoppers, removed all sub-standard units, upgraded all hoppers after a comprehensive design review and ensured appropriate training and work practices are in place • On 14 October, Moses Adeaba, a contractor at the Tarkwa mine, was crushed by equipment in a scaffold storage shed. Since this was an unauthorised access area, the mine reviewed access controls to such sites after the accident, as well as the stacking arrangements in storage sheds Despite the setback in our overall safety performance last year, certain operations reported strong performances. The Cerro Corona mine in Peru reported only one recordable injury in 2017. That was in January of that year; since then it has operated for 14 months without SAFETY Introduction Gold Fields’ commitment to safety and health as our foremost priority reflects the need to minimise any potential negative impact on our employees and contractors, maintain operational continuity and protect our reputation. Gold Fields’ annual performance bonus – both for managers and the wider workforce – contains a significant safety component. Furthermore, maintaining safe and healthy working conditions is a key compliance issue. As stated in our Occupational Health and Safety Policy, Gold Fields strives for zero harm at all of our operations and to minimise occupational health and safety hazards. All of the Group’s operations are certified to the OHSAS18001 international health and safety management system standard. The work on safety is integral to our operational discipline and is accepted as the foundation for improved operational performance. As such, there is no conflict between pursuing safety and productivity at the same time. For details of our safety and health management approach, policies and guidelines go to www.goldfields.com/ sustainability.php Group safety performance During 2017, Gold Fields’ safety performance regressed after years of steady improvement. Most critically, we recorded three fatal injuries compared with one fatal injury in 2016. The total recordable injury frequency rate (TRIFR) increased to 2.42 incidents per million hours worked in 2017 from 2.27 in 2016, which was the lowest TRIFR at Gold Fields since 2013 when the ICMM adopted the measure as the most accurate gauge of safety performance. a recordable injury. The Tarkwa mine in Ghana has a TRIFR of 0.18, the lowest in the Group with only three reportable injuries in 2017, which included the fatality. South Deep has operated for over a year and well over one million fatality free shifts since the fatal incident on 16 February. Behaviour-based safety programmes are in place across our operations and our work at embedding these into our day-to- day performance, along with visible management leadership on the ground, will be strengthened in the wake of the fatalities during 2017. A safety leadership forum has been established to share learnings and good practices across the Group. To address the risk of major safety and related incidents, the Board’s Safety, Health and Sustainable Development Committee in 2017 oversaw the adoption of the critical control management approach promoted by the ICMM. The material unwanted events (MUEs) in safety and then health, environment and community were identified and prioritised in each region. Controls to prevent or mitigate these MUEs were then prioritised in a process continuing in 2018. In addition, major safety incidents in the mining industry globally were monitored to identify potential risks to Gold Fields’ operations. Gold Fields’ major safety MUEs have been identified, amongst others, as explosives, vehicle incidents, fire, hazardous materials, slope stability, machinery and guarding and underground ground control. The major health, environmental and community MUEs identified are tailings facility incidents, exposure to hazardous chemicals, particularly cyanide, failure to comply with legal requirements and water pollution. The Gold Fields Integrated Annual Report 201751 Group safety performance TRIFR1 Fatalities2 Lost time injuries3 Restricted work injuries4 Medically treated injuries5 Total recordable injuries 2017 2.42 3 52 60 23 138 2016 2015 2014 2013 2.27 1 39 59 25 124 3.40 4 68 68 35 174 4.04 3 75 84 38 200 4.14 2 52 73 54 181 1 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 hours worked 2 Three of the four fatalities in 2015 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 3 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 4 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 his/her 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 5 A medically treated injury (MTI) is a work-related injury sustained by an employee or contractor which does not incapacitate that employee or contractor 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 Regional safety performance Americas region Fatalities TRIFR Recordable injuries 2017 2016 – 0.19 – 0.34 1 2 Cerro Corona’s outstanding safety performance, with no recordable injuries between February 2016 and February 2017, can be attributed to aggressive safety campaigns and extensive training held at the mine. On a quarterly basis all employees and contractors are given training to reinforce their safety knowledge and motivate good behaviour. Employees were also briefed on the phasing out of coca leaf consumption, which has an adverse impact on alertness levels. Australia region Fatalities TRIFR Recordable injuries 2017 2016 – 10.44 – 9.43 61 57 At the heart of Gold Fields Australia’s safety efforts are the ongoing Visible Felt Leadership and Vital Behaviours programmes, both of which were introduced in 2014. Our annual survey among employees in 2017 indicated that 91% of the workforce say they adhere to their vital behaviours at all times. Assessments undertaken on all recordable injuries since 2012 indicate that the risk of incidences that result in recordable injuries is steadily declining. No high-risk events have occurred since 2014. However, during 2017 management compiled 15 critical hazard standards covering these events. Analytical tools have also been provided to mines to assist with understanding and verifying the effectiveness of safety systems. Contractor safety management will remain a focus at all our operations. For 2017, the TRIFR for our permanent workforce was 8.38 as opposed to the contractor TRIFR of 12.79, a 35% variance. This variance is attributed to the difficulty in achieving the required cultural shifts for safe behaviours with a transient and external workforce. The Gruyere project, in its first year under Gold Fields’ management, has been a focal point to ensure that our Vital Behaviours programme and our requirements for Visible Felt Leadership are implemented. Gruyere achieved a TRIFR below the 8.50 target for 2017, which sets a good foundation for the operational phase given the number of contractors on site and the risks associated with a construction project. All three mines in the region – St Ives, Agnew and Granny Smith – have underground operations that are at increasing depths. This increases seismic activity and with it the danger of rock falls. All operations have seismic hazard and ground control management plans in place, while real-time seismic monitoring is provided by the Institute of Mine Seismology in Australia. The monitoring programme generates real-time reports that can be tracked from control rooms at the operations and are also available on mobile phones of key staff to take appropriate actions when seismic activity is high. South Africa region Fatalities TRIFR Recordable injuries 2017 2016 2 2.91 1 2.42 64 50 South Deep’s safety performance showed a regression in 2017 with the two fatalities contributing to a rise in the TRIFR to 2.91 in 2017 from 2.42 in 2016. As a result of South Deep’s fatal incidents, the Department of Mineral Resources (DMR) issued four Section 54 work-safety related stoppages. A further 11 Section 54 stoppages were issued during 2017 following visits by the DMR due to The Gold Fields Integrated Annual Report 2017Safe operational deliverySAFETY continued either perceived unsafe working conditions, inadequate safety procedures or untrained personnel. This brings to 15 the total number of Section 54s in 2017 (2016: 15). These had a material impact on the mine and we estimate that about 24 days of production were lost as a result of the Section 54s stoppages. However, many of the recommendations by the DMR assist the mine in improving safety and wellness-related issues, and we co-operate with the regulator on a continuous basis. The number of injuries reported by the mine increased to 64 in 2017 from 50 in 2016. Three categories – material and equipment, fall-of- ground and slip and fall – accounted for 75% of these injuries. Underground vehicle and locomotive incidents were the reason for the two fatalities in 2017, and this has been the focus of our safety efforts. The number of fall-of-ground accidents had been steadily reducing with six reported in 2015, but 14 incidents last year. In 2017 there were nine fall-of-ground incidents, though there were no injuries sustained as a result of these incidents. We continue our efforts to move our employees away from potentially hazardous areas by focusing on strict compliance to spatial design and timeous installation of ground support to mitigate against the impact of fall-of-ground events. Fall-of-ground incidents underground are the result of gravity and seismic events at South Deep, which occur on a regular basis. Efforts at improving seismic forecasting abilities are ongoing and seismic activity rates are tracked following larger events to determine safer periods for the resumption of work. South Deep is working with 12 consultancies and institutions, including the Institute of Mine Seismology and the Australian Centre for Geomechanics, to monitor, understand and mitigate 52 against seismic risk in deep level gold mining. In 2018 we intend to implement centralised blasting across the mine, which will further assist in reducing the risk associated with seismic events. All seismic events are tracked and rated on a local magnitude scale. Seismic events registering above one on the magnitude scale decreased to 95 in 2017 from 104 in 2016 while events above magnitude two increased to seven in 2017, one more than in 2016. However, the average energy released per event is declining as the mine continues to implement measures and systems that improve safe production. Behaviour-based incident management and strict enforcement of safety standards continue to be the pillars on which the mine relies to improve working place physical conditions and address risky behaviour. In addition, 30% of bonuses, on average, are linked to safety-related performance. During 2017, South Deep rolled out four programmes to improve its safety performance, including back-to- basics training, hazard identification and risk assessments as well as artisan upskilling. Testing for alcohol and cannabis is also carried out as part of the mine’s zero tolerance policy, which applies to all South Deep employees. Beyond behaviour-based management, South Deep has also intensified its effort to engineer- out safety risks, through pre- conditioning of working areas, as well as upgrading machinery and equipment. As part of this, installation of a proximity detection system (PDS) has been rolled out at South Deep. The PDS warns both pedestrians and drivers of railed and trackless vehicles of each other’s proximity, and has contributed to a reduction of incidents involving pedestrians and mobile equipment. The PDS system entails vehicle-to- vehicle, vehicle-to-personnel and vehicle-to-beacons alert systems. Substantial progress has been made in the implementation of PDS across the mine, as the use of trackless mobile machinery has increased. All 56 locomotives at the mine have been fitted and relevant operators and artisans trained in its use. The next step is the interface between the trackless mobile machinery and rail-bound equipment in areas where the roadway crosses the tracks. West Africa region Fatalities TRIFR Recordable injuries 2017 2016 1 0.50 – 0.68 12 15 The fatal accident at the Tarkwa mine, overshadowed a continued improvement in TRIFR at both Ghanaian operations. Tarkwa’s TRIFR of 0.18 in 2017 (2016: 0.31) is the best in the Group, while Damang’s TRIFR improvement to 1.19 (2016: 1.67) is commendable given the risk associated with the Damang pit cutback work. In the wake of the fatal accident, supervision and contractor management standards were reviewed and improvements recommended. These have been incorporated into the goals of the region’s 2018 health, safety and environment strategy. Learnings and actions from the incident have been shared and implemented regionally with Damang. The mines rely on a number of behaviour-based and safety discipline awareness programmes to entrench safe behaviour. A key part of the safety strategy is a zero tolerance approach to drug and alcohol use. Over 58,000 alcohol and almost 400 drug tests were conducted at both mines during 2017 and employees and contractors, who were found to be over the limit, were dismissed. The zero tolerance approach is supported by free counselling and educational sessions on drug and alcohol abuse. The Gold Fields Integrated Annual Report 201753 HEALTH Introduction Gold Fields is committed to reducing the exposure of its employees to occupational health risks, including those associated with air quality, silicosis, tuberculosis, diesel particulate matter and hearing loss. As such, each region has implemented occupational health and hygiene monitoring for diesel particulates, respirable and silica dust, other airborne pollutants 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 underground mining poses to workers. All of Gold Fields’ regions run dedicated health 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. The adoption of the critical control management approach promoted by the ICMM, will also assist with the identification and mitigation of adverse health impacts on our employees. Occupational diseases at South Deep (rate per 1,000 employees and contractors) Noise-induced hearing loss (NIHL)1 Cardio-respiratory tuberculosis (CRTB) Silicosis1 Chronic obstructive airways disease (COAD)2 South Deep workforce 2017 0.78 3.26 1.71 0.47 6,432 2016 0.80 5.26 1.12 0.64 6,277 2015 0.68 6.16 1.54 0.17 5,837 20141 20131 1.52 9.15 2.67 0.76 0.62 6.5 1.86 0.00 5,246 6,466 1 Numbers are now presented per 1,000 employees and contractors. Comparatives have been restated 2 Based on the number of cases submitted for compensation Silicosis and Tuberculosis The South African mining industry regulations for silica dust exposure require that 95% of all personal silica dust samples taken must be below 0.05mg/m³ by 2024. By the end of 2017, 24% of the employee silica dust samples exceeded this level, compared with 26% in 2016. South Deep has accelerated the implementation of a range of improved dust control measures to gradually reduce these levels, including: • Real-time dust monitoring • Fitting water mist sprays at dust sources • Dust management controls on footwalls and internal tips • Establishing of a dust-task team • Introducing of centralised blasting in 2018 • Introducing of automated footwall treatment systems in 2018 During 2017 the Silicosis rate per 1,000 employees regressed to 1.71 from 1.12 in 2016, with the number of Silicosis cases submitted to the relevant health authorities rising to 11 from seven in 2016. However, no South Deep employee who joined the mine after 2008 and had previously not been exposed to silica dust, has contracted Silicosis. South Deep’s CRTB rate improved to 3.26 per 1,000 employees in 2017 from 5.26 in 2016 and the number of CRTB cases submitted fell to 21 in 2017 from 35 in 2016. In 2014 an industry working group was formed to address issues relating to compensation and medical care for occupational lung disease in the South African gold mining industry. Since then the working group has had extensive engagements with a wide range of stakeholders, including government, organised labour, other mining companies and legal representatives of claimants who have filed legal suits against the companies related to occupational lung disease. 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 do not believe that they are liable in respect of the claims brought, and are defending these. In May 2016, the South African South Gauteng High Court ordered the certification of a silicosis class and a tuberculosis class following the filing of the legal suits. The High Court ruling did not represent a ruling on the merits of the cases brought against the mining companies. The Supreme Court of Appeal granted the mining companies leave to appeal against all aspects of the May 2016 judgment. However, during 2017 good faith settlement negotiations between the working group and claimants’ legal representatives reached an advanced stage, so much so that both parties jointly asked for the appeal proceedings to be postponed until further notice. This was granted. The Gold Fields Integrated Annual Report 2017Safe operational deliveryHEALTH continued Also as a result of the positive engagements, Gold Fields, in its interim 2017 results, provided an amount of US$32m (R390m) in the statement of financial position for its share of the estimated cost in relation to a possible settlement of the class action claims and related costs. The nominal value of this provision was US$40m (R509m). At our 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. As such there were no new cases of Silicosis and CRTB reported at these operations during 2017. HIV/Aids HIV/Aids management is integrated into Gold Fields’ mainstream health services at our South African and Ghanaian mines and 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). In South Africa an estimated 15 to 19% of adults (aged 15 to 49) live with HIV/Aids. Gold Fields is committed to lowering the HIV/Aids levels at South Deep, where the prevalence rate (% of the workforce living with HIV/Aids) is 5.2% for those employees that were tested and counselled. There was a decline in the number of employees tested positive to 45 in 2017 from 112 in 2016. Since 2011, 5,597 HIV/Aids tests have been conducted of which 874 were positive. Between 2014 – 2017 about 76% of the workforce were counselled and tested for HIV. South Deep’s integrated HIV/Aids and TB strategy directly addresses interactions between these diseases. 54 It has four key pillars: • Promotion: This includes regular publicity campaigns and condom distribution at all workplaces • Prevention: VCT is provided to all mine employees and contractors on a confidential basis. In 2017, the mine’s VCT participation rate was around 29% • Treatment: Free Highly Active Anti-Retroviral Treatment (HAART) is provided to HIV-infected employees through onsite, medical doctor-staffed clinics. In 2017, 36 employees joined the HAART programme (2016: 53). This takes the total number of active participants to 336 (2016: 332), with 574 cumulatively enrolled since the HAART programme began in 2004. Employees’ dependants can also receive HAART via the Company’s medical aid schemes. We do not provide treatment to employees from contracting firms, which provide their own support to their staff • Support: This includes doctor- based primary healthcare, psychological counselling and social services for all employees and contractors. South Deep also supports a number of community- based HIV/Aids projects In Ghana, where the national HIV/ Aids rate is around 2%, employees and contractors have access to a confidential VCT programme which employees receive free of charge. During 2017, about 49% of the workforce underwent the VCT programme. Anyone testing positive is provided with free treatment in line with the government’s national HIV/ Aids treatment programme. By year-end 2017 Ghana had 34 employees on HAART (2016: 22). Malaria Our workforce in Ghana faces a high risk of exposure to malaria and the Company has a comprehensive malaria control strategy in place, which incorporates education, prevention, prophylaxis and treatment. It also includes provision of mosquito repellent for workers, support for community health facilities and rapid diagnosis and treatment. In 2017, 392 employees (2016: 505) tested positive for malaria after 2,460 (2016: 3,181) 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 Company housing units sprayed twice a year as part of our Malaria Vector Control programme. Under this programme a total of 488 Company housing units at both mines were sprayed in 2017. The number of South Deep employees who contracted Malaria almost doubled to 17 in 2017 from nine in 2016, though these were migrant workers from areas which are considered high-risk areas. Noise During 2017, there were no new cases of NIHL at our Australian, Peruvian or Ghanaian operations and five at the South Deep mine. All our mines are making good progress in implementing a range of medical, educational and engineering interventions to improve performance in this regard. These include: • Early diagnosis and management of treatable lifestyle diseases • Preventative counselling on NIHL • Equipping employees with the appropriate personal protection equipment (PPE) and training them in the use of PPE • Application of noise management measures to the underground mining fleet • Continuous monitoring of operator workstations and in-pit machines – drill rigs, excavators, dump trucks and graders • Engineering controls, such as sound proof seals for equipment operator cabins The Gold Fields Integrated Annual Report 201755 South Deep met the MHSC milestone for equipment noise not to exceed 110 (A-weighted) decibels (dB(A)), and only 4% of samples were above the 2024 milestone of 107 dB(A). It is important to note that these measurements do not incorporate the noise reduction effect provided by hearing protection devices, which are freely available and are compulsory to wear in demarcated areas. These devices (ear plugs and ear muffs) ensure that operators at all our operations experience noise levels of below 85 dB(A). Diesel particulate matter Gold Fields undertakes regular monitoring and analysis of the concentration of diesel particulate matters (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. 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. These initiatives have led to a sharp decline in DPM levels underground, to a point where less than 1% of samples have exceeded the 70μg/m3 target (adjusted for a 12-hour shift) recommended by the Australian Institute for Occupational Hygienists. In South Africa, new regulations have not yet been promulgated, but a limit of 160μg/m3 is considered good practice. This is what South Deep has been working towards through a range of programmes, such as the acquisition of vehicles and machines with more advanced engine technology as well as use of ultra-low sulphur content diesel. The 160μg/m3 DPM OEL was exceeded in 12% of samples during 2017 compared with 14% in 2016 and 19% in 2011. At our open-pit mines in Ghana and Cerro Corona, the exposure levels and concentration of personal and area DPM samples are insignificant. Longer-term, the International Council on Mining & Metals is giving consideration to a strategy that will see major mining companies entering a dialogue with equipment manufacturers to gradually introduce electrical machinery and equipment underground. Pinning wiremesh to the hanging wall at the Agnew mine The Gold Fields Integrated Annual Report 2017Safe operational deliveryFIT-FOR-PURPOSE WORKFORCE 56 People are critical to safe operational delivery. During the year our main human resource (HR) objectives focused on ensuring we have the skills, culture, organisational structure and workforce profile necessary to meet our strategic objectives. Gold Fields respects the personal dignity, privacy and personal rights of every employee. We are committed to maintaining a workplace free from discrimination and harassment, in which employees are treated fairly and equitably. We support and strive to ensure that the principles of the United Nations Universal Declaration of Human Rights are embedded and upheld in our business. We comply with all relevant labour legislation, standards and requirements in the jurisdictions in which we operate, and uphold the constitutional rights of our people as set out in the relevant countries in which we operate. Workforce profile Total workforce by region Dec 2017 Americas Australia South Africa West Africa Corporate Office Total Total workforce 2,034 2,337 6,432 7,671 120 18,594 Group HR performance Category Total employees (excluding contractors) Contractors1 HDSA employees in South Africa(%)2 HDSA employees in South Africa (%) – senior management2 National employees in Ghana (%) excluding contractors Minimum wage ratio3 Female employees (%) Ratio of basic salary men to women Employee wages and benefits (US$m) Average training (hours per employee) Employee turnover (%)4 Employees Contractors Proportion of nationals 365 1,449 4,012 2,910 120 8,856 1,669 888 2,420 4,761 – 9,738 2017 8,856 9,738 71 57 99 2.43 16 1.25 506 223 6.0 2016 8,964 9,127 72 55 99 1.97 15 1.31 482 273 12.0 2015 9,052 7,798 71 48 99 1.50 14 1.09 435 240 8.0 2014 8,954 6,486 71 47 99 1.70 14 1.10 468 181 20.2 100% 98% 82% 99% – 95% 2013 10,167 6,685 70 44 99 3.00 11 1.20 595 973 10.0 1 Contractors are defined as workers who are not employees and are not on our payroll. They normally perform work that has been outsourced by our operations or is specialist work that is not always undertaken by our mines on a day-to-day basis 2 Excluding foreign nationals, but including white females and corporate office staff; HDSAs – Historically Disadvantaged South Africans, according to the Employment Equity Act definition 3 Entry level wage compared to local minimum wage 4 Includes voluntary and involuntary turnover The Gold Fields Integrated Annual Report 201757 • Structure support functions to meet the requirements of a leaner organisation A restructuring process commenced during 2017 at managerial level, with 26% of the management team being retrenched and a number of other positions being regraded. Since October 2017, management has also held extensive engagements with the National Union of Mineworkers and the United Association of South Africa, South Deep’s two registered trade unions, regarding the importance of a turnaround process at South Deep. This centres around achieving the improved productivities necessary to meet the ramp-up targets of the rebase plan. West Africa region During 2017 we took a decision to move our Tarkwa operation to contractor mining to support the mine’s efforts to prolong its life. We already use contractor mining at our Damang mine as part of the mine’s reinvestment programme. As with Damang, the majority of affected employees at Tarkwa – between 80 – 85% – will be absorbed by the mining contractors. All affected workers, including those who will be re-engaged by the contractor, will be paid their full severance package, which includes three months’ salary for each year of service. Those who are not immediately engaged by the contractors will be the first point of contact for future job opportunities at the mine. The transition to contractor mining commenced in March 2018. Structuring the workforce A key area of focus in 2017 was to ensure that our mines have the appropriately sized and qualified workforce to drive safe operational delivery. Australia region Taking on the management of the Gruyere project, the Gold Fields Australia region needed to develop a compelling value proposition to attract and retain skilled staff for the project’s construction in an increasingly competitive market. The benefits offered, while well within industry benchmarks, enabled us to attract the rights skills for the timeous completion of the project. South Africa region Achieving the targets of the rebase plan (p82) to set up South Deep for long-term sustainable production will require the right leadership structures, resources and capabilities. During 2017, the mine’s management team analysed the effectiveness and efficiency of South Deep’s organisational structure. This comprised a review of the managerial, operational and support structures of the mine to: • Improve efficiencies by reducing the size and complexity of the organisation to allocate clear accountability, removing duplication and improving decision-making • To align the cost base with productivity rates, gold price and exchange rate pressures and lower projected revenue flow over the next few years Americas region At the beginning of 2017, our Peruvian operation undertook a restructuring process to align the workforce with the production profile of the Cerro Corona mine. In total, 19 positions were made redundant and affected employees were either retrenched or moved internally. Attracting, retaining and developing the right skills Our operations require, above all, mechanised mining expertise – our skills attraction, retention and development efforts focus on building a workforce profile that meets these operational needs. We also invest significantly in manager and leadership development across the business. Group training spend for the year was US$20m. In general, our operations in Australia, Ghana and Peru have an appropriately skilled mechanised mining workforce. But at South Deep work remains to be done to align the workforce with the deep-level, bulk mechanised mining method of the operation. The Gold Fields Integrated Annual Report 2017Safe operational deliveryFIT-FOR-PURPOSE WORKFORCE continued 58 South Deep invested R184m (US$15m) in training and development in 2017. This included programmes run at the mine’s training centre, Social and Labour Plan skills development commitments and technical training costs. There was a particular focus on mechanised training and supervisory development aimed at improving safety and productivity. South Deep’s Virtual Reality (VR) training project was also completed during the year – in 2018, employees will receive VR training on barring, strata control and safety. Ghana ran 448 competency-based, technical training sessions for employees, while 367 sessions were run for management employees focusing on supervisory and leadership skills development. Over 22 sessions were run for professional employees to allow them to complete statutory and other certificates of competence. Investment in training and development in the region totalled US$2.5m for the year. In Australia, US$2.3m was spent on training, divided between leadership training (US$0.6m) and technical training (US$1.7m). The region continued to run preparatory leader and supervisor development programmes, and introduced a new change leadership programme. The programme includes mine simulation that encourages participants to identify opportunities for business improvement. At Cerro Corona, 26 leaders completed training programmes for supervisors, which were among a number of interventions aimed at leadership and managerial development. Technical skills training and competency assessments continued during the year, and the operation awarded employees 146 scholarships to pursue short courses, technical degrees and specialist qualifications aligned to their core role. Innovation and technology will be critical in improving safety, volumes and costs at our mines – we recognise the need to modernise, integrate and optimise existing systems and processes as we align ourselves with automation and new digital trends in the industry. Building a pipeline of innovation and technology skills, and a business culture to support the transition, is an area of growing importance in the company. We formed the Young Persons Group, comprising high-performing young employees from multiple disciplines across our operations, to provide input into our innovation and technology strategy. In the year ahead, we will embark on a culture change programme to support an innovative and technology-ready culture. Building a high- performance, safety culture The ethos of safe, sustainable delivery is entrenched in the Gold Fields vision and the behaviours outlined through our values, and is supported by our operating model. During the year we ran a project to reinvigorate the Gold Fields vision and values, and unite employees from across the global operations behind a unified brand and single strategic goal. The programme was run by EVPs in each region and clearly articulated the behaviours required for the business to achieve its objectives, with safe delivery heading the list. Strengthening diversity across the business Gold Fields encourages diversity across the business – apart from the moral imperatives of doing so, we believe that the wide array of perspectives that results from such diversity promotes innovation and drives business success. A Diversity Policy was approved by the Board during the year and sets out the Company’s approach to fostering a more diverse workforce. This will be achieved through recruitment, training and development, gender equality and rejection of all kinds of discrimination and harassment. A monitoring system is due to be implemented to measure workforce diversity and the extent to which recruitment, promotion, and training and development opportunities are helping to improve diversity. In South Africa, diversity targets and initiatives are aligned with the requirements of the Employment Equity Act and the Mining Charter. South Deep continues to make steady progress towards achieving a workforce that is more representative of the demographics of South Africa. Representation of Historically Disadvantaged South Africans at senior management level increased from 64% in 2016 to 88% in 2017. The mine continues to compare favourably with the industry in terms of women in mining representation. Currently 21% of South Deep’s permanent workforce is women, with the ratio of women in technical mining roles being 17%, and women in managerial roles 16%. Gender diversity was an important human resource focus area in our Australia region during the year. In total, 17.4% of permanent employees are women, with 15.8% of middle and senior management positions being filled by women. Our Australian mines have gender The Gold Fields Integrated Annual Report 201759 diversity initiatives in place to improve attraction and retention of women. At the end of 2017, 20% of all recruits and 35% of hired candidates from the graduate and vacation student programme were women. The region will focus on developing further strategies to improve gender diversity through appointments and remuneration policies as well as flexible working arrangements. Ghana’s diversity focus includes both the employment of Ghanaian nationals and the employment of women at all levels. The number of expatriate employees (1%) has been below the legally stipulated target of 6% for the past four years. The region will continue its successful programme of replacing expatriate skills with competent nationals. Representation of women in Ghana is still low, at around 5%, but addressing this low level of female representation has been prioritised as a key imperative for the region, to be driven by senior leadership. Initiatives in place to increase the representation of women include identification of female talent in all departments, a review of the recruitment approach and identifying and coaching high-potential female employees to ultimately assume managerial roles. The region is targeting an increase in its complement of female employees by an additional 5% in 2018. In Peru, 16% of permanent employees are women, while 7% of senior management positions and 15% of middle management positions are held by women. At the Salares Norte project in Chile, 14% of the permanent workforce are women – they comprise 28% of middle management, although there is no female representation at senior management level. The Gold Fields Board has 36% employment equity representation, while employment equity representation at the Executive Committee level is 40% with 20% female members. Among senior management at Corporate Office the figures are 58% and 53% respectively. Across the Group, 16% of employees are women. For details of progress in employing members of our host communities into the workforce, see p111 Cerro Corona open pit The Gold Fields Integrated Annual Report 2017Safe operational deliveryFIT-FOR-PURPOSE WORKFORCE continued 60 Engagement with organised labour Americas region About 19% of Peru’s Cerro Corona workforce is unionised, largely among employees in the operational areas. Negotiations with organised labour on a new three-year collective agreement (June 2016 – June 2019) concluded in 2017. Key items include: • A salary increase of approximately 5.4% per annum • A bonus component commensurate with market standards • Compensation of equivalent time off for any mandatory training courses undertaken outside working hours • Retention of existing benefits At the Salares Norte project in Northern Chile, which has moved into feasibility study phase, management commenced engagement with the new Salares Norte Workers Union. The relationship will govern working conditions at the mine and will be reviewed once the outcome of the feasibility study is known. West Africa region About 85% of the Ghanaian workforce belongs to the Ghana Mineworkers Union (GMWU). In the first quarter of 2017, the region signed a two-year wage agreement for 2016 (backdated) and 2017, with salary increases of 10% and 6% respectively. Further agreement was reached on developing a wage model that will guide salary increases from 2018 and beyond. In January 2018 the GMWU brought a court injunction against Gold Fields’ decision to convert from owner to contractor mining at the Tarkwa mine. However, this was overturned by the Accra High Court in February, and the mine commenced with the transition to contractor mining thereafter. South Africa region Management at South Deep has engaged extensively with organised labour, which represents 93% of our employees, most of them by the National Union of Mineworkers. Constructive engagement has helped to improve the relationship between the two parties, and during 2017 management resolved a significant portion of the key outstanding issues with the unions. There is also understanding among the union representatives of the challenges facing the mine and the need to change to an operating model that is more aligned to bulk mechanised mining. Engagement on this has intensified during Q1 2018. A three-year wage agreement between South Deep’s trade unions and the mine expired in February 2018 and wage negotiations for a new deal commenced in March 2018. Australia region Wages in Australia are determined largely by mining industry cycles. During 2017, an upturn in the resources sector saw wage pressures increase marginally – in the year ahead such pressure may increase even further. In addition, government imposed a 3.3% increase to minimum wages. As a result, our overall wage and remuneration packages are expected to be around 3% higher in 2018. The Australian Employee Collective agreement’s term will lapse in April 2018. Engagements have been concluded with both the workforce and unions on a new agreement, though this still has to be ratified by the government’s Fair Work department. The agreement, which will apply for the next four years, will see improved benefits and conditions of employment in the form of: • Parental leave increasing to 16 weeks’ paid leave • Partner’s parental leave increasing to two weeks • An increase in the health allowance Looking ahead to 2018 In the year ahead Gold Fields will focus on the following people- related imperatives: • Driving a high-performance culture that will improve productivity and efficiency, lower costs and contribute to the achievement of AIC of US$900/oz • Building a workforce for the future in line with making the shift to a gold miner of the future. This will involve a strong focus on talent management and succession planning to attract, retain and promote young talent • Deepening engagement with employees to identify and address hurdles to greater productivity • Maintain healthy engagement with organised labour across our operations For details of our executive and managerial remuneration policies and payments see the Summarised Remuneration Report on p130 – 134 The Gold Fields Integrated Annual Report 201761 ENERGY MANAGEMENT Introduction Energy markets have been fundamentally redefined by the global drive to minimise contribution and build resilience to climate change. This has affected the types of energy sourced by business, the cost of energy, how energy is procured and how energy is finally used. The gold mining industry is affected directly by these drivers, given the energy intensity of its processes. Mining and processing of gold is getting more energy intensive given a number of factors including: • Declining grades • Longer hauling distances • Increasing mine depths requiring more pumping and cooling infrastructure • Increased stripping to expose new ore bodies • More challenging ore body geologies At the same time, energy prices continue to increase. For Gold Fields, energy spend accounts for a significant portion of our operating costs (2017: 17%, 2016: 19%), equivalent to 12% of AISC (2016: 13%). This reinforces the need for increased energy supply security, investing in continuous efficiency improvements, reducing our carbon emissions and adapting to the adverse effects of climate change. Successfully implementing these initiatives contributes to a number of our strategic objectives of operational excellence and demonstrates our commitment to responsible mining principles. In 2016, we revised our Integrated Energy and Carbon Management guideline to align with ISO50001, the global energy management standard. We started the alignment with the standard in 2017 by integrating energy and carbon management into operational and strategic aspects of the business. Energy awareness and training is provided for relevant staff and contractors, while our energy and carbon emissions data is collated and assured by independent auditors. The guideline informs our integrated energy and carbon management strategy, which is aimed at strengthening energy security, managing energy consumption and costs, reducing carbon emissions and building operational climate resilience. We have set our 2020 aspirational goals from 2018 to be: • Maintain energy security outside the top 10 Group risks • Achieve 5% to 10% energy savings off our annual energy plans each year • Achieve 17% carbon emission reductions each year up to 2020, equivalent to 800,000t CO2-eq of cumulative carbon emission reductions over the period • Ensure that all our operations are ISO50001 ready or certifiable More details on Gold Fields’ climate change management and carbon emission performance can be found on p96 – 98 and for more details of our energy management approach, policies and guidelines go to www.goldfields.com/ sustainability.php Group energy consumption (TJ) 15,000 Overall energy performance • Group energy spend declined by 11% to US$258m (US$115/oz) in 2017 from US$289m (US$130/oz) in 2016, with energy initiatives having delivered just below 9% cost savings, at US$22m (US$10/oz), against an initial target of 8% in the 2017 energy plan • Total energy consumption increased by 4% to 12,178TJ in 2017 from 11,697TJ in 2016, with 67% comprising fuel usage (8,175TJ) and 33% electricity (4,003TJ), compared to a 63%/37% split in 2016 • Fuel spend accounted for 44% (45% in 2016) of total energy spend, with electricity accounting for 56% (55% in 2016). The impact of lower oil prices kept our fuel spend lower relative to our electricity spend. A table showing Group and regional energy costs and volume impacts can be found on our website at www. goldfields.com/ environment.php • Energy initiatives realised 176GJ in savings during 2017, equivalent to 1% of energy consumed (against an initial target of 3% in the 2017 energy plan) • An estimated 8% of carbon emissions, totalling almost 116,000 CO2-eq, (against an initial target of 8%) were abated • Our energy intensity increased to 5.46GJ/oz (2016: 5.27GJ/oz), driven by increased fuel usage • Our Scope 1, 2 and 3 carbon emissions decreased marginally to 1.959 Mt CO2-eq from 1.964 Mt CO2-eq in 2016 (see graph p64) 12,500 10,000 7,500 5,000 2,500 0 5 1 1 5 8 2 , 4 6 6 0 , 6 7 0 1 5 9 7 3 0 2 , 4 0 3 9 , 6 4 9 2 , 4 8 0 6 , 6 0 1 4 , 1 3 0 0 , 4 5 6 7 , 6 2014 2015 2016 2017 Diesel Electricity Other fuels The Gold Fields Integrated Annual Report 2017Safe operational delivery ENERGY MANAGEMENT continued 62 Regional energy spend (US$/oz) 250 200 150 100 50 0 8 3 2 5 6 1 7 2 1 7 5 1 8 9 9 6 1 7 6 1 2 4 1 2 9 0 1 9 8 7 7 9 6 1 2 2 1 6 8 2 7 2014 2015 2016 2017 Australia South Africa South America West Africa Fuel • Fuel spend decreased by 13% to US$113m in 2017 (2016: US$129m) despite higher fuel consumption, largely due to lower oil prices for most of 2017 and a number of fuel efficiency initiatives implemented • Diesel accounted for 83% of our fuel energy consumption in 2017 • Total diesel consumption increased by 3% to 188Mℓ (equivalent to 6,765TJ) from 183Mℓ (6,608TJ) in 2016, due to the vast amount of material moved at the Damang Pit Cutback project, increased TSF construction activities at Cerro Corona and the frequent use of backup diesel generators at Agnew to avoid breaching the grid power limits. This offset the benefits of diesel efficiency initiatives implemented at all operations • The oil price hedge entered into for the period June 2017 – December 2019 for 50% of Australia’s and Ghana’s diesel consumption volumes, generated savings of US$2m for the 2017 period of the hedge Electricity • Electricity spend declined by 10% to US$145m in 2017 from US$160m in 2016, owing to the 2% drop in the Group’s power consumption, lower power tariffs at Cerro Corona, lower gas prices at Granny Smith and St Ives and the impact of energy efficiency initiatives. Furthermore, the new gas turbines at Tarkwa and Damang delivered considerable costs savings at our Ghanaian mines • Group electricity purchased was 1,366GWh (equivalent to 4,003TJ, allowing for generation losses for Gold Fields’ own generation) in 2017, a 2% decrease from consumption in 2016, driven by lower gold production at South Deep and the Darlot divestment in Q4 2017 • For 2018, against our initial energy use estimate of 10,983TJ and our budget of US$326m, we aim to achieve consumption savings of 5% (549TJ), cost savings of US$32m, equivalent to US$15/oz of gold produced, and abating about 155kt CO2-eq in carbon emissions Energy savings initiatives Gold Fields’ energy management approach has over the years shifted from equipment retrofits to more process related efficiency opportunities. Since 2013, Gold Fields’ implementation of the integrated energy and carbon management strategy has realised cumulative savings amounting to 1,274TJ in energy (2% of energy consumption over the period), equivalent to US$63m in cost savings and avoiding 282,900t CO2-eq in carbon emissions (3% of carbon emissions over the period). Group energy spending over the period has also improved, declining to US$258m (US$115/oz) in 2017 from US$305m (US$153/oz) in 2013. The next wave of opportunities seeks to deliver further energy savings primarily through the use of new technologies. (Savings from energy savings initiatives are recognised for 36 months before being included in the baseline). Below are some of the energy savings initiatives that we have implemented in 2017 across our operations: • Use of diesel additives at Cerro Corona, with trials scheduled for Tarkwa • Switching from diesel power generators and unstable grid supplies to gas turbines at Damang and Tarkwa • Switching from satellite diesel generators to low carbon gas generated electricity at St Ives • Gas and electricity contract renegotiations at Cerro Corona, St Ives and Granny Smith • Upgrades of gas turbines to increase efficiencies at Granny Smith • Milling circuit upgrades and improving milling efficiency at Damang • Haul truck driver training to improve asset utilisation and fuel reduction initiatives at Tarkwa and Damang • Use of drones to conduct tailings geological surveys, with more accuracy and efficiency at Tarkwa Regional performance Americas region Faced with increases in regulated electricity prices, Cerro Corona successfully renegotiated a new 2027 power purchase agreement with private power company, Kallpa, resulting in a 13% cut in the previously agreed to 2017 tariffs and stable tariffs thereafter. The purchased electricity has the lowest carbon intensity in the Group, with 70% gas- and 30% hydro- generated. Among other initiatives: • Cerro Corona has started the ISO 50001 certification process • A new fuel additive initiative has been rolled out at Cerro Corona resulting in lower fuel usage and spend The Gold Fields Integrated Annual Report 201763 • Agnew: A feasibility study on power options to increase supply capacity is being conducted with a mix of low carbon energy solutions being considered • Gruyere Joint Venture: Solar powered pumps are being installed at the bore fields to replace diesel generators In 2017, new initiatives contributed 21.4TJ and 15kℓ of diesel to energy consumption savings, equivalent to US$3.4m in cost savings (US$4/oz), and avoided 25.8kt CO2-eq in carbon emissions. South Africa region Eskom, the public power utility that supplies South Deep with electricity, generates 90% of its electricity from coal-fired power stations, thus making this the most carbon intensive operation across Gold Fields. Power supply to South Deep has been stable and tariff hikes relatively modest since 2015. However, Eskom’s proposed future electricity tariff increases, special tariff increments and lack of clarity of future trends, present operational and planning risks. In 2017, we reached a commercial agreement and are close to signing a 25-year PPA with an independent power producer (IPP) for a 40MW solar photovoltaic facility at our South Deep mine. The IPP will develop, build, own, operate and maintain the plant with commissioning expected in 2019. The plant is expected to generate 100GWh per year, equivalent to 20% of the mine’s annual electricity consumption, while avoiding carbon emissions estimated at 100,000t CO2-eq per annum. In 2017, new initiatives contributed 26.0TJ (7,245MWh) to energy consumption savings, equivalent to US$458,000 in cost savings (US$2/oz), and avoided 7.1kt CO2-eq in carbon emissions. In 2017, new initiatives contributed 26,8TJ and 747kℓ of diesel to energy consumption savings, equivalent to US$623,000 in cost savings, and avoided 2kt CO2-eq in carbon emissions. As part of the feasibility study under way at Chile’s Salares Norte project, an initial assessment for solar power has been undertaken. Market responses indicate strong feasibility for solar power to augment base- load thermal power units. Australia region All our mines in Australia run on gas-generated electricity. Diesel is used primarily for our fleet of vehicles and machinery. The focus for 2017 remained on implementing a fuel switch strategy and renegotiating gas supply contracts. The Company hedged part of Australia’s oil purchases against a rising oil price. This realised financial gains of US$713,000 in the region during 2017. In 2017, we became the first mining company in Western Australia to successfully auction our carbon emissions and receive carbon credits of A$126,000 from the country’s Emission Reduction Fund (ERF). Contracted in April 2016, the Granny Smith 25MW gas power station abated close to 21,000t CO2-eq, following the conversion of a diesel power plant to gas – 8 000 tonnes more than contracted for the first year, thus earning extra credits. A portion of the additional credits will be used to offset future St Ives carbon emissions. Following the energy security assessments in 2017, the following energy initiatives/studies were conducted during the year: • Granny Smith: A feasibility study on power options is under way to extend capacity and potentially include solar power West Africa region Through an agreement with Genser Energy, an independent power producer, Tarkwa and Damang are now being supplied with gas-fired, on-site electricity. This has significantly improved reliability and the mills’ operational efficiencies and contributed to significant cost savings as a result of using less diesel-driven generators. Savings during 2017 were around US$15m, when taking into account improved efficiencies and higher utility tariffs the mines would otherwise have had to pay. By Q4 2017, all of Damang’s and 60% of Tarkwa’s power requirements were being met by the gas turbines. Civil works and foundations were completed for the fourth gas turbine at Tarkwa in Q4 2017. Once this is operational – expected by mid- 2018 – Tarkwa will also be 100% supplied by gas. Plans are advanced to capture the waste heat from the Genser gas turbines to generate an additional 20MW that Genser could wheel through the distribution network to other clients. This will result in further unit cost savings to our mines. The Company hedged part of Ghana’s oil purchases against a rising oil price. This realised financial gains of US$1,24m in the region during 2017. In response to the Government of Ghana’s challenge for mines to have 10% renewables by 2020, Gold Fields Ghana will commission an options study in 2018 for a combined 6MW solution at the two mines. In 2017, new initiatives, including the switch from diesel to gas, contributed 102TJ to energy consumption savings, equivalent to US$18m in cost savings (US$25/oz), and avoided 81kt CO2-eq in carbon emissions. The Gold Fields Integrated Annual Report 2017Safe operational deliveryOUR ENERGY AND CLIMATE CHANGE MANAGEMENT JOURNEY 64 Why does energy and climate resilience matter? Our response – strategic programmes Group energy spend (US$m) 400 1 6 3 300 200 100 0 2 1 3 9 8 2 8 5 2 2014 2015 2016 2017 Granny Smith gas plant Group energy costs 21 22 1 2 2 2 9 1 7 1 (% of Opex) 28 21 14 7 0 2014 2015 2016 2017 Climate change impacts our water security (Mℓ) 35,000 33,000 31,000 29,000 27,000 7 4 2 , 5 3 5 8 9 , 2 3 7 0 2 , 0 3 1 2 3 , 0 3 2014 2015 2016 2017 Impacts our carbon footprint (Million tonne CO2-e) 2.0 1.5 1.0 0.5 0.0 6 4 . 0 9 7 . 0 4 4 . 0 3 5 . 0 9 7 . 0 3 4 . 0 4 5 . 0 7 9 . 0 5 4 . 0 9 5 . 0 8 8 . 0 9 4 . 0 2014 2015 2016 2017 Scope 1 Scope 2 Scope 3 • Technology opportunity and risks • Regulations impacting our energy and water resources • Severe weather events disrupting our operations • Commitment by Board and Group Exco • Gold Fields implemented an integrated energy and carbon management strategy from 2013 onwards • Energy and carbon performance contained in the balanced scorecards of senior and line management • Five-year energy security plans developed and implemented in all regions • Revised three-year regional carbon emission and energy efficiency targets to 2020 • Strategic partnerships with NGOs • Commitment to low-carbon and renewable energy mix at all mines. Where feasible, 20% renewable energy for all projects (Million tonne CO2-e) 2.0 1.5 1.0 0.5 0.0 Artist impression of the South Deep Solar PV plant • Development of predictive and dynamic water balance models at each operation • Commitment to transparency: – Carbon Disclosure Project (CDP) participation since 2007 – Water Disclosure Project (WDP) participation since 2012 – DJSI and GRI submissions since 2010 • ICMM collaboration on key climate change initiatives: – Piloted a climate data viewer tool – Undertook climate change vulnerability risk assessments at all our operations – Support the ICMM climate change statement – Signed the Paris Pledge for Action The Gold Fields Integrated Annual Report 201765 Our response – operational initiatives Group outcomes to date • Between 2013 and 2017, we have achieved: – Savings of 1,274TJ from energy initiatives – US$63m in cumulative cost savings – 282,900t CO2-eq in carbon emissions avoided • Energy security has slipped out of the Group top ten risks • Long-term leadership in climate and water disclosure and performance, recognised by the CDP • Selective power purchase agreements with independent producers for low carbon energy supply (gas) Group energy efficiency (GJ/oz) 6.0 5.5 5.0 4.5 4.0 3.5 0.070 6 5 . 4 2 0 . 5 0.068 7 2 . 5 0.063 (GJ tonnes/mined) 6 4 . 5 0.080 0.068 0.058 0.058 2014 2015 2016 2017 0.050 GJ/oz GJ/ tonnes mined Group energy spend (US$/oz) 200 180 160 140 120 100 8 5 1 9 3 1 0 3 1 5 1 1 2014 2015 2016 2017 Group CO2 emission intensity (tonnes CO2-eq/oz) 0.8 5 5 . 0 9 5 . 0 9 6 . 0 6 6 . 0 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2014 2015 2016 2017 Group water reuse/recycle (Mℓ) 45,000 44,000 43,000 42,000 41,000 40,000 9 0 4 , 2 4 0 2 1 , 3 4 9 8 2 , 3 4 4 7 2 , 4 4 2014 2015 2016 2017 Gruyere camp site p • Climate change risk assessment and mitigating u o r G • Regional water conservation initiatives (p99) actions in all regions (p96) Imminent finalisation of an agreement with an IPP to build and manage the 40MW solar photo-voltaic plant at South Deep. Expected commissioning in 2019. Benefits to South Deep: • Reduce reliance on state utility (Eskom), currently supplying 95% of electricity from coal sources • Will provide around 20% of South Deep’s electricity • Competitive tariffs • Reduce our Scope 2 carbon emissions Genser Energy gas power plants commissioned December 2016; 33MW gas turbines at Tarkwa and 22MW at Damang • Improved security of supply in 2017 – 100% to Damang; 60% to Tarkwa (100% during 2018) • Significant electricity cost savings – contributed to the regional US$18m in cost savings in 2017 p e e D h t u o S g n a m a D & a w k r a T h 25MW Aggreko gas turbines commissioned in 2016 and upgraded to higher efficiency turbines in 2017: t i m S y n n a r G e r e y u r G e c fi f O d a e H n o t d n a S • Estimated energy cost reduction of some A$100,000 per year from efficiency improvements • Earned A$126,000 in carbon abatement credits from the Australian Emissions Reduction Fund (ERF) after abating 21,000t CO2-eq Power purchase agreement signed with APA for 45MW gas power plant to supply the project. To be commissioned in October 2018 128 kW solar panels (commissioned in 2015): • Reduced grid electricity consumption by 45% between 2015 and 2017 • Reduced grid electricity costs by 44% between 2015 and 2017 The Gold Fields Integrated Annual Report 2017Safe operational delivery INNOVATION AND TECHNOLOGY 66 Innovation and Technology (I&T) is critical to improving health, safety, mined volumes and, ultimately, costs and efficiencies. During 2017, the I&T division at Gold Fields, which has technical oversight throughout the Group, started implementing the I&T strategy approved by the Board in late 2016. The thrust of the strategy is to modernise, integrate and optimise existing systems and processes. This will contribute significantly to ensuring mining volumes through compliance to plans and scheduling, and in turn, increase cost efficiencies. Only once this has been embedded would we consider a more comprehensive drive towards full mine automation. The ultimate goal of the strategy is to work towards the ‘Gold Fields Mine of the Future’, which is premised on automation, an integrated digital data platform, remote machine operation, virtual reality and reduced mining waste. In addition, partnerships with IT companies and original equipment manufacturers that are leaders in the field will be integral to successful implementation of the strategy. The strategy envisages three distinct phases, namely: • Horizon one (one – two years): Foundational and modernisation phase • Horizon two (three – seven years): Transformation to the Gold Fields Mine of the Future • Horizon three (seven years +): The Gold Fields Mine of the Future During 2017 the following milestones were achieved by Gold Fields’ operations in implementing the I&T strategy: • Purchased high-precision GPS drilling rigs at Cerro Corona and Tarkwa to improve drill efficiencies • Rolled out drone survey technology in West Africa for pit, waste dump and TSF surveys • Rolled out mine sense blending software and systems at Cerro Corona • Increased use of tele-remote systems from surface at Granny Smith • Calibrated and confirmed the Gold Fields I&T strategy by a group of young employees at the Company • Included I&T Horizon one performance objectives in the scorecards of key managers • Upgraded the Gold Fields technical structures During 2017, our regions were also tasked with developing and starting to implement their own roadmaps to support the Group’s objectives, including identifying I&T projects for implementation in 2018. The following reflect our major Group-wide project objectives for 2018: • Start to upgrade information technology and operating technology networks at all our operations. This includes installing underground wireless technologies in South Africa and Australia to enable real-time data availability to assist our teams in decision making (see diagram on the following page) • Defining the Company’s future operating platform – how will Gold Fields operate in a digital mining environment? • Rollout the ‘Mine of the Future Hearts and Minds’ programme among employees to develop a manufacturing mindset among the workforce at our operations The regional-specific objectives for 2018 are outlined below and span the exploration, mining and processing areas of the mining value chain: • The key focus for the Australian region is streamlining exploration time through better data management which enables faster interpretation of the resource to reserve process. Furthermore, St Ives is implementing collision avoidance and underground fleet management systems, while underground remote loading technology is also being reviewed at all our Australian mines • In Ghana, the focus will be on mine optimisation through upgrading of the Tarkwa and Damang fleet management systems and exploiting drilling opportunities through the use of the new GPS drill rigs. Drone survey technology will also be rolled out at both mines • The Cerro Corona mine will be using upgraded operating software and a new dispatch system that will focus on porphyry ore blending to reduce variation of stock feed, thereby optimising plant recoveries • The South Deep mine will upgrade its underground wireless connectivity and radio communications systems, which will enable it to use technologies such as real-time vehicle telemetry, people monitoring and environmental control. The mine will also seek to use spatial data systems that allow visualisation and monitoring of mining plans to improve efficiencies in mining processes The Gold Fields Integrated Annual Report 201767 I&T Strategy – New operating platform e t a t s e r u t u f g n i r e v i l e D e s a h p l a n o i t a m r o f s n a r T e s a h p l a n o i t a d n u o F ) s d r a w n o n e v e s s r a e y ( ) n e v e s o t e e r h t s r a e y ( ) o w t o t e n o s r a e y ( 3 n o z i r o H 2 n o z i r o H 1 n o z i r o H Sustain and gro Grow reserve life cash margin w old Field la tf G ti r r o p e p F u a o m t u r e n g s m i n e o f t h e f u t u r e Integratio n a n d o p t i m i s a t i o n Mod e r n i s a t i o n I m p a r n o v d e h s e a a f l t e h t y M a i n l i t c a i n e n c e S o c i a l H1 components of new operating platform to embed in GF With the emergence of new technology solutions, it is now possible to collect real-time data from across the value stream. With the implementation of new IT task management platforms, this production data can be compared to the mining plan in real time, allowing us to react immediately to changes from the plan. This new real-time production data will also be used to gain deeper business insight and, through the analysis of both spatial and task compliance, identify longer term patterns and constraints; this in turn will optimise our medium to long-term planning. Once the modernisation programme is completed, we will focus on the integration and optimisation phases. These phases aim to optimise the assets, through an integrated systems approach for all work and data streams. Operating in a fully integrated environment requires a culture change, making decisions based on data and a collaborative environment. We refer to this new operating environment as the future operating platform, creating greater business insights and driving consolidated strategic innovation based on data. Ü 1 2 4 ÙÚ 3 4 Integrated technical services Ú Install IT backbone and design architecture Ú Control room for dispatch and compliance to plan monitoringInstall OT data backbone and in-field connectivityReal-time task management systemsInformation transfer:– iPads with real-time data– Sensors on equipment– Visualised operationsCorrective action short interval controlMaintenance and service scheduleIT – information technologyVariance real-time feedbackOT – operational technologyIT / OT integration requiredAutomationTechnical aspects of the future operating platformThe Gold Fields Integrated Annual Report 2017Safe operational delivery Tailings storage facility at Cerro Corona Key measurements – capital discipline and financial performance1 Decent Work and Economic Growth Industry, Innovation and Infrastructure US$/A$ (average) R/US$ (average) Average US$ gold price received (US$/oz) Average A$ gold price received (A$/oz) Average Rand gold price received (R/kg) Revenue (US$m) AISC (US$/oz) AIC (US$/oz) Cost of sales2 (US$m) Total capital expenditure (US$m) Net cash-flow3 (US$m) Free cash-flow margin (%) Net debt (US$m) Net debt/adjusted EBITDA ratio4 Normalised earnings (US$m) Total dividend payment (R/share) Dividend as a % of normalised earnings 2017 Status 2016 2015 2014 0.77 13.33 1,255 1,640 538,344 2,811 955 1,088 1,404 840 (2) 16 1,303 1.03 154 0.90 39 0.75 14.70 1,241 1,675 0.75 12.68 1,140 1,541 0.81 11.56 1,249 1,404 584,894 478,263 441,981 2,750 980 1,006 1,388 650 294 17 2,545 1,007 1,026 1,456 634 123 8 2,869 1,053 1,087 1,678 609 235 13 1,166 1,380 1,453 0.95 186 1.10 35 1.38 40 0.25 33 1.30 85 0.40 34 1 All figures are for total operations (continued and discounted) 2 Cost of sales before amortisation and depreciation 3 Net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments 4 This measure is defined and reconciled in note 38 of the consolidated financial statements 2017 performance improvement on 2016 or achievement in line with strategy 2017 performance drop against 2016 2017 performance on par with 2016 Financial performance Capital discipline p70 p75 Capital discipline and financial performance To achieve our vision, we must deliver sustainable financial returns to our investors and shareholders. Our financial strategy differentiates the Group by focusing on growing the margin and free cash flow achieved for every ounce of gold produced. Results and impact Strategic responses – how we will achieve this • Allocate capital in line with strategic priorities as per capital ranking • Pay dividends in line with policy • Maintain net debt to EBITDA ratio of under 1.25x and extend debt maturity • All new capital spend to have appropriate returns taking into account risks and cost of capital ranked and prioritised in accordance with an agreed matrix and in line with internal capital control standards and study guidelines. Accordingly all growth capital expenditure on existing mines, new projects or acquisitions to have hurdle rates of 15% at a US$1,300/oz gold price • A sustained and significantly lower gold price and currency exchange rate volatility • South Deep – Partial achievement of the production targets as defined in the rebase plan and the associated loss of investor confidence Key initiatives Related risks Strong balance sheet maintained while investment in future growth continued Average US$ gold price received US$1,255/oz Key stakeholders Shareholders and investors FINANCIAL PERFORMANCE 70 Introduction The core focus of Gold Fields’ business strategy is to grow the margin and Free Cash-Flow (FCF) for every ounce of gold produced and to sustain this FCF in the long term. This ensures the Group remains lean and focused, with a globally diversified portfolio that provides investors with leverage to the gold price. However, to ensure the sustainability of FCF generation, reinvesting in and upgrading the portfolio is essential. As such, Gold Fields embarked on a period of reinvestment at the beginning of 2017, with 2017 and 2018 being the years of peak capital expenditure. Despite incurring project capital of US$115m at Damang, A$184m (US$141m) at Gruyere (including working capital), and R225m (US$17m) at South Deep, and spending US$53m at Salares Norte (currently in feasibility study), the net cash outflow was limited to US$2m during 2017. This compares to a net cash inflow of US$294m in 2016. Our key objective is to generate a FCF margin of at least 15% at a long-term planning gold price of US$1,300/oz, which translates to an All-in Costs (AIC) breakeven level of approximately US$1,050/oz. The Group’s FCF margin, which is adjusted for share-based payments, Salares Norte exploration expenditure and Damang and Gruyere project capital, decreased slightly to 16% in 2017 from 17% in 2016, driven primarily by an increase in taxes paid. Encouragingly, this is ahead of our targeted 15% FCF margin at a US$1,300/oz gold price, despite a gold price received of US$1,255/oz. Details of the Group’s production and cost guidance are contained in the Safe Operational Delivery section (p42). Gold Fields’ financial performance in 2017 was stronger than anticipated at the beginning of the year. The out performance of the international operations, coupled with a US Dollar gold price received that was much higher than our business planning price, enabled Gold Fields to restrict the cash outflow, limit the increase in net debt and maintain the strength of its balance sheet during the year. Net debt increased to US$1,303m during 2017 from US$1,166m at the end of 2016, resulting in a net debt/adjusted EBITDA of 1.03x at 31 December 2017 (December 2016: 0.95x). The Group maintained its policy of rewarding shareholders with dividends, paying out 39% of normalised earnings, or R0.90/share (2016: R1.10/share). For 2017, revenue increased by 2% to US$2,811m from US$2,750m in 2016, helped by the higher gold price received. Cost of sales (before amortisation and depreciation) increased slightly to US$1,404m, with the respective 9% and 3% strengthening in the Rand/US$ and A$/US$ exchange rates acting as headwinds. The bulk of Gold Fields’ costs in Australia and South Africa are incurred in local currencies. As such, the strengthening in the Australian Dollar and South African Rand had a negative impact on costs in US Dollar terms – and ultimately profits – in these geographies during 2017. However, the oil and Australian Dollar gold price hedges countered the negative currency impact in Australia. The Group AISC of US$955/oz and AIC of US$1,088/oz in 2017 compared with US$980/oz and US$1,006/oz in 2016. Encouragingly, costs came in below guidance (AISC: US$1,010/oz – US$1,030/oz; AIC: US$1,170/oz – US$1,190/oz) for the fifth consecutive year. The increase in AIC was primarily driven by the project capital incurred at Gruyere and Damang. Other salient features during 2017 included: • Royalty payments of US$62m in 2017 compared with US$78m in 2016 • An increase in capital expenditure to US$840m in 2017 from US$650m in 2016 • A decrease in the taxation charge to US$179m in 2017 (2016: US$190m) • An impairment of US$293m in 2017 (2016: US$77m), comprising mainly a US$278m impairment of South Deep (largely due to a lower Rand gold price utilised) • The provision of US$30m for the Silicosis and Tuberculosis class action in South Africa • A US$92m impairment reversal for the Arctic Platinum project and Cerro Corona assets Taking into account all of the above, the net loss attributable to Gold Fields shareholders amounted to US$19m in 2017, compared to earnings of US$158m in 2016. During 2017, our priorities for the cash we generated were: • Rewarding our shareholders with dividends Our policy is to pay out between 25% and 35% of normalised earnings • Funding growth projects which will improve the quality of the Gold Fields portfolio The bulk of the project capital is being spent on Damang in Ghana and Gruyere in Western Australia. Once these two mines reach full production, which is anticipated by 2020, they will significantly improve Group AIC and hence cash-generating ability • Maintaining the strength of the balance sheet and limiting the increase in debt through the peak capex years. Gold Fields ended 2017 on a net debt/adjusted EBITDA of 1.03x Once we have incurred all project capital expenditure on Damang and Gruyere, our target is to once again reduce our net debt/EBITDA to 1.0x and further after that The Gold Fields Integrated Annual Report 201771 Headline earnings were US$210m in 2017 compared to US$204m in 2016, while normalised earnings were US$154m in 2017 compared to US$186m in 2016. A detailed analysis of our financial performance is provided in the Management Discussion and Analysis of the Financial Statements contained in the 2017 Annual Financial Report on p32 – 91 Hedging Given the volatility in commodity prices and exchange rates and, more pertinently, the high levels of project capital expenditure incurred during the year, management found it prudent to undertake short-term, tactical hedging to protect cash- flows. In June 2017, Gold Fields hedged 78 million litres of oil at an equivalent Brent Crude swap price of US$49.92/bbl in the Australian region and 126 million litres at an equivalent Brent Crude swap price of US$49.80/bbl in the Ghanaian region. Net realised gains from these hedges, for the June – December 2017 period, were US$570,000 in Australia and US$850,000 in Ghana. Both hedges run until December 2019 and represent 50% of the annualised fuel consumption for the two regions. In addition, the Group hedged 295,000oz of the Australian region’s H2 2017 gold production by undertaking two Australian Dollar gold price hedges for the period July 2017 to December 2017: • 165,000oz with a floor price of A$1,696/oz and a cap of A$1,754/oz (averaged) • 130,000oz at an average forward price of A$1,720/oz The Group made a realised gain of A$20m (US$15m) on these hedges. Finally, Gold Fields hedged 8,250t of copper production from its Cerro Corona mine for the period August – December 2017 (about 70% of production for the period), with an average floor level of US$5,867/t and an average cap level of US$6,300/t. The Group made a realised loss of US$3m on this hedge. In late 2017/early 2018 Gold Fields has selectively hedged the gold price for our South African, Ghanaian and Australian operations and the copper price for the Peruvian region. Gold hedges include: • Ghana: 409koz (60% of 2018 gold production guidance) hedged for the period January to December 2018 using zero-cost collars with an average floor price of US$1,300/oz and an average cap price of US$1,409/oz • South Africa: 64koz (20% of 2018 gold production guidance) hedged for the period January to December 2018 using zero-cost collars with an average floor price of R600,000/kg and an average cap price of R665,621/kg • Australia: 321koz (37% of 2018 gold production guidance) hedged for the period February – December 2018. Of this, 221koz were hedged at an average forward price of A$1,714/oz and 100koz at a floor price of A$1,700/oz and an average cap price of A$1,750/oz Copper hedge: • Peru: 29.4Mt of copper production (98% of 2018 guidance) was hedged for the period January to December 2018 using zero-cost collars with an average floor price of US$6,600/t and an average cap price of US$7,431/t The Consolidated Income Statement, Statement of Financial Position and Cash-Flow Statement – extracted from the 2017 Annual Financial Report – are provided on the pages that follow Preparing for gold pour at Tarkwa The Gold Fields Integrated Annual Report 2017Capital discipline and financial performance FINANCIAL PERFORMANCE continued 72 Consolidated income statement for the year ended 31 December Figures in millions unless otherwise stated CONTINUING OPERATIONS Revenue Cost of sales Investment income Finance expense Gain/(loss) on financial instruments Foreign exchange (loss)/gain Other costs, net Share-based payments Long-term incentive plan Exploration expense Share of results of equity-accounted investees, net of taxation Restructuring costs Silicosis settlement costs Impairment, net of reversal of impairment of investments and assets Profit on disposal of investments Profit/(loss) on disposal of assets Profit before royalties and taxation Royalties Profit before taxation Mining and income taxation (Loss)/profit from continuing operations DISCONTINUED OPERATIONS Profit/(loss) from discontinued operations, net of taxation (Loss)/profit for the year (Loss)/profit attributable to: Owners of the parent – Continuing operations – Discontinued operations Non-controlling interests – Continuing operations (Loss)/earnings per share attributable to owners of the parent: Basic (loss)/earnings per share from continuing operations – cents Basic earnings/(loss) per share from discontinued operations – cents Diluted basic (loss)/earnings per share from continuing operations – cents Diluted basic earnings/(loss) per share from discontinued operations – cents United States Dollar 2017 2016 Restated1 2015 Restated1 2,761.8 (2,105.1) 5.6 (81.3) 34.4 (3.5) (19.0) (26.8) (5.0) (109.8) (1.3) (9.2) (30.2) (200.2) – 4.0 214.4 (62.0) 152.4 (173.2) (20.8) 13.1 (7.7) (18.7) (31.8) 13.1 11.0 11.0 (7.7) (4) 2 (4) 2 2,666.4 (2,001.2) 8.3 (78.1) 14.4 (6.4) (16.8) (14.0) (10.5) (86.1) (2.3) (11.7) – (76.5) 2.3 48.0 435.8 (78.4) 357.4 (189.5) 167.9 1.2 169.1 158.2 157.0 1.2 10.9 10.9 169.1 19 – 19 – 2,454.1 (1,988.5) 6.3 (82.9) (4.5) 9.5 (21.7) (10.7) (5.1) (51.8) (5.7) (9.3) – (206.9) 0.1 (0.1) 82.8 (73.9) 8.9 (248.5) (239.6) (8.2) (247.8) (247.3) (239.1) (8.2) (0.5) (0.5) (247.8) (31) (1) (31) (1) 1 Refer note 40 in the consolidated financial statements as part of the Annual Financial Report (AFS) for further details The Gold Fields Integrated Annual Report 201773 Statement of financial position as at 31 December 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 interests Total equity Non-current liabilities Deferred taxation Borrowings Provisions Long-term incentive plan Current liabilities Trade and other payables Royalties payable Taxation payable Current portion of borrowings Current portion of long-term incentive plan Total equity and liabilities 1 Refer note 40 in the consolidated financial statements as part of the AFS United States Dollar 2017 2016 Restated1 5,505.7 4,892.9 76.6 132.8 171.3 104.6 55.5 72.0 1,114.4 393.5 201.9 479.0 40.0 5,258.8 4,524.6 317.8 132.8 170.7 19.7 44.5 48.7 1,052.7 329.4 170.2 526.7 26.4 6,620.1 6,311.5 3,275.8 59.6 3,562.9 (1,817.8) 1,471.1 127.2 3,403.0 2,363.1 453.9 1,587.9 321.3 – 854.0 548.5 16.3 77.5 193.6 18.1 3,050.7 59.6 3,562.9 (2,124.4) 1,552.6 122.6 3,173.3 2,278.8 458.6 1,504.9 291.7 23.6 859.4 543.3 20.2 107.9 188.0 – 6,620.1 6,311.5 The Gold Fields Integrated Annual Report 2017Capital discipline and financial performanceFINANCIAL PERFORMANCE continued 74 Cash-flow statement for the year ended 31 December Figures in millions unless otherwise stated Cash flows from operating activities Cash generated by operations Interest received Change in working capital Cash generated by operating activities Interest paid Royalties paid Taxation paid Net cash from operations Dividends paid/advanced – Owners of the parent – Non-controlling interest holders – South Deep BEE dividend Cash generated by continuing operations Cash generated by discontinued operations Cash flows from investing activities Additions to property, plant and equipment Proceeds on disposal of property, plant and equipment Purchase of Gruyere Gold Project assets Purchase of investments Proceeds on disposal of investments Proceeds on disposal of Darlot Environmental trust funds and rehabilitation payments Cash utilised in continuing operations Cash utilised in discontinued operations Cash flows from financing activities Shares issued Loans raised Loans repaid Cash generated by/(utilised in) continuing operations Cash generated by discontinued operations Net cash (utilised)/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 1 The restatement is as a result of the discontinued operations United States Dollar 2017 762.4 1,286.5 5.1 (69.4) 1,222.2 (90.4) (66.0) (239.5) 826.3 (70.7) (62.8) (6.4) (1.5) 755.6 6.8 (908.6) (833.6) 23.2 – (80.1) – 5.4 (16.7) (901.8) (6.8) 84.2 – 779.7 (695.5) 84.2 – (62.0) 14.3 526.7 479.0 2016 Restated1 2015 Restated1 917.5 1,245.4 7.3 (2.3) 1,250.4 (81.7) (76.4) (155.6) 936.7 (40.7) (39.2) (0.2) (1.3) 896.0 21.5 (867.9) (628.5) 2.3 (197.1) (12.7) 4.4 – (14.8) (846.4) (21.5) 37.0 151.5 1,298.7 (1,413.2) 37.0 – 86.6 0.1 440.0 526.7 743.9 982.6 5.9 43.3 1,031.8 (86.8) (75.0) (117.2) 752.8 (28.9) (15.1) (12.1) (1.7) 723.9 20.0 (651.5) (614.1) 3.1 – (3.0) – – (17.5) (631.5) (20.0) (88.3) – 506.0 (594.3) (88.3) – 4.1 (22.1) 458.0 440.0 The Gold Fields Integrated Annual Report 201775 CAPITAL DISCIPLINE Enhancing free cash-flow Gold Fields recorded a net cash- outflow (net cash outflow from operating activities less net capital expenditure and environmental payments) of US$2m in 2017 compared to an inflow of US$294m in 2016. Included in the 2017 number is capital of US$115m and US$141m for Damang and Gruyere respectively, which was not incurred in 2016. South Deep recorded a net cash outflow of US$60m compared to a net cash inflow of US$12m in 2016. At a mine level, cash generation remained strong in 2017. Excluding project capital and exploration expenditure, mine cash-flow was US$441m (US$188m in Australia, US$117m in Peru, US$179m in Ghana and US$43m in South Africa) versus US$444m in 2016. FCF margin decreased slightly to 16% in 2017 from 17% in 2016, driven primarily by an increase in taxes paid. Encouragingly, this is ahead of our targeted 15% FCF margin at a US$1,300/oz gold price, despite the fact that the gold price received of US$1,255/oz was below the long-term planning level. To put our cash-flow generation in context, during 2017 our international mines in Australia, Ghana and Peru collectively generated net cash-flow (excluding project capital) of US$484m (2016: US$432m), while South Deep slipped into a cash negative position, due to lower than planned production. This demonstrates the robustness of our international portfolio of assets. Maintaining dividends Gold Fields has a long and well- established policy of rewarding shareholders by paying out between 25% and 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 pay-out of approximately 30 – 35% of normalised earnings every year over the past eight years. Despite recording a net cash- outflow, the Group maintained its dividend policy and declared a final dividend of R0.50/share for 2017. Together with the interim dividend of R0.40 per share (for the six months ended on 30 June 2017), this brings the total dividend for the year to R0.90/share, which translates to 39% of normalised earnings for the year. In 2016 we paid a total dividend of R1.10 per share. Maintaining a healthy balance sheet One of Gold Fields’ strategic objectives has been to reduce the amount of debt on our balance sheet. In this regard, management met its target of reducing net debt/ adjusted EBITDA to 1.0x by the end of 2016. However, having moved into a capital intensive phase of the Company’s life-cycle, management guided the market for a pick-up in net debt during 2017. As such, the focus has shifted to limiting the cash outflow, minimising the increase in debt and maintaining the strength of the balance sheet through the peak capital expenditure years (2017 and 2018). Net debt increased by US$137m during 2017 to US$1,303m at the end of December 2017 from US$1,166m at the end of December 2016. However, given the outperformance of the international portfolio, less capital expenditure incurred at Gruyere than planned and a higher gold price than budgeted, Gold Fields comfortably ended 2017 on a net debt/adjusted EBITDA ratio of 1.03x. Having refinanced and extended the maturity of our credit facilities in June 2016, with the first material debt maturity falling due in June 2019, and having entered into an A$500m revolving credit facility in June 2017, Gold Fields’ balance sheet is in a stable position with regards to solvency and liquidity. At the end of 2017, the Group had uncommitted loan facilities of R1.65bn and committed loan facilities totalling US$2.54bn, A$500m and R2.5bn, of which US$1.2bn, A$200m and R1.7bn respectively are unutilised. Our debt is currently rated Ba1 by Moody’s and BB+ by Standard & Poor’s, unchanged from 2016. The Gold Fields Integrated Annual Report 2017Capital discipline and financial performanceCAPITAL DISCIPLINE continued 76 Improving investor and analyst confidence Central to Gold Fields’ vision of being the leader in sustainable gold mining is the generation of FCF to provide investors with positive leverage to the price of gold. We believe that the achievement of this objective is a prerequisite for improving the confidence with which both current and potential investors view the Company. Gold Fields is a significantly smaller, more focused and leaner company than it was prior to the unbundling of the legacy South African gold mines into Sibanye Gold (now Sibanye-Stillwater) in 2013. The unbundling resulted in Gold Fields’ portfolio transitioning into one that is focused on mechanised underground and open-pit mining and one that is more geographically diversified. During 2017, 42% of our production came from our Australian mines, 32% from Ghana, 14% from Peru and 12% from South Africa. Given the ramp-up schedule at South Deep, the reinvestment project at Damang and the development of Gruyere, the geographic spread of production is set to shift in years to come, but will remain well diversified on a global scale. After three consecutive years of cash-flow generation, in which the Company produced a cumulative US$652m in net cash-flow, Gold Fields entered into a reinvestment phase in 2017. Investment at the Damang mine and Gruyere project commenced at the beginning of the year, while expenditure on near-mine exploration in Australia remained at similar levels to 2015 and 2016. Exploration drilling at Salares Norte in Chile continued during 2017 and we expect to complete the feasibility study by the end of 2018. Notable investments made during 2017 include: • A$184m (US$141m) was spent on the Gruyere project in Western Australia. More details on p84 • US$115m in project capital was spent at our Damang mine in Ghana. More details on p81 • Near-mine exploration spending of A$99m (US$75m) in Australia (including Gruyere) and US$11m in Ghana. More details on p86 • US$53m investment on further exploration and drilling at Salares Norte in Chile. More details on p85 Given the level of capital expenditure incurred during the year (project capital and Salares Norte exploration totalled US$270m in 2017), the Group recorded a net cash outflow of US$2m, compared to an inflow of US$294m in 2016. However, at a mine level, cash generation remained positive in 2017. Excluding project capital and Salares Norte exploration expenditure, mine cash-flow in 2017 was US$441m (US$188m in Australia, US$117m in Peru, US$179m in Ghana and an outflow of US$43m in South Africa) versus US$444m in 2016. Aerial view of Salares Norte showing access to drill sites The Gold Fields Integrated Annual Report 201777 royalty portfolio with Toronto-listed Maverix Metals in exchange for a 32% interest. A summary of our investments is in the table below. While the international portfolio had another good year, the first year of the rebase plan at South Deep proved challenging. But despite the slow start, the integrity of the rebase plan remains intact and delivery on the plan is a key focus area where management believes it can improve investor confidence. Unlocking the intrinsic value of the asset, which contains the world’s second largest undeveloped gold resource, is an important element of the long-term strategy of the Company. While many of the initiatives to build trust with our investors have a financial and operational focus, sustainability is entrenched throughout our business. This commitment is evident in the recognitions received. Gold Fields has consistently been ranked among the top five mining companies on the Dow Jones Sustainability Index since it first entered the index around six years ago, illustrating our commitment to sound environmental, social and governance principles. Shareholding Value (US$m) 19.8%1 9.9% 27.9% 19.9% 6.2% 25.7% 29 47 57 11 10 8 162 Gold Fields also invested US$21m for a 19.8% stake (partially diluted as at end-December 2017) stake in ASX-listed Cardinal Resources, which owns a number of greenfields exploration sites in Ghana, and bought a 9.9% stake in Gold Road Resources, our joint venture partner in the Gruyere project, for US$55m. Gold Road holds exploration licences in other areas of the prospective Yamarna Goldfields in Western Australia. During 2017 Gold Fields sold the Darlot mine in Western Australia to junior miner Red 5. Subsequent to year-end the Arctic Platinum Project in Finland, was sold for US$40m. In 2016 the Company injected its Gold Fields’ material investments Investment Cardinal Resources Gold Road Resources Maverix Metals Red 5 Hummingbird Resources Rusoro Mining Total value 1 Partially diluted as at end-December 2017 The Gold Fields Integrated Annual Report 2017Capital discipline and financial performanceDecent Work and Economic Growth Industry, Innovation and Infrastructure Key measurements – Portfolio management 2017 Status 2016 2015 2014 2013 Attributable Gold Mineral Resources (Moz) Attributable Gold Mineral Reserves (Moz) Attributable Copper Mineral Resources (Mlb) Attributable Copper Mineral Reserves (Mlb) Near mine exploration (US$m) 103.763 49.005 4,881 764 87 Near mine exploration – metres drilled 754,669 101.494 102.210 108.843 113.398 48.112 46.064 48.123 48.608 5,813 5,912 6,873 454 79 532 72 620 58 7,12 708 32 694,527 651,189 349,511 250,138 2017 performance improvement on 2016 or achievement in line with strategy 2017 performance drop against 2016 2017 performance on par with 2016 Gold Fields’ attributable Mineral Resources 104Moz Managing our portfolio Life extension through near-mine exploration Mineral Resources and Reserves summary p80 p86 p88 Portfolio management Mining is a long-term game. As a business, we need to balance the needs of our existing portfolio while investing in the future, through a variety of projects across the globe. Through our reinvestment projects as well as our growth projects we are able to balance short, medium and long-term value creation Truck hauling ore from the Invincible pit at St Ives Results and impact Strategic responses – how we will achieve this Key initiatives Related risks • Use portfolio management and strategic planning to inform acquisitions and disposals • Life extension through brownfields exploration, mergers and acquisitions (M&A) and optimisation • Implement business improvement and efficiency projects to reduce costs • Reduce costs through innovation and technology projects • Deliver life extension, cost reduction, revenue enhancement and improved health and safety through innovation and technology and business improvement initiatives • Reduce Group life-of-mine, AIC/oz and increase reserve life per region through brownfields exploration, M&A and optimisation of existing mines • Deliver positive Salares Norte feasibility project that exceeds metrics set for the project • Mine closure costs, along with concurrent rehabilitation plans, incorporated into strategic plans • A sustained and significantly lower gold price and currency exchange rate volatility • South Deep – Partial achievement of the production targets as defined in the rebase plan and the associated loss of investor confidence • South Deep – Logistics and utilities infrastructure • Non-delivery of Damang reinvestment and Gruyere projects • Replacing Resources and Reserves at international operations Improving the quality of our portfolio and ensuring that current levels of production are sustainable for the next eight to ten years Key stakeholders Shareholders and investors Employees Governments MANAGING OUR PORTFOLIO 80 Gold Fields manages its assets to improve the overall quality of its portfolio and ensure the sustainability of the cash-flow generated by this portfolio. In this regard, the focus is on reducing Group all-in costs (AIC), increasing the free cash-flow per ounce and extending the life of the assets. Elements of the portfolio management process include: • Acquiring or developing lower- cost (than Group average), longer-life assets • Disposing of higher-cost, shorter- life assets that management believes can be better served by a company that has more time and resources to commit to them • Extending the life of current assets through near-mine brownfields exploration • Focusing on in-country opportunities to leverage off our existing footprint, infrastructure and skills set and capitalise on the experience we have gained from operating in these jurisdictions Sustaining a quality portfolio of assets On an annual basis, all assets in our portfolio are subject to the Group’s strategic planning process. A scenario analysis is conducted for each operation, assessing how to best maximise cash-flow, life-of- mine and margin. The results of this analysis are then used in conjunction with the Group’s capital profile and the current economic environment as inputs into our annual business planning. As a result of this process, the following key decisions were implemented with regards to the existing portfolio during 2017: • Reinvestment into Damang in Ghana commenced at the beginning of the year, which will extend the mine’s life to 2025. During 2017, US$115m in project capital was incurred, primarily on waste stripping (p81) • Gold Fields began operating the Gruyere project in Western Australia in February. We spent A$184m (US$141m) on the project during 2017. Gold Fields also bought a 9.9% stake in Gold Road Resources, the joint venture partner at Gruyere (p84) • Gold Fields continued to streamline its portfolio by selling Darlot in Western Australia to Red 5. The sale, which closed on 2 October 2017, saw Gold Fields receive A$7m (US$5m) in cash as well as Red 5 shares as part of the purchase consideration and as a consequence of partially underwriting a rights issue undertaken by Red 5. The net result is that Gold Fields has a 19.9% shareholding in Red 5 post the sale • Building up a 19.8% stake (partially diluted as at end- December 2017) in ASX-listed Cardinal Resources, which manages a number of greenfields exploration projects in Ghana • Subsequent to year-end, we sold the palladium-rich, polymetallic Arctic Platinum Project in Finland to private equity firm CD Capital for US$40m and future royalties. APP was a non-core asset in our portfolio The only operating asset in the Group that still needs to be brought to full account is the South Deep mine in South Africa. After what was a key milestone for the mine when it broke even for the first time in 2016 by generating net cash inflow of US$12m, South Deep reported a net cash outflow of US$60m in 2017, similar to the loss forecast in the rebase plan. This negative swing was driven by a lower Rand gold price received in 2017 together with lower than planned production in Q1 2017, when we experienced two fatal accidents and three falls of ground. (Refer to p82 for an update on South Deep.) The strength of our international portfolio is evident in the continued net cash-flow generation of our assets in Australia, Ghana and Peru, which collectively generated US$484m (excluding project capital) during 2017 (2016: US$432m). Furthermore, our portfolio’s free cash-flow (FCF) margin was 16% in 2017 from 17% in 2016, which is ahead of our targeted 15% long-term planning target at a US$1,300/oz gold price. Investing in the future – a quality portfolio The gold mining business is a long-term game, which has to be sustainable through price cycles and volatility of the commodity markets. Therefore, in order to grow and sustain cash-flow, investment is necessary. After three consecutive years of strong cash-flow generation, Gold Fields reached a point where reinvestment in the portfolio became necessary in order to ensure the longevity of this cash generation. As such, the Group entered 2017 with the focus on reinvesting in the business to ensure that we are able to deliver sustainable free cash-flow for the benefit of all stakeholders. Importantly, management has only embarked on investments and capital expenditure that it believes have excellent potential for pay- backs and returns. In addition, our investment drive in 2017 and 2018 does not mean that our overall strategy has changed. We remain focused on generating cash to reduce our debt, pay dividends to shareholders and share the value we create with employees, governments and host communities. While the Group spent more than it generated in 2017, the final cash outflow at US$2m was significantly lower than anticipated at the beginning of the year. All project capital incurred was in countries in which Gold Fields currently operates, allowing us to leverage our knowledge of the business environment, our existing footprint and infrastructure and the skills set at our mines there. Over the next few pages we discuss the Company’s growth and exploration projects, whose implementation will be critical in sustaining Gold Fields for the long term. The Gold Fields Integrated Annual Report 201781 Damang reinvestment project In October 2016, Gold Fields announced its reinvestment plan for the Damang mine in Ghana, which will extend its life-of-mine (LoM) to 2025. The reinvestment has enhanced the Group’s presence in one of our key regions and resulted in significant social benefits for the country, including the creation and preservation of 1,850 direct and indirect employment positions. The reinvestment plan entails a major cutback to both the eastern and western walls of the Damang Pit Cutback (DPCB). The cutback will have a total depth of 341m, comprising 265m pre-strip to access the base of the existing pit. This will be followed by a deepening of the pit by a further 76m which will ultimately provide access to the full Damang orebody including the high grade Tarkwa phyllite lithology. To provide short-term ore supply while the Damang pre-strip is in progress, mining is taking place at the hydrothermal Amoanda pit as well as the paleaoplacer satellite pits (Lima South, Kwesi Gap and Tomento East). In addition, the processing plant feed will be supplemented by low-grade surface stockpiles. The DPCB project, which commenced on 23 December 2016, got off to a strong start and is currently tracking well against the project plan. During 2017, total tonnes mined were 39.7Mt against the original project schedule of 32.6Mt, driven by a good performance from both of the contractors (BCM and E&P). Gold produced of 144koz was 29% higher than guidance of 120.0koz, underpinned by high-grade material from the Amoanda pit, while AIC of US$1,827/oz was significantly below guidance of US$2,250/oz. Project capital of US$115m was spent during 2017, compared to the budget of US$120m. Construction of the Far East Tailings Storage Facility (FETSF) commenced during Q1 2017, and the facility was commissioned by year-end, on time and within budget. The FETSF will provide cost effective tailings capacity of 44Mt. Decommissioning of the East Tailings Storage Facility (ETSF) commenced during Q1 2018. Production guidance for 2018 is 160koz at an AIC of US$1,520/oz with project capital of US$105m. Damang metallurgical plant The Gold Fields Integrated Annual Report 2017Portfolio managementMANAGING OUR PORTFOLIO continued 82 South Deep 2017 was a year of two halves for South Deep, with Q1 2017 negatively impacted by two fatal accidents and three falls of ground in the higher grade section of the mine which resulted in a deferral of mining higher grade areas. Production recovered through the rest of the year, with production in H2 2017 increasing by 36% to 5,038kg (162koz) from 3,710kg (119koz) in H1 2017. Production for the year was 11% below original guidance – as flagged in the Q3 2017 operating results in October 2017 – at 8,748kg (281koz), compared to 9,032kg (290koz) in FY16. AIC increased 3% year-on-year to R600,109/kg (US$1,400/oz) from R583,059/kg (US$1,234/oz) in 2016, 3% higher than guidance of R585,000/kg. Performance of key activities included: • The mine recorded net cash outflow of R804m (US$60m) in 2017 compared with the rebase plan which forecast an outflow of R830m • Development decreased by 1% to 6,897 metres in 2017 from 6,933 metres in 2016. New mine development increased by 20% year-on-year to 976 metres from 811 in 2016 • Long hole stoping volumes increased by 3% to 767kt in 2017 (2016: 745kt) • Destress mining increased by 3% year-on-year to 33,419m2 (2016: 32,333m2) • Backfill placed was 11% lower year-on-year at 333m3 While good progress has been made on the technical front, with the implementation of the mining method receiving positive feedback from the Geotechnical Review Board, a group of pre-eminent international recognised geotechnical experts, the execution of the full mining value chain remains sub-optimal. At year-end, there was a goodwill impairment of R3.5bn (US$278m) (gross and after tax) related mainly to a reduction in the gold price assumption used in the life-of-mine impairment model to R525,000/kg from R600,000/kg and the slow start to the rebase plan (announced in February 2017) in 2017. Post this impairment, the carrying value of South Deep is R24.7bn (US$1.96bn). We now expect a more gradual build-up to steady state production of approximately 500koz by 2022, with most of the metrics unchanged from the original rebase plan. In October 2017, we noted that there would be a knock-on impact on 2018 production. We expect production for 2018 to be 10,000kg (321koz), 10% lower than the rebase plan. However, we expect AIC to be R540,000/kg, compared to R567,910/kg in the rebase plan. The table below provides detail on the more gradual build-up to steady state. Key to achieving the rebase plan is an increased focus on the North of Wrench area (new mine), which will allow for bulk, non-selective mining. The contribution from the new mine will increase to 70% at steady state in 2023 from the current level of 43%. As the mine continues its ramp-up, there is continued focus on stakeholder management. In particular, there are a number of initiatives in place with organised labour to drive productivity, improve efficiencies and align workforce structures with the cost profile of the mine. South Deep rebase plan – key metrics 2017 2018 2019 2020 2021 2022 Gold production Destress metres Cost of sales1 Total capital expenditure AISC AIC kg koz m2 Rm Rm R/kg R/kg 8,748 281 32,333 4,062 1,099 574,406 600,109 10,002 321 43,242 4,035 1,102 500,000 540,000 10,846 349 53,013 4,185 1,705 518,123 557,457 11,924 383 50,202 4,365 1,494 474,967 504,662 13,287 427 50,264 4,371 1,643 430,415 464,774 14,926 480 45,689 4,524 1,424 409,686 409,686 1 Cost of sales before amortisation and depreciations The Gold Fields Integrated Annual Report 201783 South Deep – Comparison between current and new mining areas Current mine North of Wrench (New mine) • Mining method: Scattered and selective remnant mining • Mining method: Bulk, non-selective mechanised mining • Infrastructure: Tailored to mining method. Trackless with • Infrastructure: Legacy. Rail bound transport transport of ore to be via conveyor of ore • Reserves: 1.7Moz • Current production contribution: 53% • Steady state production contribution: 30% • Reserves: 9.0Moz • Current production contribution: 47% • Steady state production contribution: 70% Current mine North of Wrench The South Deep mine in South Africa The Gold Fields Integrated Annual Report 2017Portfolio management MANAGING OUR PORTFOLIO continued 84 Gruyere In November 2016, Gold Fields entered into a 50:50 joint venture with Australian exploration company, Gold Road Resources, for the development and operation of the Gruyere gold project, one of the country’s largest undeveloped gold projects. The joint venture comprises the Gruyere gold deposit and a number of exploration tenements. Gruyere is a large shear hosted porphyry gold deposit, with a combined total Mineral Resource of 6.72Moz and Mineral Reserve of 3.74Moz, 50% of which is attributable to Gold Fields. It is located in Australia’s newest goldfields, the Yamarna Belt, 200km east of Laverton in Western Australia, where our Granny Smith mine is located. Early work at Gruyere began in December 2016, with Gold Fields taking over operatorship of the project on 1 February 2017. The project construction schedule remains unchanged, with engineering progress at 72% and construction progress at 32% as at end-December 2017. Gruyere remains on track to pour first gold during Q1 2019. Costs incurred to date are also in line with the project budget, which was slightly increased to A$532m (US$411m) (100% basis) in early 2017 following a detailed review of the feasibility study. A$477m (US$358m) of the total capital cost has been committed, with A$186m (US$143m) already spent. The Gruyere village, which includes 648 rooms, offices and recreational facilities, was commissioned during H1 2017, as was the borefield that will supply potable water for the project. The Bulk Earthworks contract was awarded to MACA Civil in May 2017. The 28km Gruyere main access road and sealed airstrip were completed in H2 2017, while the pit and tailings storage facility (TSF) areas were cleared during Q4 2017. Construction of the TSF embankment walls is scheduled for completion during H1 2018. The engineering, procurement and construction contract for the Gruyere processing plant and the associated infrastructure was awarded to Amec Foster Wheeler Civmec JV. Construction of the seven carbon-in-leach tanks is progressing to plan. During H1 2017, a power supply contract was signed with APA Group, a leading Australian energy infrastructure business. APA has received final approval from the Western Australian Department of Mines for the 198km Yamarna gas pipeline, which is scheduled for completion in H1 2018. Civil and structural works have also begun at the 45MW gas-powered Gruyere power plant, which will be connected to the gas pipeline, and will supply the mine’s energy needs for the life-of-mine. The Yeo borefield will serve as the main process water source for the Gruyere processing plant. All 32 production boreholes have been drilled and installation of the 95km water pipeline to the processing plant has commenced. Installation of the 22kV overhead power line servicing the borefield is scheduled to commence in Q2 2018. Finally, the mining services contract, which has a cost of approximately A$400m (US$300m) over a five-year term, was executed with Downer EDI in Q4 2017. Downer began mobilising their workforce during Q1 2018 to begin construction of the mining infrastructure. Mining activities are planned to commence in Q4 2018. Total project capital of A$311m (US$249m) (100% basis) has been budgeted for 2018. The tenements comprising the Gruyere Project are held subject to the native title rights of the traditional owners of the land, with many of its members residing in the nearby Cosmo Newberry town. The joint venture partners have a Native Title Agreement in place which provides access to the area, subject to a number of heritage protection protocols and the provision of financial, contracting, and employment benefits to the local Aboriginal people. They are required to establish a corporation (known as a Prescribed Body Corporate) to hold and administer the native title rights and interests on behalf of all group members, which has commenced. The JV partners have implemented a number of projects with the local Aboriginal people, including cultural awareness training for Gruyere employees and contractors. Contractors at Gruyere have also been mandated to employ members of the local Aboriginal people – a target of 18 employees has been set for mid-2018. The Gold Fields Integrated Annual Report 201785 indicate the following metrics for the project: • A Mineral Resource of 23.3Mt at 4.9g/t of gold and 66g/t of silver, with 95% in the Indicated category • Annual throughput of 2Mt per annum • 3.5Moz produced over LoM • An AISC of US$575/oz • Project capital of US$850m The project envisages open-pit operations with a processing plant that includes both CIP and Merrill Crowe processes, due to the high silver content of the ore. Importantly, land easement was granted on 30 May 2016 (for 30 years) and water rights for the project were obtained on 29 December 2016, with the regulator granting Gold Fields access to 114 litres/second (more than double what the project requires). US$129m in 2015, 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. A further condition is the renewal for a further 25 years of the existing mining tenement in which most of the FSE deposit occurs. This is pending resolution. The application for a FTAA was denied by the Mines and Geo- Sciences Bureau (MGB) in November 2015. FSGRI filed a motion for reconsideration with the MGB to reinstate the FTAA application but this motion remains Salares Norte The Salares Norte 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 1,800ha concession area. Gold Fields has an option to purchase an adjoining concession that would add a further 1,200ha. The Group spent US$53m on feasibility study work and further drilling in 2017 (2016: US$39m), during which time the studies for the Brecha Principal and Agua Amarga orebodies were merged into one study. In late 2017 Salares Norte was progressed to interim feasibility status. During 2018, US$83m is budgeted for completion of the feasibility study and district exploration in a 20km radius around the project on prospective ground. The interim results from the feasibility study Far Southeast 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 19.8Moz of gold and 9,921Mlb of copper. This has not been updated. 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. Gold Fields impaired its investment in Far Southeast to During 2017 Salares Norte also completed the environmental and social baseline to support the project schedule as part of its Environmental and Social Impact Assessment (ESIA). This work entails baseline research comprising social, hydro-geological, flora and fauna studies, including research and recommendations on the protection of the endangered Short-tailed Chinchilla in the area. Once the ESIA and baseline studies have been concluded – expected in April 2018 – the team will present the findings to the relevant Chilean regulators. While there are no indigenous claims or community presence on the concession or the dedicated access routes, Salares Norte has embarked on an extensive early engagement programme with communities and other stakeholders in the wider vicinity of the project as part of the ESIA. During 2017, US$265,000 was spent on community initiatives. pending. The application for Certification Precondition from the National Commission on Indigenous People (NCIP), which will complete the FPIC process, is also under consideration by the NCIP. This process was held in abeyance by the NCIP pending renewal of the existing mining tenement. Amid the legal and administrative delays, the holding costs of this project have been reduced to approximately US$180,000/month, related mainly to detailed studies of existing drill core, environmental monitoring, community engagement work as well as activities to support the permitting process. Further material development of the project will be dependent on the renewal of the Mineral Production Sharing Agreement and Gold Fields obtaining majority ownership of the project. The Gold Fields Integrated Annual Report 2017Portfolio managementLIFE EXTENSION THROUGH NEAR-MINE EXPLORATION 86 Near-mine exploration plays a key role in Gold Fields’ strategy as we believe it offers one of the lowest- cost opportunities for growing cash-flow, particularly on a per share basis. The value in near-mine exploration lies in: • Knowledge of the ore bodies which enables the exploration teams to identify extensions or additional ore sources housed within the mining tenement • Operational capabilities, including Gold Fields’ proven ability to develop and mine orogenic ore bodies • Regional and operational infrastructure including existing processing plants and regional management teams In addition to adding to Gold Fields’ Mineral Resource and Mineral Reserve base, near-mine exploration: • Extends the life of the Group’s existing mines • Ensures each region can continue to leverage its infrastructure • Provides a robust platform for regional growth The benefits of effective near-mine exploration are evident in the history of the Agnew and St Ives mines in Western Australia. At the time of their acquisition in 2002, the mines had a combined Mineral Reserve of 2.9Moz. Since then, the two assets have produced over 10Moz and their combined Mineral Reserves still exceed over 2Moz following annual depletions. Gold Fields believes that most of its mines in Australia (which share similar orogenic ore bodies) will be able to repeat this success over the next few years. In 2017, Gold Fields spent US$87m on near-mine exploration (2016: US$80m), which supported a total of 754,669 metres of near-mine drilling (2016: 694,527 metres). The majority of this spending – US$75m (A$99m) – was incurred at our Australian mines. US$11m was spent in Ghana, which is significantly higher than the US$3m spent in the region in 2016, amid a renewed focus on extending the life of the Tarkwa and Damang mines. At our Cerro Corona mine in Peru, near-mine exploration is limited by the mining lease area. However, Gold Fields continues to engage the adjacent communities about the potential of future exploration in these areas. For 2018, we have budgeted US$87m for near-mine exploration of which US$65m (A$86m) will be at our Australian operations. Our Australian mines have successfully extended their lives through a consistent investment in brownfields exploration activities. Following is a breakdown of brownfields exploration at our operations during 2017: commenced towards the end of 2017. The Invincible complex continues to grow and is expected to remain a key contributor to production at St Ives for many years to come. A favourable advanced scoping study on the palaeochannel project has resulted in the project moving into pre-feasibility stage. The first part of the study will focus on evaluating a viable mining method and is expected to be completed by the end of 2018. The potential resource being assessed on this project is in the range of 2Moz – 3Moz. Agnew Agnew Mineral Reserve reconciliation (Gold – Moz) 2 5 . 0 5 2 . 0 0.6 8 2 . 0 4 5 . 0 St Ives St Ives Mineral Reserve reconciliation (Gold – Moz) 4 7 . 1 0 4 . 0 0.5 0.4 0.3 0.2 0.1 0.0 3 2 . 0 7 5 . 1 Dec 2016 Mined depletion Growth Dec 2017 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Dec 2016 Mined depletion Growth Dec 2017 At St Ives, total exploration spend in 2017 was A$39m (US$29m). A total of 225,665 metres were drilled during the year, resulting in a 17% increase in Mineral Resources to 3.8Moz by the end of 2017. Taking into account the depletion of 364koz during 2017 Mineral Reserves at St Ives declined by 10% from 1.74Moz 1.57Moz. During 2017, exploration was focused on resource extension at Invincible, lateral resource extension at Hamlet underground and continued testing of the palaeochannel opportunities. Mining at Invincible underground A$28m (US$22m) was spent on exploration at Agnew during 2017 and a total of 194,910 metres were drilled during the year. Encouragingly, Agnew increased reserves after depletion during 2017, which is the first time the mine has achieved this in seven years. Mineral Reserves increased 4% to 0.54Moz, while Mineral Resources decreased 9% to 1.95Moz. During 2017, exploration focused on resource extension at the Waroonga North underground mine and detailed in-mine targeting at Waroonga North, Kath and New Holland ore bodies. Currently, Waroonga North has 170koz in resource and 79koz in reserve, while the adjacent Kath lode has 90koz in resource and 36koz in reserve. In 2018, the focus will be on further defining these ore bodies as we believe there is reasonable upside potential. The Gold Fields Integrated Annual Report 2017Damang Damang Mineral Reserve reconciliation (Gold – Moz) 7 6 . 1 6 1 . 0 1 2 . 0 3 7 . 1 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Dec 2016 Mined depletion Growth Dec 2017 While the focus at Damang was in implementing the reinvestment plan (p81), Gold Fields also spent US$5.7m in near mine exploration during the year. A total of 35,265 metres were drilled. This resulted in a 0.05Moz (4%) increase in Mineral Reserves to 1.73Moz and a 0.14Moz (2%) increase in Mineral Resources to 6.12Moz by 31 December 2017. Granny Smith Granny Smith Mineral Reserve reconciliation (Gold – Moz) 2.5 2.0 1.5 1.0 0.5 0.0 1 8 . 0 0 2 . 2 9 6 . 1 0 3 . 0 Dec 2016 Mined depletion Growth Dec 2017 Total exploration spend at Granny Smith was A$25m (US$19m). A total of 227,357 metres were drilled during the year. This resulted in a 0.51Moz (30%) increase in Mineral Reserves and a 0.56Moz (9%) increase in Mineral Resources at Wallaby underground, the main ore body of the mine. Following a positive feasibility study of Zone 110/120, the Board has approved the development of this extension to the Wallaby underground mine. This contains Mineral Reserves of 1.3Moz and Mineral Resources of 2.5Moz and will extend Granny Smith’s life to 2027, before consolidation of Zones 135 and 150 below the current ore body. Exploration has generated additional advanced targets on the tenement package, which will be targeted in future as additional sources of mill feed. As at 31 December 2017, Granny Smith’s Mineral Resources and Mineral Reserves were 7.08Moz and 2.20Moz, respectively. 87 Tarkwa Tarkwa Mineral Reserve reconciliation (Gold – Moz) 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 8 0 . 6 1 6 . 0 3 4 . 0 1 9 . 5 Dec 2016 Mined depletion Growth Dec 2017 During 2017, Tarkwa intensified its near-mine exploration efforts, spending US$5.4m on drilling 36,324 metres. Tarkwa’s Mineral Reserves decreased by 0.18Moz (3%) and Mineral Resources by 0.44Moz (5%), although the area being drilled is highly prospective. As at 31 December 2017, Tarkwa’s Mineral Resources and Mineral Reserves were 8.66Moz and 5.91Moz, respectively. View of the Rom pad and plant at Granny Smith The Gold Fields Integrated Annual Report 2017Portfolio managementMINERAL RESOURCES AND RESERVES SUMMARY 88 This condensed summary should be read in conjunction with the Gold Fields Mineral Resource and Mineral Reserve Supplement that is set out to provide relevant details on the Company’s Mineral Resources and Mineral Reserves as at 31 December 2017. In addition to providing transparent and compliant information in accordance with the SAMREC Code, 2016 edition, the Supplement highlights issues viewed as material to reporting the Mineral Resource and Mineral Reserve estimates per mining asset and growth project. The Company’s current investment programme is configured to drive Mineral Resource and Reserve development and deliver returns from the asset portfolio over the years ahead through the replacement of production depletion, organic growth, increased flexibility and life extension. Gold Fields’ investment in operating mines, projects and corporate development has retained a strongly positive outlook and has been integral to maintaining a steady year-on-year Group Mineral Resource and Mineral Reserve position, despite depletion and the numerous challenges affecting the mining industry globally. Gold Fields’ strategy of focusing on brownfields (on-lease) exploration to extend mine life continued during the year. The multi-year investment in exploration, focusing on Australia and Ghana, is continuing to yield good results. It is set up to deliver a balanced project pipeline that includes identifying early stage targets that will deliver into the medium to longer term life of mine. This investment is combined with progressing more advanced projects that can potentially provide new mining opportunities within the next two to three years. The emphasis at all mine sites is to strive for Mineral Reserve growth that at least replaces annual depletion, improves cash-flow and costs per ounce and maintains momentum on discovery. The sites are also encouraged to convert Resources to Reserves so as to maintain business plan production profiles and cash-flow projections. Portfolio management aims to improve the overall quality of the assets to sustain free cash-flow (FCF) per ounce targets by acquiring or developing lower-cost, longer life assets and disposing of higher-cost, shorter life assets. It also seeks to drive on-lease exploration while assessing emerging in-country opportunities to leverage off our existing infrastructure and resources. In support of the Company’s Resource and Reserve development strategy, the execution of a number of key projects characterised 2017. The projects include embedding the South Deep rebase plan, maintaining traction on the Damang reinvestment plan, significant life extension at Cerro Corona and advancing the Gruyere project construction schedule. In addition, the strong Resource and Reserve growth at Granny Smith, the development of the new Waroonga North mining front at Agnew, the extension of the Invincible complex at St Ives and the advancement of Salares Norte towards a maiden Reserve, were noteworthy achievements. Darlot and the Arctic Platinum Project were divested in line with the portfolio management strategy and their Resources and Reserves are not part of the 2017 declaration. Metal prices and exchange rates This declaration is based on a Mineral Resource gold price of US$1,400/oz (A$1,850/oz; R600,000/kg) and a Mineral Reserve price of US$1,200/oz (A$1,600/oz; R525,000/kg). The gold price of US$1,200/oz used for the Mineral Reserve declaration is within the guidelines of the US Securities and Exchange Commission (SEC). The copper price used for the Mineral Resource estimation is US$3.20/lb and for the Mineral Reserve estimation US$2.50/lb, increasing to US$2.80/lb from 2020 onward. The following exchange rates were used for planning purposes: R/US$13.6, R/A$10.2 and A$/US$0.75. Corporate governance For reporting Mineral Resources and Mineral Reserves, Gold Fields’ over-arching principle is to ensure transparency, materiality and competency in reporting, compliance with public regulatory codes and internal standards, and to inform all stakeholders of relevant material issues regarding the status of the Group’s fundamental asset base. The Group’s December 2017 Mineral Resource and Mineral Reserve estimate is in accordance with the requirements of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (the SAMREC Code, 2016), the South African Code for the Reporting of Mineral Asset Valuation (2016 SAMVAL Code) and Industry Guide 7 for reporting on the United States Securities and Exchange Commission (SEC). The SAMREC Code covers public reporting and information that is prepared for investors or potential investors and their advisers, as well as other interested parties. The Gold Fields Integrated Annual Report 201789 Reporting is also in accordance with section 12 of the JSE Listings Requirements and takes cognisance of other relevant international codes where geographically applicable. The definitions contained in the SAMREC Code are either identical to, or not materially different from, equivalent international codes. The December 2017 declaration aims to report on information that is rated as important for disclosure on Mineral Resources and Mineral Reserves and it reflects a level of detail required for completeness, transparency and materiality in reporting. Gold Fields’ Mineral Resources and Mineral Reserves are reviewed on an ongoing basis by an internal Competent Person team administered by Corporate Technical Services and cyclically, at least every three years, by external and independent experts. The Competent Persons designated in terms of SAMREC, who assume responsibility for the reporting of Mineral Resources and Mineral Reserves, are the respective operation-based geology managers, technical managers and relevant project managers. The relevant Competent Persons are listed in the Supplement to this IAR. Headline numbers At 31 December 2017, Gold Fields’ mines and projects had total attributable gold and copper Mineral Resources of 104Moz ((December 2016: 101Moz) and 4,881 Mlbs (December 2016: 5,813 Mlbs) respectively. Attributable gold and copper Mineral Reserves are 49Moz (December 2016: 48Moz) and 764 Mlbs (December 2016: 454 Mlbs) respectively, net of mined depletion. The charts below depict the group’s comparative 2017 and 2016 managed gold Mineral Resource and Mineral Reserve ounces split by region and growth projects. Mineral Resource change per region Mineral Reserve change per region (0.1) Americas region Australia region (0.3) West Africa region South Africa region 6.3 6.2 0.5 15.5 16.0 (Moz) 15.1 14.8 3.3 0.6 1.3 1.9 0.4 Americas region Australia region (0.1) West Africa region 0.1 South Africa region 5.8 6.2 7.8 7.6 63.0 66.3 37.3 37.4 (Moz) Growth projects2 (Moz) Variance (0.8) 20.6 19.8 (10) 0 10 20 30 40 50 60 70 Dec 2016 Dec 2017 (Moz) Variance (5) 0 5 10 15 20 25 30 35 40 Dec 2016 Dec 2017 1 Salares Norte and Gruyere are included in the Americas and Australia regions respectively 2 With the divestment of the Arctic Platinum Project (APP), the Growth projects’ Mineral Resource now reflects the Far Southeast project only Loading and hauling ore at Tarkwa The Gold Fields Integrated Annual Report 2017Portfolio managementMINERAL RESOURCES AND RESERVES STATEMENT 90 Mineral Resource headline numbers1 Managed Mineral Resources Attributable ounces Gold only Total regions2 Total projects3 Total operating mines and projects Copper and silver as gold equiv. (Moz) Cerro Corona Cu as Au Equiv.5 FSE Cu as Au Equiv.6 Salares Norte Ag as Au Equiv.7 Grand total as gold equivalents Operational summary1 Gold Australia region Agnew Darlot Granny Smith St Ives Gruyere Total Australia region South Africa region South Deep Total South Africa region Americas region Cerro Corona – Peru Salares Norte – Chile Total Americas region Ghanaian region Damang Tarkwa – Open Pits Tarkwa – Stockpiles Tarkwa – Total Total West Africa region Gold only GFI operations – total gold Americas region Copper Cerro Corona (Cu) only Americas region Silver Salares Norte (Ag) only December 2017 Grade (g/t) 3.18 0.69 Tonnes (Mt) 1,010.8 891.7 Au (Moz) 103.3 19.8 December 2016 Grade (g/t) 3.25 0.58 Tonnes (Mt) 955.4 1,100.2 Au (Moz) 99.8 20.6 Dec 2017 Dec 2016 Gold (Moz) 95.8 7.9 92.8 8.7 1,902.5 2.01 123.1 2,055.6 1.82 120.4 103.7 101.5 Individual metals detailed in table below 2.1 22.7 0.7 148.6 1.9 22.7 0.6 2.1 9.1 0.7 1.9 9.1 0.6 145.5 115.6 113.1 Managed Mineral Resources Attributable ounces December 2017 Grade (g/t) Tonnes (Mt) Gold (koz) December 2016 Grade (g/t) Tonnes (Mt) Gold (koz) Dec 2017 Dec 2016 Mineral Resource (koz) 11.5 — 38.6 34.4 75.4 160.0 381.6 381.6 115.0 23.3 138.3 86.2 172.5 72.2 244.7 331.0 5.25 — 5.70 3.47 1.29 3.11 5.41 5.41 0.69 4.89 1.40 2.21 1.37 0.46 1.10 1.39 1,946 — 7,075 3,847 3,134 16,002 66,318 66,318 2,542 3,663 6,205 6,119 7,583 1,074 8,657 14,776 12.5 1.2 35.2 30.1 76.8 155.9 340.0 340.0 97.6 25.6 123.2 84.7 183.2 68.4 251.6 336.4 5.31 5.97 5.76 3.40 1.34 3.09 5.76 5.76 0.79 4.60 1.58 2.19 1.38 0.44 1.12 1.39 2,142 224 6,520 3,297 3,307 15,490 62,971 62,971 2,468 3,794 6,262 5,978 8,116 978 9,094 15,071 1,010.8 3.18 103,301 955.4 3.25 99,795 1,946 — 7,075 3,847 3,134 16,002 60,350 60,350 2,530 3,663 6,193 5,507 6,825 967 7,792 13,299 — 95,843 2,142 224 6,520 3,297 3,307 15,490 57,483 57,483 2,456 3,794 6,250 5,380 7,304 880 8,184 13,564 — 92,788 Managed Mineral Resources Attributable ounces December 2017 Grade (% Cu) 0.39 Copper (Mlbs) 917 Tonnes (Mt) 107.9 December 2016 Grade (% Cu) 0.41 Copper (Mlbs) 815 Tonnes (Mt) 90.5 Dec 2017 Dec 2016 Attributable Copper (Mlbs) 913 811 Tonnes (Mt) 23.3 Grade (g/t) 66.03 Silver (koz) 49,458 Tonnes (Mt) 25.6 Grade (g/t) 53.11 Silver (koz) 43,761 Attributable Silver (koz) 49,458 43,761 The Gold Fields Integrated Annual Report 201791 Mineral Reserve headline numbers1 Gold only Total operating mines and projects2 Copper and silver as gold equiv. Cerro Corona Cu as Au equiv.8 Grand total as gold equivalents Operational summary1 Gold Australia region Agnew Darlot Granny Smith St Ives Gruyere Total Australia region South Africa region South Deep4 Total South Africa region Americas region Cerro Corona Total Americas region Ghanaian region Damang Tarkwa – Open Pits Tarkwa – Stockpiles Tarkwa – Total Total West Africa region GFI operations – total gold Managed Mineral Reserves Attributable ounces December 2017 Grade (g/t) Tonnes (Mt) Au (Moz) December 2016 Grade (g/t) Tonnes (Mt) Au (Moz) Dec 2017 Dec 2016 Gold (Moz) 613.1 2.70 53.1 572.2 2.83 52.1 49.0 48.1 Individual metals detailed in table below 1.8 54.9 1.1 53.2 1.8 50.8 1.1 49.2 Managed Mineral Reserves Attributable ounces December 2017 Grade (g/t) Tonnes (Mt) Gold (koz) December 2016 Grade (g/t) Tonnes (Mt) Gold (koz) 3.0 — 12.4 19.4 48.7 83.6 216.8 216.8 86.2 86.2 31.9 122.5 72.2 194.7 226.6 613.1 5.54 — 5.51 2.51 1.20 2.30 5.36 5.36 0.70 0.70 1.68 1.23 0.46 0.94 1.05 2.70 541 — 2,203 1,568 1,871 6,183 37,388 37,388 1,937 1,937 1,728 4,831 1,074 5,906 7,634 53,143 3.0 0.5 9.9 21.5 45.8 80.7 217.6 217.6 46.1 46.1 31.8 127.7 68.4 196.1 227.9 572.2 5.39 3.84 5.30 2.52 1.20 2.22 5.34 5.34 0.88 0.88 1.64 1.24 0.44 0.96 1.06 2.83 515 56 1,693 1,740 1,760 5,764 37,324 37,324 1,302 1,302 1,674 5,104 978 6,082 7,755 52,146 Dec 2017 Dec 2016 Mineral Reserve (koz) 541 — 2,203 1,568 1,871 6,183 515 56 1,693 1,740 1,760 5,764 34,023 34,023 34,072 34,072 1,928 1,928 1,555 4,348 967 5,315 6,871 49,005 1,296 1,296 1,506 4,593 880 5,474 6,980 48,112 Managed Mineral Reserves Attributable ounces December 2017 Grade (% Cu) 0.4 December 2016 Grade (% Cu) 0.45 Copper (Peru) – Cerro Corona (Mlbs) Copper Copper (Cu) only 454 767 1 Managed unless otherwise stated, Gruyere only reports the 50% share attributable to Gold Fields (GFI). Measured and Indicated Mineral Copper (Mlbs) 456 Tonnes (Mt) 86.2 Tonnes (Mt) 46.1 764 Resources are reported inclusive of those Mineral Resources modified to produce Mineral Reserves 2 Gruyere and Salares Norte included in the Australia and Americas regions respectively 3 Projects – FSE plus APP (APP for 2017 only) 4 Reserve grade is inclusive of in section development tonnes, which cannot be separated from the ore flow, however capital waste is excluded as there is a potential to separate it in future 5 Metal prices used for equiv oz: US$1,400/oz Au and US$3.2/lb Cu. The metallurgical recovery rate (Au = 69% and Cu = 87%), has not been applied to the conversion. Calculation: CuMlbs*Cu Price (917*3.2)/ Au price (1,400) = 2.095 Au equivalent Moz 6 Metal prices used for equiv oz: US$1,400/oz Au and US$3.2/lb Cu. The metallurgical recovery rate (Au = 81.6% and Cu = 92.6%), has Dec 2017 Dec 2016 Attributable Copper (Mlbs) not been applied to the conversion been applied to the conversion 7 Metal prices used for equiv oz: US$1,400/oz Au and US$20/oz Ag. The metallurgical recovery rate (Au = 92% and Ag = 70%), has not 8 Metal prices used for equiv oz: US$1,200/oz Au and US$2.8/lb Cu. The metallurgical recovery rate (Au = 69% and Cu = 87%), has not been applied to the conversion. Calculation: CuMlbs*Cu Price (767*2.8)/ Au price (1,200) = 1.790 Au equivalent Moz The Gold Fields Integrated Annual Report 2017Portfolio managementPupils at one of our sponsored schools in Damang Good Health and Wellbeing Quality Education Clean Water and Sanitation Affordable and Clean Energy Decent Work and Economic Growth Industry, Innovation and Infrastructure Sustainable Cities and Communities Responsible Consumption and Production Climate Action Life on Land Partnerships for the Goals Key measurements – Licence and reputation 2017 Status 2016 2015 2014 2013 Total value distribution (US$m) SED spending (US$m) Workforce from host communities (%) In-country procurement (US$m) Host community procurement (US$m) Environmental incidents (Level 3 and above) Water recycled/reused (Mℓ) Water withdrawal (Mℓ)1 Electricity purchased (MWh)1 Diesel (TJ)1 CO2 emissions (‘000 tonnes)2, 3 Mining waste (‘000 tonnes) Gross closure costs provisions (US$m) 2,850 17.4 40 1,626 774 2 43,289 32,985 6,765 1,959 212,089 381 2,505 16.2 484 1,360 558 3 44,274 1,964 2,425 13.7 59 1,270 514 5 2,650 17.4 57 1,440 600 4 2,980 17.2 – 1,440 430 3 43,120 35,247 42,409 30,207 33,453 30,302 1,322,353 1,338,075 1,382,106 6,930 1,753 6,066 1,694 5,509 1,731 187,036 167,357 138,522 190,007 381 353 391 355 30,321 1,366,086 1,400,422 6,608 1 The numbers disclosed only include our operations, as head offices are not considered material 2 The CO2 emission numbers include head offices and comprise Scope 1, 2 and 3 emissions 3 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 4 2016 reduction due to classifying host community based on place of origin and not residence. 2015 and 2014 figures restated accordingly 2017 performance improvement on 2016 or achievement in line with strategy 2017 performance drop against 2016 2017 performance on par with 2016 Total value distribution US$2,850m Overview Environmental stewardship Stakeholder relations Summarised corporate governance Summarised remuneration report p94 p95 p105 p124 p130 Licence and reputation The success of our business is critically dependent on our relationships with a number of key external stakeholders that determine both our regulatory and social licences to operate as well as the reputation we have with these stakeholders. These relationships are built on a commitment to good corporate citizenship, sharing wealth with our stakeholders and sound environmental stewardship. As such, protecting our reputation and our licence to operate remains a priority on our scorecard Results and impact Strategic responses – how we will achieve this Key initiatives Related risks • Enhance reputation through community, environmental and safety programmes that enhance the lives of our people • Enhance governance and compliance • Build confidence with analysts and investors • Enhance reputation with stakeholders through Shared Value initiatives • Improve total shareholder return by positioning share price between median and upper quartile of peer group • Increase the proportion of sustainable host community procurement and employment to drive Shared Value • No Level 3 or above environmental incidents and a 10% reduction in Level 2 incidents • Align management practices with ICMM tailings and water position statements • Deliver and manage a robust and transparent group governance and compliance programme • Maintain position in top five in Dow Jones Sustainability Index • Loss of social licence to operate and community acceptance • Water pollution, supply and cost • Safety and health of our employees • Attraction and retention of skills • Cost of energy and security of power supply • Impacts of global climate change • Wage agreement in South Africa and Ghana We continued to enhance our social licence to operate through ESG focused initiatives Key stakeholders Communities Shareholders Governments and regulators OVERVIEW For Gold Fields, leadership in sustainable gold mining means being the company of choice for all our stakeholders – employees, communities, government and investors. Sustainability in this context means building mines across the world, operating them responsibly and profitably over life-of-mine and creating Shared Value for all our stakeholders. To protect and enhance these relationships and our reputation we understand that we must minimise the impact of our operations through environmental stewardship, while ensuring we have meaningful and ongoing engagement and relationships with our stakeholders to create Shared Value opportunities and deliver clear economic, social and environmental benefits to them. Our ability to fulfil our commitment to stakeholders, also requires that we run our operations sustainably and profitably. Above all, we require the highest levels of corporate governance and compliance. This 94 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. This section deals with the licence and reputation pillar of our balanced scorecard and is divided into three parts, environmental stewardship, stakeholder relationships and engagement and governance and compliance, reflecting our new operating structure. Our operations have a significant impact on both the environment and our stakeholders, particularly on those communities living in close proximity to our mines or projects. How we maximise our positive impact and mitigate adverse impacts is critical to protecting and enhancing our reputation, achieving societal acceptance as well as maintaining our ability to receive or renew our regulatory licences. Regulatory licences are issued by governments at all levels, national, regional and local, and require first and foremost good corporate citizenship from Gold Fields in terms of adherence to all relevant legislation, including the payment of taxes and other levies, as well as a robust governance and compliance approach. Societal acceptance is mostly achieved by building strong relationships with our stakeholders. This is not merely a compliance- based approach, but one that seeks to ensure that we secure the long-term support of our stakeholders. During 2017, Gold Fields’ total value distribution to our stakeholders was US$2.85bn (2016: US$2.51bn), in the form of payments to governments, capital providers, communities, business suppliers and employees. The vast majority of the value created remains in the countries of operation. The five key elements of our sustainable development strategy are: Our objectives Priorities Energy and climate change Ò • Stabilise energy costs at current levels • Drive renewables and a lower carbon energy mix • Start managing climate change adaptation risks Social acceptance Ò • Build strong community and government relationships • Drive impact through Shared Value • Enhance stakeholder engagement and communications Water stewardship Ò • Set and achieve water withdrawal and recycling/reuse • Achieve water security through catchment approach targets More info p61 – 65, p96 – 98 p105 – 123 p99 – 102 Integrated mine closure Ò • Business-wide integrated approach • Liabilities optimised through progressive closure and rehabilitation • Address social transition at closure p104 Integrated approach Ò • Achieve collaboration across disciplines • Regional leadership • Integrated planning p94 – 123 The Gold Fields Integrated Annual Report 201795 ENVIRONMENTAL STEWARDSHIP Introduction As a mining business, our operations have a material impact on the surrounding environment. To manage this, we remain committed to responsible environmental stewardship. Internally, Gold Fields has recently revised a number of policy statements and four Group- level guidelines, which reflect our environmental priorities. These concern energy and carbon management, water management, tailings management and mine closure. To understand the Group’s approach to managing the following issues, as well as the supporting policies and guidelines, refer to the Gold Fields website at www.goldfields.com/ sustainability.php • Environmental stewardship • Water • Climate change • Energy • Mine closure • Health and safety Our approach to environmental stewardship is guided and informed by several external standards as well as local legislation, supported by risk management, internal policies and priorities. Additional local priorities are identified through stakeholder consultation. All of Gold Fields’ eligible operations are certified to the International Cyanide Management Code (ICMC). The certification, which prescribes how to manage, treat, transport and store cyanide, is renewable every three years. Gold Fields remains committed to Code compliance and our operations work to ensure recertification by identifying and addressing potential gaps in advance. Granny Smith and St Ives were successfully recertified during 2017. The next recertification audits due in the Group are at South Deep, Tarkwa and Damang in 2018. Gold Fields does not use mercury for the beneficiation of gold or in any of its processes. While all Gold Fields’ operations are currently certified under ISO 14001, we are in the process of recertifying our operations in terms of the new ISO 14001 (2015) standard. A significant highlight for the Group is that St Ives, Granny Smith, Cerro Corona and South Deep secured the new certification in 2017. Agnew, Tarkwa and Damang are scheduled for recertification in 2018. The adoption of the critical control management approach promoted by the ICMM (p50), will also assist with the identification and mitigation of adverse environmental impacts. For details of our environmental management approach, policies and guidelines go to www.goldfields.com/ sustainability.php Environmental incidents Gold Fields reports environmental incidents using a Level 1 (most minor) to 5 (most severe) scale. During the year, our environmental incident reporting process was updated to include clear deadlines for reporting incidents to our CEO and Board to ensure oversight at the highest levels. We have not recorded any Level 4 or 5 environmental incidents in the past ten years, thereby achieving our target of zero Level 4 and 5 incidents. During 2017, we did, however, experience 83 Level 2 environmental incidents (2016: 131) and two Level 3 environmental incidents (2016: three), which took place at our St Ives and Tarkwa operations. • In Q2, a contractor at the St Ives mine released diluted, hypersaline ground water onto undisturbed land during drilling activities. Sumps had not been prepared to contain any run-off water. The area was immediately rehabilitated and the regulator notified. The environmental impact was low as the water released was a small quantity and had low salinity levels • In Q4, seepage from a tailings embankment wall at Tarkwa flowed into an adjacent control wetland on the mine’s property. Levels of cyanide in the seepage resulted in fish in the wetland dying. Cyanide levels in the wetland quickly fell below prescribed regulatory limits and the seep from the embankment wall was contained. The contaminated water did not go beyond Tarkwa’s boundary or into any water courses. The regulator was notified Supporting biodiversity Our Biodiversity Conservation Practice Guide ensures that we integrate biodiversity conservation into all aspects of mine life, from pre-feasibility to closure. We subscribe to the ICMM Position Statement on Mining and Protected Areas, which includes a commitment to respect protected areas and an undertaking not to explore or mine on World Heritage properties. For example, we implement a total ban on hunting on our land holdings at our mines in Ghana and Peru and have strict controls to protect local water bodies. Because of this, our operations enjoy high levels of biodiversity compared to their surrounds. At our Salares Norte project in the Atacama desert of northern Chile, we have invested US$2.2m in our environmental programmes, which includes a project to protect the endangered Short-tailed Chinchilla, which is found in the area. During 2017, with the help of environmental experts, we captured a number of Chinchilla and relocated them. Some of them were equipped with GPS collars to allow for further studies. At our Cerro Corona mine in Peru we have a biodiversity management programme, as part of which we evaluate terrestrial and aquatic biodiversity twice a year (during the dry and wet season) and, where necessary, ask biologists to relocate sensitive flora and fauna species from the operating area. As part of our Beyond 2018 project at the St Ives mine, we delayed submission of final documentation to the Environmental Protection Authority (EPA) to further study the fauna on the Lake Lefroy salt lake, on which much of the future mining activity will take place. The documentation was submitted in February 2018. The Gold Fields Integrated Annual Report 2017Licence and reputationENVIRONMENTAL STEWARDSHIP continued 96 Climate change management Climate change affects the availability of natural resources, with water and energy most affected. Our operations and our host communities are and could be further impacted, due to: • Extreme weather events such as severe rainfalls, heavy snowfalls, severe winds, extreme temperatures and prolonged droughts • An increasing number of climate- related regulations, carbon emissions taxes, stringent water regulations, the impact of new technologies and investor perception During 2017, the Board adopted an updated Group Climate Change Policy, which advances and communicates a balanced mitigation and adaptation approach to achieving our climate change objectives. The policy contains a set of commitments that include: • Conducting climate change vulnerability assessments utilising Group risk guidelines and International Council on Mining and Metals (ICMM) tools and guidelines • Annual reporting and disclosure via a number of reporting frameworks including the Carbon Disclosure Project (CDP) and the Dow Jones Sustainability Index • Mitigating the effects of climate change by increasingly investing in renewable energy and low-carbon energy sources, energy efficiency initiatives and water use optimisation initiatives • Supporting research, development and innovation to assist our operations to cope with climate change • Factoring in a regional carbon price for both costing and as a potential revenue stream • Participating in industry forums, including the ICMM climate change and energy working group, stakeholder and NGO engagements For details of our climate change management approach, policies and guidelines go to www.goldfields.com/ sustainability.php For related energy reporting and a combined energy, climate change infographic, see p64 – 68 In 2017, the Taskforce on Climate Financial Disclosures (TCFD), formed by the global Financial Stability Board, published its climate change-linked disclosure recommendations for corporations. Given our long running energy, water security, carbon emissions management and climate change programmes and performance disclosures, we are able to align these with the TCFD recommendations as follows: Governance The Board approved the Climate Change policy statement in 2017 and the Safety Health and Sustainable Development Committee of the Board reviews performance of energy and climate change programmes every quarter. Strategy Our climate resilience strategy focuses on understanding climate- related risks that affect our operations and neighbouring communities and building safeguards to strengthen climate resilience against these risks. We also assess climate-related opportunities, such as: the use of financial incentives, investing in improving security and efficiency for water and energy, remaining committed to using 20% renewable energy in all new operations and switching from high to low-carbon energy sources. 1 Determined using the RCP 8.5 baseline scenario (representative concentration pathway). Gold Fields has noted the nationally determined commitments from Australia, Peru, Chile and South Africa. We further expect the two-degree scenario to put pressure on energy costs in the medium term. Risk management and mitigation Company-wide risk assessments are conducted and reviewed twice a year by the Audit and Risk Committee of the Board. In 2017, our Group risk register included the impact of global climate change and water pollution, supply and cost among the top 20 Group risks. Gold Fields’ approach We assess climate change-related risks, develop mitigation and adaptation plans, implement the plans and review our vulnerability every five years. Apart from operation-specific interventions (p62 – 63) we have also developed Group-wide strategies and programmes. In 2016 and 2017, Gold Fields’ Ghana mines piloted use of an ICMM climate-data viewer tool, which gives insight into physical changes in precipitation, temperature, wind and water stress levels. The tool provides climate projections covering a 20-year period from 2025 to 2045, from a 1986 to 2005 baseline1. The outcomes were used in developing adaptation plans, such as reviewing design flood lines, inclusion of climate change risks in our tailings and waste facilities management guidelines and inclusion of climate change impacts in our project standards (p98). Regulatory risks and opportunities Climate change-related regulations have increased across our regions. In Ghana, the Renewable Energy Act of 2011 requires 10% renewable energy requirement across the grid by 2020, with mines expected to take the lead. Our mines have started exploring ways to achieve this target. In South Africa, the second carbon tax bill with taxes levied on companies’ Scope 1 CO2 emissions, is set for implementation in early 2019. South Deep’s exposure to the tax is minimal as its Scope 1 emissions, largely related to diesel usage, were only 8,000 tonnes The Gold Fields Integrated Annual Report 2017 97 CO2-eq. At an estimated tax rate of R60/t this would amount to around R500,000 (US$37,000), after discounts. However, should Eskom decide to pass on the cost of the tax on its Scope 1 emissions to customers, the costs could rise significantly. New national greenhouse gas emissions regulations were also promulgated in 2017. We are currently studying their potential impact. In Australia, we already report under the National Greenhouse and Energy Reporting scheme. In 2016 a safeguard mechanism was introduced, with penalties for exceeding emissions baselines; in the year to 30 June 2017 our St Ives mine has exceeded the baseline by 1,590 tonnes CO2-eq as increased mining volumes drove up our diesel-linked emissions. This was 1.6% above the baseline and required the mine to trade carbon credits to that amount. We have successfully converted our abated carbon emissions at our Granny Smith mine in Australia into A$127,000 in carbon credits and auctioned these off to the Australian government, with the excess used to offset the safeguard mechanisms exceedances at St Ives. Chile’s carbon tax scheme, at US$5/t CO2-eq, became effective in 2017, targeting large grid connected generation facilities. Our Salares Norte project in the Atacama Desert is a remote operation, with no grid access and will not be affected. Weather-related physical risks Severe weather events have impacted and have the potential to further impact our operations. Heavy rains in Australia and Ghana have resulted in production stoppages and damage to properties. In 2017, Peru experienced heavy rainfalls which affected the road from the Cerro Corona mine to the port of Salaverry, from where we ship our ore concentrate. As a result there were some delays in shipping the concentrate. Last year also saw heavy snowfalls at the Salares Norte project in Chile, which impacted our exploration activities. South Africa has been experiencing drought conditions in some areas. Metrics and target Gold Fields has been disclosing emissions, risks and opportunities for more than 10 years through the CDP, which has consistently ranked us as one of South Africa’s top performers. Our key energy and carbon emissions data are assured externally. In 2018 we will complete the process of revising our short and medium-term climate change and emissions targets, aligned with our corporate strategy and the regulatory requirements in our jurisdictions. Gold Fields disclosures cover all three carbon emission scopes (Scope 1 – 3), both in absolute figures and intensities. Total Scope 1 – 3 CO2-eq emissions during 2017 amounted to 1.96Mt (2016: 1.96Mt). From 2017 to 2020, our aspirational target is to reduce cumulative carbon emissions by 800kt CO2-eq. Given the water security impact of climate change to our operations, we also closely monitor our water usage and spending and invest in water security and efficiency initiatives. More details can be found on p99. Rehabilitation of waste dumps at Damang The Gold Fields Integrated Annual Report 2017Licence and reputation ENVIRONMENTAL STEWARDSHIP continued 98 Regional climate change risks and mitigation plans High/medium risks Plan Australia Americas West Africa South Africa Adequacy of flood management measures • Review flood management capabilities and adjust management plans, if necessary Declining availability of water • Develop LoM water balances that are dynamic, probabilistic and predictive Increased cooling costs • Implement energy and cost management plans Legislative changes including aggressive taxation regimes and abatement requirements • Participate in carbon abatement projects • Continue to engage governments Water shortages during drier months Ability to deliver concentrate for shipping during severe weather events Increased operational costs linked to maintenance of roads, more frequent replacement of tyres and increased dewatering Increased volumes of contaminated water requiring treatment Heat stresses on mine employees • Obtain permits to abstract water from the Tingo river in wet seasons • Seek approval for water abstraction in regular EIA updates • Ensure that an alternate route to the port is ready for use • Increase storage capacity at the port and at the mine • Provision made for rain delays in 2018 operational plan • Pit floors to be staggered where possible to aid drainage • Catchment mapping to be reviewed against a one in 100-year rainfall event • Review water treatment option updates for contaminated water • Direct surface water flow away from operations to reduce contaminated volumes • Adaptive water balance models • Heat stress management programme, including training, to be rolled out in 2018 • Accelerate heavy machinery automation opportunities across the fleet Favourable conditions for vector borne diseases during high rainfall periods • Review mosquito spraying programme and adjust, if necessary • Investigate potential collaboration with neighbouring mines on community spraying • Adaptation programme completed in 2018 • Dynamic, probabilistic and predictive water balances in place • Reduce freshwater withdrawals • Reduce potential Scope 1 emission through improved diesel efficiencies Variability in rainfall intensity increasing costs of alternate water sources Temperature increases affect surface cooling plant efficiency and causes heat stress for surface employee Climate change-related regulatory uncertainty The Gold Fields Integrated Annual Report 201799 Water withdrawal¹ across the Group increased to 32.9Mℓ (2016: 30,3Mℓ) and water recycled² or reused³ amounted to 43.3Mℓ (2016: 44,3Mℓ). Water withdrawal per ounce was higher at 14.8kℓ/oz in 2017 compared with 13.7kℓ/oz in 2016. The main reasons for the increase in water withdrawal (Graph 1) were the high rainfalls experienced at our Australian operations, at Tarkwa in Ghana and at the Cerro Corona mine in Peru. This is included in the determination of water withdrawal and we are required to dewater these mines to enable them to continue operating. As Group gold production was largely unchanged this reflected in higher water withdrawals per ounce of gold produced. Our operations are investing heavily in improving water management practices, including pollution prevention, recycling and conservation initiatives. The decline in the amount of water recycled or reused during 2017 also related to higher rainfall. At Cerro Corona all new water is rain water, which is collected and stored in the tailings pond even if the site does not need it. It gets used first, therefore reducing the need to treat and reuse waste water. A similar trend occurs at our other mines during periods of high rainfall. The ICMM has recommended a recycling/reuse target of 60% for mining operations. Our Peruvian and Ghanaian mines have exceeded this level already and during 2018 the Group will set targets in line with this recommendation. At Group level, 57%4 of our water was recycled or reused during 2017 (2016: 59%). We benchmark our water usage by participating in the CDP water disclosure programme. The CDP’s water score is an indicator of a company’s commitment to transparency around its water risks, and the sufficiency of its response to them. During 2017, Gold Fields maintained an A- score for its 2016 CDP water assessment, a notch below the top performers. Water management Gold Fields is committed to responsible water stewardship, both for the benefit of host communities and for our own operations. Clean water is a basic human right, and a vital resource for our processing activities. Our approach to managing our impact on and access to water is essential to maintaining our licence to operate. Through careful management, we are able to reduce our environmental impact through responsible use, storage and release of water, while also reducing our costs, thereby benefiting all stakeholders. All regions have conducted a gap analysis against the new ICMM Water Position Statement and have developed action plans to close the gaps, with the aim of aligning by the end of 2018. Independent verification of mines’ adherence to the statement will be carried out afterwards. We have updated the Group Water Management Guideline by incorporating the following ICMM Water Position Statement commitments: • Apply strong and transparent corporate water governance • Manage water at operations effectively • Collaborate to achieve responsible and sustainable water use Predictive and dynamic water balances are in place at all operations, except Damang (which is planning to implement it during 2018), enabling them to account for their water inputs to and outputs for the flows within the system. For details of our water management approach, policies and guidelines go to www.goldfields.com/ sustainability.php Group performance During 2017, Gold Fields spent a total of US$29m on water management and projects (2016: US$16m). Group water withdrawal (Mℓ) 7 4 2 , 5 3 5 8 9 , 2 3 7 0 2 , 0 3 1 2 3 , 0 3 36,000 35,000 34,000 33,000 32,000 31,000 30,000 29,000 28,000 27,000 2015 2016 2014 2017 Water withdawal per ounce of gold produced (Kℓ) 16.0 8 . 5 1 8 . 4 1 7 . 3 1 15.0 14.0 13.0 12.0 2 . 3 1 11.0 2014 2015 Group water recycled/reused (Mℓ) 2017 2016 4 7 2 , 4 4 9 8 2 , 3 4 0 2 1 , 3 4 9 0 4 , 2 4 45,000 40,000 43,500 43,000 42,500 42,000 41,500 41,000 2017 2015 Total water recycled/reused4 2014 2016 9 5 7 5 8 5 5 5 (%) 60 58 56 54 52 50 2014 2017 1 Water withdrawn is the sum of all water drawn into Gold Fields’ operations from all sources for any use/impact 2015 2016 2 Recycled water – refers to the act of processing used water/waste water through the same or another cycle at the same facility. The water/ waste water is treated before being recycled and reused 3 Reused water refers to water/waste water that is re-used without treatment at the same facility or at another of Gold Fields’ operations 4 Percentage of water recycled or reused water recycled/reused total water used in process5 x 100 = 5 Total water used in process = water withdrawal + water recycled/reused The Gold Fields Integrated Annual Report 2017Licence and reputationENVIRONMENTAL STEWARDSHIP continued 100 Regional performance Key risks Strategic responses Americas • Poorly developed public water infrastructure • Ongoing or perceived water quality pollution by neighbouring mines • Water-related activism at both a local and regional level Cerro Corona has a water management strategy that includes: • Permits for water use and effluent discharge • Water balance to control the volume of run-off water stored in the TSF • Rainwater storage and recycling • Community water supplies • Water monitoring • Proactive engagements with community organisations and local governments • Develop post-closure water management plans 2017 key developments Cerro Corona has committed to providing local communities with additional, potable water during the dry season and continues to implement projects focused on water provision to nearby communities as well as improving existing municipal water systems. During the year the supply of potable water to the residents of Hualgayoc was augmented through water tank trucks and access to a drinking water well located at the mine site. In the basins of the Tingo and Hualgayoc rivers, which flow through the Cerro Corona mine site, the regulator leads the participatory monitoring process which includes community members. During the year, the Peruvian Local Water Authority carried out inspections at the mine to verify that the volume of groundwater pumped is in accordance with Cerro Corona’s water licence. No findings were reported. The authority also granted permission to develop water infrastructure at the Mesa de Plata creek, which is needed for expanding the open pit. In Peru we invest in water supply projects in our host communities The Gold Fields Integrated Annual Report 2017101 Key risks Strategic responses The aridity of Western Australia is a risk to water security of our mines and the Gruyere project Australia All our mines in Australia have water management strategies that include appropriate water balances, linked to operating strategies, and post-closure water management plans that have been incorporated into our environmental management systems with protocols governing: • Water monitoring and reporting • Storm water management • Recycling of water • Groundwater management • Surface water management • Water storage inclusive of freeboard requirements • Associated legislative requirements Water management at the sites forms an integral consideration within our mine closure plans that are reviewed on a three-year cycle and submitted to the regulator for approval. A stakeholder engagement strategy has been implemented for the region which includes water management activities. 2017 key developments In November 2016 Granny Smith entered a five-year agreement with the Mt Weld Mining Company for access to the nearby Mt Weld borefield, which will ensure continued supply for the current LoM. St Ives has two water agreements in place: a supply agreement with the Water Corporation, which terminates in 2050 and supplies the majority of the water needed by the mine. The other agreement (for supplementary water) is with the neighbouring Nickel West mine, which provides for declining entitlements through to 2021. Our Agnew mine currently receives water for its operations from a number of sources, including water from a range of pits that are filled with rainwater. A hydrological study on the Fairyland borefield suggests that the facility can be expanded to supplement the existing water supply at the mine. At the Gruyere project two borefields will supply the mine and the Gruyere village. The Yeo borefield will serve as the main water source for the Gruyere processing plant. To date, 32 boreholes have been drilled and installation of a 95km water pipeline to the processing plant has commenced. The Gold Fields Integrated Annual Report 2017Licence and reputationENVIRONMENTAL STEWARDSHIP continued 102 West Africa Key risks Strategic responses • Intense periods of precipitation during south-western Ghana’s two rainy seasons requires active management of positive water balances at the mines • Water pollution affecting adjacent communities • Tarkwa mine’s significant footprint is a large watershed to manage • The impact of illegal mining on water bodies is often blamed on large-scale mining • Permitting delays The West Africa operations have well-developed water management strategies that include: • Water storage and reuse • Water volume and quality monitoring • Controlled water releases to external receptors • New water balance software introduced in 2017 • New water treatment facilities being designed and trialled • Engagement with regulators and communities 2017 key developments The reverse osmosis (RO) plant at Tarkwa’s northern heap leach pad operated during 2017. The resulting brine is stored in dedicated lined ponds. Trial irrigation of rubber trees on the heap leach pad with the brine to promote ion reduction via plant uptake was unsuccessful. The RO plant will be upgraded with the aim of reducing brine generation. Rinsate (water with low concentration of contaminants) from the South Heap Leach pads meets the Environmental Protection Agency’s (EPA) effluent discharge standards with the water now able to be diverted away from treatment facilities. The EPA has reviewed the decommissioning plans and technical studies for both facilities and approved the end use and closure plan. During 2017, Damang trialled a denitrification plant to clean the pit water that contains nitrates in excess of discharge limits. The denitrification process uses an anoxic reactor to break down the nitrates. Bacteria convert the nitrate to nitrogen gas, which should result in a product suitable for discharge. If successful in 2018, the pilot study will be advanced towards site implementation. Key risks Strategic responses South Africa • Growing concerns around water scarcity in South Africa • Increasing levels of acid drainage (AD) in groundwater plume from tailings dam To ensure its water security, South Deep uses a number of water sources, including recycling and conservation initiatives, RO plants, boreholes and access to the public water system. In times of severe droughts, as in 2016, it also accesses water supplied from neighbouring mines. To mitigate against water pollution, including AD, South Deep undertakes ongoing water monitoring, containment in storage facilities, water treatment and purification. It has also constructed plume interception wells at its TSF. 2017 key developments South Deep’s Water Use Licence Application, which was submitted in 2015, has yet to be approved by the regulator. South Deep and Sibanye-Stillwater have jointly undertaken work to study the impact of historical mining pollution in the Leeuspruit stream, which starts at Sibanye-Stillwater’s Cooke 4 mine – adjacent to South Deep – and flows through the South Deep lease area. The findings of the study were presented to the Department of Water and Sanitation in December 2017. In 2016, Sibanye-Stillwater announced the partial closure of its Cooke 4 mine and submitted a final assessment report to the regulator in October 2017. South Deep is an interested and affected party in the process, as there may be a number of potentially adverse impacts on the mine, should pumping of mine water cease at Cooke 4 if Sibanye-Stillwater were to get the required approvals. South Deep, which is opposed to the cessation of pumping, is continuing to engage with Sibanye-Stillwater and other stakeholders to find an appropriate and effective solution and has appointed consulting engineers to develop alternative water treatment options. Seepage plumes have been identified at two of South Deep’s TSFs, the old TSF and the Doornpoort TSF. To contain and reduce these plumes, a trial blast curtain was installed in 2016. The trial was successful and during 2017 five boreholes were installed to intercept the plume at Doornpoort TSF. Monitoring is ongoing. The Gold Fields Integrated Annual Report 2017Waste and tailings The most significant waste materials produced by our operations are tailings, waste rock, chemical waste and hydrocarbon waste. By carefully managing these wastes, we minimise the environmental and potential social impact. All of our operations have tailings management plans in place, including closure and post-closure management plans. In total, our operations have 27 tailings storage facilities (TSFs), of which 16 are active. All TSFs, as well as associated pipeline and pumping infrastructure, are subject to a Group audit every three years – or more frequently where required by local circumstances or regulations – as well as regular inspection and formal annual reporting. In December 2016, the ICMM published its Tailings Position Statement following high-profile tailings failures in preceding years. Our Group guidelines were updated in 2017 to be fully compliant with the ICMM’s framework. Group-wide tailings audits were completed by independent, external experts during 2017 to ensure Gold Fields meets the ICMM’s new framework as well as having critical controls in place to manage potential risks. There were no significant findings. All gaps identified will be closed out by the end of 2018, in accordance with our commitments as an ICMM member. For details of our waste and tailings management approach, policies and guidelines go to www.goldfields.com/ sustainability.php 103 Group mining waste (Million tonnes) 2017 2016 2015 2014 41 39 37 38 171 148 130 100 0 20 40 60 80 100 120 140 160 180 Waste rock Tailings Total Group waste rock volumes mined increased to 171Mt in 2017 from 148Mt in 2016, largely as a result of the 40Mt of waste rock moved as part of the Damang Pit Cutback Project in 2017. There was a 5% increase in tailings depositions from to 41Mt in 2017 from 39Mt in 2016. Gold Fields has set a target to maintain the general landfill waste mass (non-hazardous waste other than tailings and waste rock) at 2015 levels of 11.2Mt, by ensuring a reduction in the waste that reaches landfill through greater use of on-site waste separation and recycling. During 2017 the Group reduced landfill waste by 5% to 11Mt. Regional performance Americas region During 2017, the Cerro Corona TSF was raised 4m to 3,780m above sea level. The construction of the dam is approved by the regulator up to level 3800m; this level will be reached by 2021 in line with the mine plan. To achieve the 2017 raise the mine reached agreement previously with the Manuel Vazquez Association (MVA), a community organisation, to relocate the point of catchment of water of the nearby Las Tomas spring from 3,771m to 3,800m above sea level with better water quality and slightly more flow. The engagement with the MVA continues as we raise the TSF to that level. Australia region At Agnew the rehabilitation of the Lawlers TSF and the former Lawlers camp was completed during 2017, under budget and ahead of schedule, resulting in a reduction of the mine closure liability. Also at Agnew, final approvals for the Songvang in-pit TSF were received from the regulator and the facility commissioned in December 2017. This will save the mine around A$10m (US$8m) in TSF construction and closure liabilities over the mine life. West Africa region The Tarkwa mine has raised the embankment walls at its TSF 1 and TSF 3 and deposition of material has begun. During 2017, construction of TSF 5 at Tarkwa continued after approval was received from the Ghana Minerals Commission. As per an Environmental Protection Agency (EPA) request, the mine will be submitting a compensation plan for residents of the nearby Abekoase community At Damang, the Far East Tailings Storage Facility (FETSF) was commissioned in Q1 2018, on time and within budget. The FETSF will provide tailings capacity of 44Mt, which will cover the mine’s new life. The transition of tailings deposition to FETSF and the decommissioning of the East Tailings Storage Facility commenced during Q1 2018. The Gold Fields Integrated Annual Report 2017Licence and reputationENVIRONMENTAL STEWARDSHIP continued 104 Mine closure management Sustainable and integrated mine closure remains one of Gold Fields’ five key sustainability focus areas. Through the careful planning of mine closures, we are able to: • Reduce our environmental impact • Reduce social and community impact • Optimise financial liabilities • Enhance our assets’ values All our mining operations have closure plans in place that are reviewed every year and closure liabilities are updated annually. During 2017, Gold Fields completed the adoption of the Standardised Reclamation Cost Estimator (SRCE) model, which provides consistency in preparation of liability cost estimates across the Group, flexibility in meeting operational and regional needs and ease of use. During the year an Integrated Mine Closure Steering Committee was established to oversee alignment of closure plans with the guideline. Focus areas for the committee include social transitioning, progressive rehabilitation and full life-of-mine closure obligations. Continued participation in the ICMM Mine Closure Working Group and Social Guidance for Closure Taskforce is supporting the Gold Fields focus on social transitioning at closure. We are committed to moving towards integrated mine closure planning. This will ensure that we design, plan and operate our mines with closure in mind. Our 2020 objective is to implement integrated mine closure management that in the long term will reduce the Group’s closure liabilities. This means planning for post-closure long-term sustainability in consultation with our communities and other stakeholders. The funding methods used in each region to make provision for the mine closure cost estimates are: • Ghana – reclamation bonds underwritten by banks along with restricted cash • South Africa – contributions into environmental trust funds and guarantees • Australia – existing cash resources1 • Peru – bank guarantees The total gross mine closure liability for Gold Fields remained unchanged at US$381m in 2017. A breakdown is provided in the table below. Group closure estimates 2017 (US$m) Australia region1 Ghana region Americas region South Africa region Group total (US$m) % of Group 2017 Total (US$) 2017 Total (US$) 2016 47% 26% 16% 11% 100% 179 98 62 42 381 182 105 57 37 381 1 Due to legislative changes introduced 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. Such liabilities for continuing operations are now self-funding. In addition, 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. Capital and interest from the fund will be used to rehabilitate legacy sites or sites that have prematurely closed or been abandoned Conveyor belts feeding the crushing and metallurgical plant at Tarkwa The Gold Fields Integrated Annual Report 2017105 STAKEHOLDER RELATIONS Our licence to operate ultimately depends on the quality of our relationships with our various stakeholders – those individuals and organisations who are interested and affected by our business, or who have a material influence on our ability to create value. Stakeholders are an integral part of our business – representing a wide range of interests that both influence and are impacted by our operations – and we seek to develop relationships with them built on open, transparent and constructive engagement. This engagement allows for participative and informed decision making, by balancing the interests, needs and expectations of our stakeholders with the best interests of Gold Fields. During 2017, Gold Fields reviewed and updated its Stakeholder Relationship and Engagement Policy, which was approved by the Board in February 2018. We generate and share significant value for the societies in which we operate. Our total value distribution, graphically depicted on p12, details the economic value we create at Group level as well as in our countries of operation. During 2017, Gold Fields’ total value distribution to our stakeholders – as measured by the World Gold Council standards – was US$2.85bn, in the form of payments to governments, business partners, its workforce, communities and capital providers. For details of our stakeholder relationship and engagement management approach policies and guidelines go to www.goldfields. com/sustainability. php Summaries of the stakeholder engagements held by corporate and each region in 2017 are available at www.goldfields. com/societal- stakeholders.php Investor relations Central to our vision of being the leader in sustainable gold mining, is the objective of positioning the Group as a focused, lean and globally diversified gold mining company that generates significant FCF, and provides investors with a leverage to the price of gold. We believe that is a prerequisite for improving the confidence with which both buy-side and sell-side market participants view Gold Fields. Employee relations People are critical to safe operational delivery and our main human resource objectives are focused on ensuring we have the skills, culture and workforce profile necessary to meet our strategic objectives. For a full analysis of our stakeholder relationship with our workforce see p56 – 60 and our investors see p76 Government relations As the issuers of mining licences, developers of policy and implementers of regulations, host governments are among Gold Fields’ most important stakeholders. This requires first and foremost good corporate citizenship from Gold Fields in terms of adherence to all relevant legislation, including the payment of taxes and other levies. We are committed to working with governments at national, regional and local level in establishing sound and transparent working relationships that benefit the countries and 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 in accordance with the Company’s Code of Conduct. No political donations were made in 2017. West Africa region In March 2016, Gold Fields Ghana entered into a Development Agreement (DA) with the Government of Ghana for both the Tarkwa and Damang mines. The highlights of the agreement include a reduction in the corporate tax rate from 35% to 32.5% and a sliding scale royalty tax based on the gold price. The US$1,255/oz average gold price our mines received during 2017 attracted a royalty of 3%, the lowest in terms of the formula. The DA applies if Gold Fields spends US$500m at each of the two mines for an 11-year period for Tarkwa and a nine-year period for Damang. The DA can be extended by a further five years should additional investments of US$300m each be made. The DA was a critical consideration for Gold Fields Ghana to commence with the US$341m capital reinvestment programme at Damang during 2017. This is supported by a further US$1,060m in operational spending over the mine’s LoM. This investment has significant socio- economic benefits for communities around Damang. The DA will also lead to cost and cash-flow benefits for the Tarkwa mine, enabling it to invest in future expansion when required. Another DA commitment by Gold Fields was funding the construction of the 33km road between Tarkwa and Damang at an estimated cost of US$21m. This project is set to be completed later in 2018. Ghana is a key region for Gold Fields and the DA cements our status as one of the largest contributors to the country’s fiscus. In 2017, Gold Fields paid US$105m in direct taxes, royalties and dividends to the Government of Ghana (2016: US$86m). The government holds a 10% interest in the legal entities controlling our Tarkwa and Damang mines. Australia region During 2017, the Western Australian government twice announced its intention to increase the gold royalty from 2.5% to 3.75%. Gold Fields joined its gold mining peers in the state in supporting the Chamber of Minerals and Energy (CME) with the launch of the ‘Jobs First for WA’ campaign. The key focus of the campaign was to garner support The Gold Fields Integrated Annual Report 2017Licence and reputationSTAKEHOLDER RELATIONS continued 106 Gold Fields’ tax strategy and policy Our tax strategy is to proactively manage our tax obligations in a transparent, responsible and sustainable manner, acknowledging the differing interests of all our stakeholders. Gold Fields has invested and allocated appropriate resources in the group tax department to ensure we comply with our global tax obligations. The Group does not engage in aggressive tax planning and seeks to maintain professional real time relationships with the relevant tax authorities. In material or complex matters the Group would generally seek advance tax rulings, or alternatively obtain external counsel opinion. Gold Fields has appropriate controls and procedures in place to ensure that we comply with relevant tax legislation in all the jurisdictions in which we operate. This includes compliance with Transfer Pricing (TP) legislation and associated TP documentation requirements, which is governed by our Group TP Policy. Our Group TP Policy is fully compliant with OECD guidelines and is regularly updated and benchmarked by independent experts. Uncertain tax positions are properly evaluated, and reported in terms of International Accounting Standard (IAS) 37 – Provisions, Contingent Liabilities and Contingent Assets. All material uncertain tax positions as per IAS 37 are fully disclosed to, and evaluated by our external auditors. The Group is subject to South African CFC (Controlled Foreign Companies) tax legislation which is aimed at taxing passive income and capital gains realised by its foreign subsidiaries (to the extent that it was not taxed in the foreign jurisdiction). Therefore tax avoidance on passive income or capital gains cannot be achieved by shifting such passive income to low or tax haven jurisdictions. The Group does not embark on intra-group gold sales and only sells its gold (or gold-equivalent product) directly to independent third parties at arm’s-length prices – generally at the prevailing gold spot price. Active business income is therefore fully declared and taxed in the source country where the relevant mining operation is located, with the revenue accruing to the source country. The Group is reporting its key financial figures on a country-by-country basis as from 2017 onwards. The country-by-country reports are filed with the South African Revenue Service, which will exchange the information with all the relevant jurisdictions with which it has concluded or negotiated exchange of information agreements. Gold Fields also reports its total tax contribution and indicative tax rate on a country-by- country basis (p48 – 49 of the Annual Financial Report). from the public as well as opposition and cross-bench parties to block the royalty increase in the Upper House, where the WA government does not hold a majority. This campaign was successful and the proposed increase to the royalty tax was not implemented. To garner ongoing public and political support for the industry, Gold Fields together with West Australian industry peers in the Gold Industry Group, will continue to highlight the positive social and economic contributions the sector makes and how this can be further enhanced through growth in gold mining. Americas region Our engagement in Peru is focused at local, regional and national government levels to address operational, social and sustainable matters. A business-friendly national government is in power in Lima and our engagement with the relevant departments is largely carried out via the National Chamber of Mines, Oil and Energy, especially on regulatory matters. Gold Fields Peru’s legal stability agreement, signed with the Peruvian government in 1997 to facilitate the build-up of our Cerro Corona mine, expired during 2017. In terms of the agreement the taxes applicable to Gold Fields’ legal entities were fixed for the 10-year period to allow for profit and distribution to stakeholders. Gold Fields is now subject to the same taxation regime as the rest of the mining sector. At regional and local levels in the Cajamarca province, which is home to Cerro Corona, some authorities have adopted anti-mining strategies and policies, reflecting wider public sentiment among communities. During 2017, there were 11 socio-economic conflicts related to mining in the Cajamarca province – 20% of all events in Peru. However, thanks to our social and environmental policies as well as extensive engagement with all stakeholders, we have, for the most, The Gold Fields Integrated Annual Report 2017107 to the DMR on progress made against meeting the annual targets in the Charter. Gold Fields continues to comply with this process. The DMR presented an updated draft Mining Charter (Mining Charter 3) in February 2016, but a number of important aspects of the draft Charter and associated regulations were and remain disputed by the mining industry, key of which is the Black Economic Empowerment (BEE) ownership element of mining companies and the evaluation of previous BEE transactions carried out by the industry. These issues have remained largely unresolved and the Chamber of Mines, representing the vast majority of mining companies in South Africa, has had to revert to legal actions to uphold the rights of mining companies. In 2016 the Chamber applied to the High Court of South Africa for a declaratory order to clarify the binding nature of the Mining Charter and the status of previous BEE deals. This hearing was held in October 2017 with judgment reserved. Despite the lack of meaningful collaboration by the DMR with the industry, the DMR published the Mining Charter 3 in June 2017. The Chamber successfully approached the High Court for an urgent interdict to prohibit the DMR from implementing the provisions of the 2017 Mining Charter pending a judicial review. This review was scheduled for mid-February 2018, but was postponed indefinitely after a request by government, under the new Presidency of Cyril Ramaphosa, for direct dialogue between government, the Chamber and community organisations. These negotiations are ongoing. Gold Fields supports achieving a solution that is viable to support economic growth and economic transformation while at the same time fostering a sustainable mining industry in South Africa in which investment is encouraged and rewarded. received acceptance and support from the regional and local authorities and community members. Our engagement processes will be intensified now that we have extended Cerro Corona’s life-of-mine to 2030. South Africa region From a regulatory perspective, Gold Fields’ operation in South Africa is guided primarily by the Mineral and Petroleum Resources Development Act (MPRDA) of 2002. In 2014, critical amendments to the MPRDA, were tabled by the government in the MPRDA Amendment Bill, but the bill was sent back to Parliament by the country’s presidency for further consideration. Parliament has not yet made decisions regarding this and there is a large degree of uncertainty regarding the changes that will be brought about should the amended MPRDA be made law. Among other things, the proposed MPRDA grants the Minister of Mineral Resources discretionary powers which we believe go beyond the original intent of the Act and are unconstitutional, such as the ability to unilaterally set the terms of the Mining Charter at his/her discretion. Furthermore, the proposed MPRDA will require the consent of the Minister for the transfer of any interest in a listed or unlisted company which holds mining or prospecting rights as well as prescribing the levels of beneficiation for the industry. One of the key requirements of the MPRDA, which Gold Fields supports, 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 by the Department of Mineral Resources (DMR), providing for a range of empowerment actions and a corollary time frame. In terms of the Mining Charter, all mining rights holders are required to submit an annual compliance assessment Mining Charter Scorecard All mining rights holders in South Africa (including South Deep as the mining rights holder) are required to submit an annual compliance assessment to the DMR on progress made against meeting the annual targets in the Mining Charter. Gold Fields has updated its Mining Charter performance and compliance in line with an online scorecard created by the DMR in early 2015. The 2017 scorecard is shown on the following page and illustrates Gold Fields achievements against the provisions of an online scorecard created by the DMR in 2015. As part of its obligations under its mining licence, South Deep also submits a five-year Social and Labour Plan (SLP). The SLP is a key element to achieve the objectives of a company’s mining licence and includes projects benefiting communities that are impacted by mining, both in host communities and labour-sending areas. An SLP requires the mining industry to develop and implement comprehensive local economic development, skills and human resource programmes (including employment equity plans and facilitated home ownership) and mine community development. With regards to our performance against the most recent (2013 – 2017) SLP, South Deep has submitted its annual return to the DMR as at March 2018. Over the five-year period South Deep committed R703m (US$53m) to human resource development (HRD), which equates to 9.3% of payroll costs. In addition to the HRD investments, South Deep made a R53m (US$4m) developmental investment in both its host communities (R38m (US$3m)), as well as in the labour sending areas (R15m (US$1m)), via the implementation of eight defined SLP Local Economic Development (LED) projects. The Gold Fields Integrated Annual Report 2017Licence and reputationSTAKEHOLDER RELATIONS continued 108 A draft SLP for the period 2018 – 2022 was submitted to the DMR in December 2017 for approval, outlining future financial commitments of over R280m (US$21m). Although not approved as yet, South Deep is in talks with the DMR to ensure a speedy completion of the approval process for the South Deep 2018 – 2022 SLP. Some of our major commitments under the draft SLP are: • A R256m (US$18.8m) human resource development programme, which includes R81m spend on 446 learnerships, 1,224 Adult Basic Education and Foundational Learning Competency programmes (R33m), 1,025 skills development programmes (R35m) and supporting 234 bursars, interns and graduates (R60m) • A R17m (US$1.3m) infrastructure development programme in the Rand West City municipality, including R5m for the construction of a TVET College in Westonaria and R2.5m for building and equipping a science laboratory at a secondary school in Simunye • A R8m (US$0.6m) infrastructure development programme in our labour sending areas. R6m of this will be spent on building a community clinic in the Eastern Cape • Exceedance of employment equity targets at all management and professional levels • Ongoing commitment to home ownership through facilitated home ownership schemes, including the sale to employees of homes constructed and purchased by the Company • Continued improvements on procurement targets for capital goods, services and consumable goods 2017 Mining Charter Scorecard ELEMENT DESCRIPTION MEASURE PROGRESS AGAINST TARGETS AS AT 31 DECEMBER 2017 2017 MINING CHARTER COMPLIANCE TARGET Reporting Report on the level of compliance with the Revised Charter for the calendar year Ownership Minimum target for effective HDSA ownership Documentary proof of receipt from the DMR Annually Meaningful economic participation 26% South Deep annual submission Housing and living conditions Conversion and upgrading hostels to attain the occupancy rate of one person per room Percentage reduction of occupancy Occupancy rate of one person per rate towards 2014 target room 0.91 person per room ratio Conversion and upgrading hostels into family units Percentage conversion of hostels into family units Family units established Procurement and enterprise development Procurement spent on BEE entity Multi-national suppliers’ contribution to the social fund Annual spend on procurement from multi-national suppliers 0.5% of procurement value 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 Capital goods Services Consumable goods 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 Implementation of approved environmental management programmes (EMPs) Implementation of tripartite action plan on health and safety Percentage of samples in South African facilities 40% 70% 50% 40% 40% 40% 40% 40% 5% 100% 100% 100% 35% 100% 80% 83% 88% 0.86% 33%3 88% 58% 49% 73% 100% 86% 100% 10% (R184m) 90% project implementation. Up-to-date project implementation In total R58m was spent on socio-economic development (SED), including the South Deep trusts 11% of SED spend went to the implementation of LED projects in the SLP An EMP performance assessment was completed and submitted to the DMR in Q4 2016. The 2017 assessment is in progress and submission to the DMR is planned for Q4 2018 Sustainable development and growth Improvement of the industry’s environmental management Improvement of the industry’s mine health and safety performance Utilisation of South Africa-based research facilities for analysis of samples across the mining value chain Beneficiation Contribution towards beneficiation Added production volume contribution to local value addition beyond the baseline Section 26 of MPRDA (% of above baseline) Gold is refined by Rand Refinery to a 9995 fineness rating. As such, there is little value-added potential in gold industry jewellery. Fabrication is small and fragmented and cannot compete effectively with other global markets 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) 3 HDSA representation as at 31 December 2017. Post the appointment of a replacement director this has increased to 50% as at 22 March 2018. development Conduct ethnographic community consultative and collaborative processes to delineate community needs analysis Mine community The Gold Fields Integrated Annual Report 2017109 ELEMENT DESCRIPTION MEASURE 2017 MINING CHARTER COMPLIANCE TARGET PROGRESS AGAINST TARGETS AS AT 31 DECEMBER 2017 Reporting Report on the level of compliance with the Revised Charter for the calendar year Documentary proof of receipt from the DMR Annually South Deep annual submission Ownership Minimum target for effective HDSA ownership Meaningful economic participation 26% 35% Percentage reduction of occupancy rate towards 2014 target Occupancy rate of one person per room 0.91 person per room ratio 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) % 40% 40% 40% 40% 40% 5% Mine community development Conduct ethnographic community consultative and collaborative processes to delineate community needs analysis Implement approved community projects Up-to-date project implementation Sustainable development and growth Improvement of the industry’s environmental management Improvement of the industry’s mine health and safety performance Utilisation of South Africa-based research facilities for analysis of samples across the mining value chain Implementation of approved environmental management programmes (EMPs) Implementation of tripartite action plan on health and safety Percentage of samples in South African facilities 100% 100% 100% 100% 80% 83% 88% 0.86% 33%3 88% 58% 49% 73% 10% (R184m) 90% project implementation. In total R58m was spent on socio-economic development (SED), including the South Deep trusts 11% of SED spend went to the implementation of LED projects in the SLP 100% An EMP performance assessment was completed and submitted to the DMR in Q4 2016. The 2017 assessment is in progress and submission to the DMR is planned for Q4 2018 86% 100% Conversion and upgrading hostels to attain the occupancy rate of one Housing and living conditions 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 Beneficiation Contribution towards beneficiation Added production volume contribution to local value addition beyond the baseline Section 26 of MPRDA (% of above baseline) Gold is refined by Rand Refinery to a 9995 fineness rating. As such, there is little value-added potential in gold industry jewellery. Fabrication is small and fragmented and cannot compete effectively with other global markets 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) 3 HDSA representation as at 31 December 2017. Post the appointment of a replacement director this has increased to 50% as at 22 March 2018. The Gold Fields Integrated Annual Report 2017Licence and reputationSTAKEHOLDER RELATIONS continued 110 Community value creation We recognise the importance of solid community relations to our social licence to operate. We are committed to avoiding, where possible, or minimising and managing, the negative impacts of operations on our communities, while also maximising the positive benefits. Through active stakeholder engagement and our Shared Value development approach, our focus goes beyond just spending to the positive social and business impacts that our social investments can deliver. Gold Fields’ approach to creating positive community relations comprises an informed understanding of our operating contexts, stakeholder priorities and associated risks. We actively manage social risks and impacts and build relationships with our stakeholders through our stakeholder engagements. We focus on meaningful social investment to address the needs of our host communities. We strive to create Shared Value through host community procurement and host community employment. Host communities, are identified by each of our operations for the purpose of securing our mining licences – both legal and social. These communities are directly affected by and have an expectation regarding our activities. They typically include the communities nearest to our operations and, in South Africa, labour-sending areas. In 2016, all operations prepared community relations and stakeholder engagement strategies and three- year plans focused on maintaining the social licence to operate in their host communities. The regions are progressing with implementation of their three-year community relations and stakeholder engagement plans. Progress highlights for all of our mines is outlined in the infographics on p114 – 121. For details of our community relations and stakeholder engagement approach, policies and guidelines go to www. goldfields.com/ sustainability.php Measuring our impact and relationships We invest in our host communities through various social investments that are currently measured largely by spend. Given the limitations on investments, Gold Fields is committed to investing in the projects that have the greatest impact on our host communities. To this end, we want to employ a standard methodology, across all our operations, which measures socio-economic metrics, return on social investment and shared value created in order to determine which investments strengthen our social licence to operate, informing our future investment. To more effectively measure change and value impact Gold Fields has instituted socio-economic impact assessments, which was piloted at South Deep during 2017. Undertaken by a global consultancy it comprised a socio-economic baseline study of host communities impacted by the mine as well as a review of 15 of our 40 social investment projects at South Deep. The review revealed that 10 of the projects have a social return on investment greater than the inputs invested. These findings are integral in developing South Deep’s community investment strategy and project selection for 2018 and beyond. Thereafter we plan to roll out the methodology in Ghana and Peru. A summary of the findings are outlined in the infographic on p122 – 123. To understand the quality of our relationships with our communities, we conduct independent assessments to gauge the strength of our relationships with our host communities. In South Africa and Ghana, we use the ICMM Understanding Company Community Relations (UCCR) tool, while in Peru we have used the IPSOS research tool to assess our mine-community relationships. Reflecting a positive upward trend in company community relationship at our operations, the headline findings of these assessments are reflected below: Community support rose from 33% in 2015 to 52% in 2017 Community acceptance improved from 5% in 2012, to 7% in 2014, and to 32% in 2016 Strong community support with a relationship index of 73% at Damang and 78% at Tarkwa in 2015 Grievance mechanism We are committed to timeously and effectively addressing community issues and concerns. To this end, all our operations have established mechanisms through which stakeholders can share their grievances about Gold Fields, its actions or the behaviour of its employees on social, environmental and human rights issues. Mediation by a third party, usually from the local community, may be involved should our teams not be able to resolve the grievance. During 2017, the regions dealt with 76 economic, social, and environmental grievances lodged by host communities, of which 65 were resolved and 11 are still being dealt with. The regional breakdown is in the infographics on p114 – 121. SED spending We focus on socio-economic development (SED) initiatives and Shared Value programmes to create and share value with our host communities. These projects create positive socio-economic impacts for host communities by targeting their priority needs, which we have identified as: • Employment • Skills and enterprise development • Environmental rehabilitation • Access to water Programmes and projects to our host communities are delivered directly or through our trusts and foundations, often in partnership with government, NGOs and, in South Africa, with selective mining peers. The Gold Fields Integrated Annual Report 2017111 Gold Fields’ spending on SED programmes – US$17m in 2017 (2016: US$16m) – reflects the Group’s direct social investments spend in host communities. The investments – which are detailed for each region on p114 – 121 are made in the following areas: • Conservation and environment • Infrastructure • Education and training • Health and wellbeing • Economic diversification Group SED spend by type 2017 28% 6% 8% 15% 43% Economic diversification Infrastructure Health and wellbeing Conservation and environment Education and training Group SED spend 7 1 6 1 4 1 (US$m) 20 7 1 15 10 5 0 2014 2015 2016 2017 Shared Value programmes 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. Gold Fields’ regions currently have six Shared Value projects either already running or at implementation stage – which are profiled in the infographics on p114 – 121. The most critical Shared Value programmes for Gold Fields are host community employment and procurement. In 2017, our Shared Value approach was further embedded in Ghana, South Africa and Peru through the implementation of our three-year host community procurement and employment plans prepared in 2016. For both procurement and employment, we are increasingly moving the benefits from in-country to host community. Host community employment Where feasible, we strive to employ host community members at our operations. This enables alignment between the interests of host communities and our mines, expanding of local value generation and growth of local available skills. As our ability to recruit such workers may be limited due to the available skills in host communities, we are committed to local education and skills development. From 2018 onwards growth in total host community employment has been added as a component to the bonus plans of senior mine management. The number of host community members – including both employees and contractors – working at each of Gold Fields’ regions is set out on the table below. In 2017, all operation set targets for host community employment and these were exceeded. 40% of our workforce or 7,516 people are employed from our host communities. While this is significantly lower than in 2016, it reflects a change in definition in Australia, where host communities are now defined as those living within an operation’s direct area of influence. Previously, due to the fly-in, fly-out nature of most of our operations we included Perth as part of our host community area. Host community workforce1 employed from total workforce Region Peru Ghana Australia2 South Deep Group 2017 28% 68% 29% 16% 40% 2016 2015 2014 23% 72% 95% 13% 48% 29% 67% 90% 14% 59% 24% 66% 94% 12% 57% 1 Workforce comprises total employees and contractors 2 Australia’s 2017 performance is based on its new host community definition which is aligned with the Group’s host community definition where communities are those living within an operation’s direct area of influence. Previous years’ numbers have not been restated Host community procurement To enhance the national and host supplier base, which is especially important given the remote locations of several of our mines, and to create employment in those communities, we procure goods and services from the countries and host communities in which we operate, where feasible. During 2016, we developed three-year host community procurement and employment plans for Peru, South Africa and West Africa to increase the proportion of sustainable host community procurement and employment, thus driving shared value. Of our total procurement spend of US$1.86bn for 2017, 88% or US$1.62bn was spent on businesses based in countries where Gold Fields has operations (2016: US$1.36bn/83%). US$774m, or 45%, was spent on suppliers and contractors from the mines’ host communities (2016: US$558m/38%). (See table on next page.) The Gold Fields Integrated Annual Report 2017Licence and reputationSTAKEHOLDER RELATIONS continued 112 Local and host community procurement Region Peru Ghana Australia1 South Deep Group 1 Excludes Yilgarn assets Local (in-country) procurement Host community procurement 2017 2016 2015 2014 2017 2016 2015 2014 90% 85% 99% 100% 94% 89% 79% 99% 100% 92% 87% 64% 97% 100% 85% 88% 72% 99% 100% 91% 7% 13% 79% 18% 45% 8% 7% 71% 14% 38% 7% 9% 66% 10% 35% 5% 6% 69% 9% 39% In the regions West Africa Ghana has a proactive national supplier programme for its two mines, which sees these operations procure about 85% of its goods and services from companies registered in Ghana. Their total procurement spend during 2017 was US$560m. Host community procurement spend for 2017 was US$71m, against a target of US$61m or 13% for the year. Tarkwa and Damang will reset targets for procurement spending for the years 2018 to 2020 on completion of an independent goods and services assessment, as well as a community analysis. Americas In Peru, host community procurement spend for 2017 was US$11m, 7% of total procurement spend, against a target of US$13m, or 8.5%, for the year. It will be applying the Group host community procurement guidance from 2018. A system is being implemented to track all host community jobs from 2018. The implementation of the second phase of the host community supplier development programme was undertaken in 2017. With the assistance of Swisscontact, a business-oriented independent foundation for international development cooperation, improvement plans have been developed for 77 host community businesses. Thirty-four of these businesses increased their competitiveness obtaining an average 3.1 rating (on a scale of 1 to 4). Eight local suppliers have obtained contracts from customers other than Gold Fields. Five local companies were awarded bidding processes by the government. Fourteen local companies received certification from the Peruvian Ministry of Production that assures good quality in their processes and procedures, becoming the first local companies to be certified as mining suppliers. In Chile, an analysis of labour in the Atacama region was initiated as input to the development of a programme to capacitate host community suppliers for the Salares Norte project. Australia During 2017, Australia joined the Group host community procurement programme. Australia is implementing a series of strategic goals for procurement processes to enable local and indigenous participation in the value chain. Currently, Perth suppliers are included as host community but from the end of 2017 onwards, Australia will change the definition to exclude Perth and to restrict it to five host Shires, namely Laverton, Menzies, Kalgoorlie, Coolgardie and Leonora (with a total population of 36,723) and indigenous groups affiliated with Gold Fields’ operations. Under the revised definition, the host community procurement spend target for 2020 will drop from 70% to 20%. At Gruyere, plans are in place to involve indigenous communities in procurement and employment opportunities. Current indigenous employment at Gruyere is approximately 10% of the workforce. Contractors are required to submit a plan, inclusive of employment targets, as part of the tender process. Local employment targets have been set at 25%, 7% and 8% for the camp contract, the bulk earthworks as well as the engineering, procurement and construction respectively. Local participation is a fundamental consideration in the appraisal process for the mining contract. South Africa South Deep’s host community procurement project exceeded its target of R430m in 2017. The project’s vision is to have 25% of total procurement spend, or R500m (whichever is greater), redirected to the host community in 2018 and 500 new jobs created by 2020. The number of host community suppliers to South Deep increased to 88 (2016: 83) during 2017. South Deep’s total procurement spend for 2017 was R2.5bn (2016: R2.6bn) and host community procurement spend was R448m (2016: R356m), 18% (2016: 14%) of total spend. The South Deep Business Development Centre (BDC), which provides local community enterprises with training and support, complements the host community procurement project. During 2017, 130 enterprises received training via the BDC covering financial and business management, marketing, computer skills, entrepreneurship and legal and governance. In addition, 175 enterprises attended workshops run by the BDC, which covered similar topics and provided information on how to become part of the Gold Fields supply chain. The Gold Fields Integrated Annual Report 2017HUMAN RIGHTS Gold Fields currently applies a formal human rights policy statement, both in dealings with our employees as well as our host communities. The policy statement, embedded in our Code of Conduct, is aligned to the relevant ICMM Principles on Human Rights and the United Nations’ Protect, Respect and Remedy Framework. The Code of Conduct, which is fully supported by the Gold Fields’ Board of Directors, guides our business ethics and values. The human rights policy statement applies to all directors, employees and third parties (including, among others, suppliers and contractors) and regular training and awareness is offered to all stakeholders. Under the policy statement, Gold Fields commits to: • Not interfering with or curtailing others’ 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 The policy statement notes our commitment to uphold the highest standards of human rights within our workforce, including, among others, freedom from child labour, compulsory labour and discrimination, harassment, freedom of association as well as the right to collective bargaining. Given the nature of Gold Fields’ footprint and activities, our human rights activities are currently managed through the following functions: legal and compliance, sustainable development, human resources, procurement, community relations and security. 113 We carry out human rights analyses on our own activities. Our business relies on multiple contractors to carry out mining, development, construction and other forms of work on its operations. All contractors are included in our health and safety management systems, to help ensure that they benefit from safe and healthy working conditions. Our contractors also have to commit to the policies and procedures of Gold Fields, which include the Code of Conduct and the human rights policy statement. In our engagement with communities, we focus on respecting the following key human rights: Indigenous Peoples’ rights, minimisation of involuntary resettlement (subject to fair compensation where unavoidable), artisanal and small-scale mining as well as respectful security enforcement. All contractors, employees and other stakeholders wishing to report human rights violations can make use of our confidential, third-party whistleblowing hotline or the grievance mechanisms that has been established at all our operations. Where such complaints are made, we will pursue the matter appropriately. In addition, the Group has developed a third-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 social- or labour-related violations or transgressions, of which human rights form part. Gold Fields’ protection services teams work 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. A study was carried out during 2017 to assess the gaps between our current systems and the UN Voluntary Principles on Security and Human Rights. While no substantive gaps were identified, a decision was taken to close the gaps that were found during 2018. We are consistently looking at ways to improve our business and this includes evolving human rights through the identification of salient human rights issues in the Group that are relevant to our business and the global mining industry. As such, the definition of human rights activities will be widened to include activities where we, as Gold Fields, impact on our stakeholders. Once identified and contextualised, we will roll out a process to ensure we meet not only our own internal specific initiatives but that they meet the UN Guiding Principles as well. Gold Fields is committed to responsible materials stewardship. In this context, we support global efforts to tackle the use of newly mined gold to finance conflict. We have voluntarily adopted the Conflict-Free Gold Standard of the World Gold Council (WGC). The standard is applied at all relevant locations through assurance audits. Although we withdrew our WGC membership in 2014, we have and will continue to apply both the Standard and its guidelines. Further information is available at www. goldfields.com/sustainability- reporting.php. The Gold Fields Integrated Annual Report 2017Licence and reputationCOMMUNITY RELATIONS IN AUSTRALIA 114 Build relationships and trust • In 2017, Gold Fields Australia undertook a review of its stakeholder relations strategic plan, which covers all stakeholders from Aboriginal people and community groups at a local level, to local shires, and ultimately State and Federal Government. The requirements of the Gruyere Native Title Agreement are now integrated into this plan • With regard to Aboriginal people, our engagement approach has been established over many years with a focus on the preservation of cultural rights and heritage. At all sites, Aboriginal people regularly undertake heritage surveys across the operations to identify any potential sites of significance that require protection Create and share value Project 1: Host community procurement Our host community procurement seeks to deliver opportunities for local participation in our value chain. During 2017, we reviewed our procurement practices across the region and developed a strategy to enhance local participation (see p112). To date, we have realised the following opportunities, including: • The development of cultural awareness programmes to all employees and contractors to understand the local culture and the importance of the land upon which the mines are situated • The completion of heritage surveys across areas of proposed disturbance. These surveys are undertaken by local Aboriginal people, given their intimate knowledge of the area and the culture. No new land is allowed to be disturbed prior to obtaining their authorisation • A sub-contract has been awarded to local Aboriginal people to construct fences on the Gruyere construction site, which could be extended to ongoing fence maintenance • Some of the key strategies to encourage host community procurement include giving preference to tenderers and primary vendors who maximise host community content (particularly from indigenous-owned businesses) and seek to partner with local and indigenous contractors Benefits to the community Host community employment provides direct and indirect economic benefits to host communities through increased earnings and spending power. Through our skills development programmes, it also provides employed community members experience and learning, which in turn opens other job opportunities. Benefits to Gold Fields Host community employment provides us with a local pipeline of skills, as well as enhancing diversity at the workplace. Other material value creation projects Our SED spending in Australia is largely channelled through the Gold Fields Australia Foundation, which is administered by an independent board of trustees. The Foundation is investing in projects that are primarily aimed at improving access to healthcare in remote communities in Western Australia. • One of the main projects allows for diagnosis of rare diseases using three-dimensional facial imagery. Our investment in this technology has been focused on developing the image database for Aboriginal people, which continued into 2017 Costs: A$50,000 (US$33,500) in 2016 Context • Our operations in Australia are situated in sparsely populated areas of Western Australia. Previously our definition of host community included Perth, considering the strong links between the city and regional communities and the fly-in, fly-out nature of most of our mining camps. In 2017, we revised this definition to focus on those communities that are in close proximity to our operations • Our host communities are home to an estimated 36,723 people in the Shires of Laverton, Menzies, Kalgoorlie, Coolgardie and Leonora. The majority of the people reside in the city of Kalgoorlie with an estimated population of 30,000 • In 1993, the Commonwealth Native Title Act was enacted to provide a framework for the recognition and protection of the Native Title rights of Aboriginal people, who have rights and interests under traditional laws and customs over much of Australia, including over many mining tenements. In recent years, a number of Native Title claims have been successful in Western Australia and for mining tenement applications that are the subject of such claims, the consent of the relevant Native Title group must be obtained as a precondition to the grant of tenure • Economic opportunities for Aboriginal people in many remote communities are limited. Aboriginal people only represent 3% of the Western Australian population; however, in our host communities this representation varies from 3% to 45% • In 2017 we took over management of the Gruyere gold project in Western Australia, from Gold Road Resources. A Native Title agreement over the area was concluded between Gold Road and the Yilka People in 2016, granting the Gruyere mining tenure in exchange for a range of financial and non-financial benefits. This agreement has been assigned to Gold Fields The Gold Fields Integrated Annual Report 2017115 M O C K U P P I C T U R E Graduates Travis Germain (left) and Brandon Graham (right) of the Australian Aboriginal Tertiary Scholarship programme • In partnership with the Harry Perkins and the Lions Eye Institute, we fund the development of a prototype eye scanning unit. This portable unit can be transported to remote communities and used in the diagnosis of eye-related health concerns. The first prototype is currently undergoing testing Costs: A$50,000 (US$33,500) in 2016 • We are providing young Aboriginal people with the opportunity to pursue tertiary education. Scholarships are not restricted to mining-related disciplines and to date, 12 people have been through the programme, 10 of whom are in current full-time employment, with two participants completing their studies in 2017. A further three scholarships have been awarded for 2018 Costs: A$30,000 (US$23,000) in 2017 and A$385,000 (US$296,000) to date For more details on the Gold Fields Australia Foundation go to www.goldfields.com/societal-stakeholders.php Manage risk and impact Project 1: Engaging with Native Title holders at the Gruyere project Risk: The composition of the Native Title rights holders is somewhat unusual at the Gruyere project. Two Native Title claims were progressed through the Federal Court in parallel, but were ultimately determined as a single claim (with the rights held by a single group). This created some challenges for the Gruyere project team to engage on a group basis with the two different groups. Action: • Engaged with Native Title holders collectively to encourage consolidation of the group • Appointed a Community Liaison Officer at Gruyere and consider establishing a project office in the nearby Cosmo Newberry village • Regular meetings between Gruyere management and Native Title holders • Apply learnings at other Gold Fields’ mines with a particular focus on host community employment and procurement Project 2: Preserving cultural heritage Risk: Sites of ethnographic and archaeological significance occur all over Western Australia and there is a risk that these sites could be damaged due to exploration and construction activities. Action: • Cultural heritage management plans are developed as appropriate at all sites • All areas of disturbance are surveyed using relevant experts and local Aboriginal people • Exclusion areas have been established for areas of high significance • Site disturbance protocols have been implemented • Provision of cultural awareness training by local Aboriginal people to our workforce Measure actions and impacts SED spend in Australia 2014 – 2017 (US$m) 2 1.5 1 0 0.3 0.3 0.2 2014 2015 2016 2017 Grievances During 2017, one community grievance was submitted, which pertained to the Native Title at the Gruyere project, where the Yilka people successfully registered a Native Title claim in 2009. This registration meant that Yilka consent was necessary for the grant of mining tenure. This consent was provided in 2016 (prior to Gold Fields acquiring its interest in the project). As the Yilka claim progressed, a smaller group of Aboriginal people (Sullivan Edwards) lodged a secondary claim. The unregistered status of this group meant that their consent was not required to the grant of the Gruyere mining tenure, and they did not participate in the negotiation process. Despite the lack of registration, the rights of the Sullivan Edwards group were ultimately recognised in the formal determination of Native Title by the Federal Court. Gold Fields has sought to engage with the Sullivan Edwards group, but notwithstanding this engagement, lawyers representing the group submitted a grievance to Gold Fields, alleging a failure to engage. Our engagement approaches are continuing. The Gold Fields Integrated Annual Report 2017Licence and reputationCOMMUNITY RELATIONS IN AMERICAS 116 Context • The national government of Pedro Pablo Kuczynski, without a majority in Parliament, has struggled to assert its pro- business economic policies • Mining remains the mainstay of Peru’s economy with a current project portfolio of almost US$50bn and another US$10bn in new projects being proposed for 2018 • While not as numerous as in 2016, community protests against mining occur regularly, including in the Cajamarca province, which is home to our Cerro Corona mine as well as Newmont and Buenaventura’s stalled Yanacocha project. One of the projects expected to start soon in Cajamarca, Southern Copper’s Michiquillay copper mine, has already established a US$130m social fund run with local communities • Cerro Corona is located in the district of Hualgayoc, where agriculture and cattle raising are the main economic activities. The mine’s direct area of influence include the city of Hualgayoc and six rural villages. Around 6,000 live in the area of influence (2011) • Poverty in the Cajamarca region, including Hualgayoc, is prevalent with 40% of children under the age of three suffering chronic malnutrition. Education levels are also low by national standards: 11% of men and 39% of women are illiterate. While 90% of the district’s population now has access to electricity, only 40% have access to piped drinking water and only 7% live in sewered households • Cerro Corona’s latest perception study (2016) indicates that the main needs of our local communities are access to drinking water, employment and support for their economic activities Build relationships and trust • During 2017, our community relations activities were focused on strengthening trust with our key stakeholders. Our community relations strategy was revised to adjust to Cerro Corona’s new LoM (until 2030) • We actively support and attend the monthly dialogue and consultation round table in Hualgayoc, which is chaired by the district mayor and includes community representatives. The majority of our community projects are approved at these sessions • A number of engagements take place with communities on a regular basis, including guided visits to Cerro Corona (almost 72% of pupils in the district have participated). We also sponsor a number of events, including religious festivals, health campaigns and a radio contest for school students • We are relaunching some of our community projects in line with principles set out in government’s Works for Taxes system, which lets us recover some of our investments in social projects against our income taxes Create and share value Project 1: Water supply to communities During 2017, one of our main community goals was to bring permanent, high-quality, drinkable water to our communities, in line with our goal to ensure that all our impacted communities have access to clean water for both domestic and agricultural purposes. During 2017 and 2018 three main projects were completed or are in development: • The construction of the Pilancones pumped water system was finalised in 2016 and during 2017 was maintained and operated by the community, ensuring continuous water supply • Construction of the water systems for the Kiwillas and Lipiag hamlets’ commenced in 2017 and will be completed in early 2018. The construction involves 19km of distribution piping, 134 house connections, three water reservoirs and three water catchments • The Cuadratura water project is set to commence this year. Development will be in three stages and includes structural improvement works on the Cuadratura dam (water source), a new water treatment plant, an 80m3 reservoir, water facilities and pipelines. The project is set for completion in mid-2018 Costs to date: US$870,000 Benefit to the community Over 200 families in the Pilancones hamlet now have permanent access to drinking water. The Cuadratura dam water system and the Kiwillas-Lipiag projects will provide water to more than 4,500 inhabitants at a low cost. Benefit to Gold Fields This project strengthens our social licence and reputation in a region where many mining companies have experienced water-related conflicts with their local communities. Project 2: Development of local suppliers A four-year project to improve the competitiveness of our host community suppliers was finalised in 2017. This project was developed in partnership with Swisscontact. The main achievements of this project are: • 77 local suppliers were analysed and improvement action plans implemented • 34 of these suppliers increased their competitiveness • 14 local suppliers obtained a quality certification • Eight suppliers won services contracts from companies other than Gold Fields Workshops were also offered to improve service delivery and improved machine efficiencies. Costs to date: US$700,000 (since 2014) Benefit to the community Individual host community suppliers will derive long-term benefit from targeted plans to help them to improve their competitiveness and to diversify their customers’ portfolio, while their communities will have more employment opportunities. Benefit to Gold Fields With this project Gold Fields will be able to obtain a better service from its local suppliers, while also helping to increase local employment. The Gold Fields Integrated Annual Report 2017117 Other material value creation projects • Our cattle-breeding programme continues with over 500ha of improved pastures developed during 2017, leading to an average 10% increase in milk production among farmers we support in the district. Costs to date: US$1.28m • The ‘Adapting Together’ programme in 2017, aimed at supporting appropriate policies to mitigate the impact of climate change in the Hualgayoc district, led to the reactivation of the municipal environmental committee. Gold Fields also funded the irrigation system for 60ha of potential agricultural land. Costs to date: US$160,000 Manage risk and impact Project 1: Houses with high risk of collapse in Hualgayoc Risk: Possible social protests set off by the collapse of houses with structural damage in Hualgayoc City. Action: • After a first assessment, and with the participation of the municipality and community, nine houses have been rebuilt since the project started in 2014 • A second assessment took place in 2016-2017 identifying 28 houses with serious structural damage. Net reconstruction of 22 houses to commence in 2018. Six houses to be abandoned and demolished Spend to date: US$1.04m (since 2014) Project 2: Restrictions for raising of our TSF above the Las Tomas spring level Risk: Protests by the Manuel Vasquez Association (MVA), a local community organisation. Action: • Raising of the water spring in line with the legal and regulatory permits in 2016 • Construction of 12km of the MVA water system pipeline, benefiting 1,500 households within 18 hamlets was completed in 2017. A further expansion of the MVA water system is currently being evaluated • Construction of a platform around the Las Tomas water spring – to separate it by 80m from the TSF – to commence in 2018 Spend to date: US$4m (since 2015) Project 3: Exploration agreements with communities Risk: Without consent from local communities, no exploration activity can take place. Exploration is important for further life extension of Cerro Corona. Action: • Extensive stakeholder engagement activities in communities (medical campaigns and educational support) • A pilot exploration campaign took place in La Tahona Baja hamlet during 2017, with the participation of the community and employing members of the community • Further engagement with the Cuadratura hamlet to implement the signed exploration agreement • Continued negotiations to finalise an exploration agreement in two communities (Tranca de Pujupe and El Tingo) • Identification of key stakeholders in four communities concluded: Chulipampa, Tumbacucho, Vista Alegre Alto and Vista Alegre Bajo. Measure actions and impacts SED spend in Peru 2014 – 2017 (US$m) 8.29 7.99 8.54 6.49 10 8 6 4 2 0 2014 2015 2016 2017 Peru SED contributions by type 2017 (%) 25% 23% 14% 24% 14% Economic diversification Infrastructure Health and wellbeing Conservation and environment Education and training Grievances Twelve grievances were recorded during 2017 with five carried over from 2016. Combined, six related to the alleged impact of blastings from the mine, four were environmental, two related to social development and five were employment-related. Eleven of the grievances were resolved, while six are still being investigated in dialogue with the complainants, including four related to houses in the Pilancones hamlet, allegedly damaged by the mine’s blasting. The Gold Fields Integrated Annual Report 2017Licence and reputationCOMMUNITY RELATIONS IN GHANA 118 Build relationships and trust • Stakeholder engagement is a business imperative for Gold Fields Ghana. In 2017, the mines further built relationships with key stakeholders including communities, employees, traditional leaders, local and national government, and civil society groups. Several formal engagement platforms are in place • The local employment committee was critical in 2017 when Damang migrated from owner mining to contract mining, following a US$341m reinvestment in operations. Community leaders participate in the committee which is headed by a local chief. The committee helped to dissipate tension and address community hiring needs during the contract mining transition. This committee model has since been adopted by both operations in labour recruitment • To deepen stakeholder engagement, an updated three-year community relations strategy and implementation plan was prepared for roll-out in 2018. The strategy focuses on building trust, measuring the mines’ impact, and sharing benefits with communities Create and share value Most of our community investment projects are funded by the Gold Fields Ghana Foundation, which receives 1% of our mines’ pre-tax profits and US$1 for every ounce of gold sold by them. Project 1: Road rehabilitation The 33km public road rehabilitation between Tarkwa and Damang, host to our two mines, commenced in 2016, funded by Gold Fields Ghana. It was a commitment under the Development Agreement. During 2017, the design of the road was revised to include additional drainage, pavement redesign, sub-base reinforcement, and an asphalt finish. The revised design is expected to increase the road’s lifespan from about seven years to 20+ years and has raised the cost of the road to US$21m from the original US$17m. Construction will take a further six months. Benefits to the community Most workers engaged on the road construction are from the host communities. Upon completion, the improved road infrastructure will reduce travel time, increase access to social amenities and markets, reduce the cost of transportation, and increase economic activities along the route. Dust pollution will be eliminated, and safety will improve. Benefits to Gold Fields An improved road infrastructure will reduce light vehicle maintenance costs, labour transportation costs, goods and materials haulage, road maintenance costs, and reduce employee travel time and driver fatigue. Project 2: Youth employment in agriculture The Youth in Horticulture Production (YouHoP) programme, aimed at generating employment and improving incomes for the host community youth started in 2016. Gold Fields and the German Development Cooperation (GIZ) are investing over €800,000 (US$1m) over a three-year period. The programme targets 1,000 community youth in the mines’ host communities. Phase one of the programme implementation began in 2017 with 120 farmers engaged in vegetable production. Their first harvest, which was impacted by pest infestation, was sold to catering firms operating on the mine and to local markets in Tarkwa and Takoradi. Spend to date: US$327,000 Benefits to the community • Reduce youth unemployment • Improve agricultural production in the area • Improve youth incomes Benefits to Gold Fields • Reduce tension between the mines and the communities • Maintain social licence to operate and improve reputation Context • Potential new taxes introduced by a new government have minimal impact on the Tarkwa and Damang operations owing to the Development Agreement between Gold Fields Ghana and the government in 2016 • The government campaigned against illegal mining, supported by the media and other civil society organisations. They suspended small-scale mining activities. This exacerbated youth unemployment, especially in mining communities, pressurising the formal mining sector to offer greater employment opportunities • Tarkwa and Damang, in the Western region of Ghana are both close to other large-scale gold mines, including AngloGold Ashanti’s Iduapriem and Golden Star’s Wassa • The Tarkwa mine located in the Tarkwa/Nsuaem municipality, which has a total population of 90,477 (2010 census). The mine has nine host communities that are impacted by its operations. These communities (and Tarkwa town) have a population of 47,861 (2010 census), representing about 53% of the municipality’s population, and are under the traditional jurisdiction of the Apinto stool of the Wassa Fiase Paramountcy. The municipal working population are mainly engaged in agriculture, the informal sector, industry and services provision • Damang, in the Prestea/Huni- Valley district, has a total population of 159,304 (2010 Census). Damang has nine host communities and a few informal settlements. With a total of 36,231 people (2010 census), Damang’s host communities represent about 23% of the district’s population and are under the traditional jurisdiction of the Bosomtwe stool of the Wassa Fiase Paramountcy. Over half of the working population in the district are engaged in crop farming and almost 30% in livestock rearing The Gold Fields Integrated Annual Report 2017119 Measure actions and impacts SED spend in West Africa 2014 – 2017 (US$m) 8 6.47 3.39 3.42 1.68 4 0 2014 2015 2016 2017 West Africa SED contributions by type 2017 (%) Economic diversification Infrastructure Health and wellbeing Conservation and environment Education and training 0% 1% 7% 10% 82% Grievances Our grievance mechanism enables and encourages community members to freely put forward their complaints, while obligating the mines to address the grievances within an agreed period. 54 grievances were received by both mines through their formal mechanisms during 2017 (2016: 64), relating to land issues, compensation, and environmental issues, 46 of these were resolved and eight are being processed. Three of the four unresolved grievances lodged during 2016 were addressed during 2017. The outstanding grievance from 2016 relates to a group of farmers near the Tarkwa mine’s Kottraverchy waste dump area, who disputed previously- paid compensation, and subsequently petitioned the Environmental Protection Agency (EPA) to mediate. The farmers argued that their crops and structures were not accurately assessed and valued. Based on a recommendation by the EPA, agreed to by both parties (the farmers and the Tarkwa mine), an independent valuation was carried out to re-evaluate the crops and structures in 2017. The revaluation was completed but the farmers again rejected the recommendations and have since petitioned the Member of Parliament (MP) for the Tarkwa-Nsuem constituency for redress. Rehabilitation of the road between Tarkwa and Damang Other material value creation projects: • Phase II of the construction of a laboratory for the University of Mines and Technology in Tarkwa was completed and handed over, at a cost of US$140,725. The facility will improve academic education, providing a pipeline of future mine employees. • Scholarships and bursaries to cover tuition and residential fees were provided for qualifying pupils and students. 110 new scholarships and bursaries were awarded for tertiary students for the 2017/2018 academic year at both Tarkwa and Damang, at a combined cost of US$290,450. For more information of the Gold Fields Ghana foundation go to www.goldfields.com/societal-foundations.php Manage risk and impact Project 1: Damang – Resettlement and compensation Risk: 88 farmers livelihoods could be affected by the Amoanda pit expansion and three farmers by the Lima South project. This could potentially impact the mine’s reputation and social licence to operate. Action: 81 of the farmers, mostly migrants, opted for cash compensation for their farms and structures. The land owners were compensated in cash. Ten farmers have been temporarily accommodated while buildings are completed, in line with an agreed resettlement action plan. Relocation is expected to be completed in mid-2018. Farmers will be monitored and evaluated for the six-month defect liability period and to ensure effective integration of the farmers into the receiving community. Spend to date: US$347,000 Project 2: Damang and Tarkwa – Host community youth unemployment Risk: High unemployment in host communities remains a top risk, due to the lack of job opportunities and the government campaign against ASM. Action: Strategies being implemented include: • Skills training and youth skills development for the mining and construction industry • Involvement of local leaders in the mines’ employment process • Expansion of the Youth in Horticulture Production programme Spend to date: US$174,000 Project 3: Tarkwa – Impact of blasting Risk: Persistent complaints of blasting vibration and noise from the mine’s adjoining communities could attract regulatory sanctions, including suspension of mining activities. It could also affect the mines’ social licence to operate. Action: A blast monitoring team, involving community representatives, was instituted. In addition, new electronic blasting techniques were introduced. A blasting zone of influence was demarcated and noise bunds were erected. Spend to date: US$279,000 The Gold Fields Integrated Annual Report 2017Licence and reputationCOMMUNITY RELATIONS IN SOUTH AFRICA 120 Build relationships and trust • A three-year stakeholder relations plan was designed in 2016 to build social capital and is currently in implementation • Gold Fields contracted an independent relationship assessment of its nine host communities during 2016/17 using the ICMM’s Understanding Company-Community Relations tool. Community support for Gold Fields has increased from 33% in 2014 to 52% in 2017 • Monthly community meetings and open days were successfully implemented in partnership with a non-governmental organisation, the Federation for a Sustainable Environment, with an attendance of more than 200 people at each event. This partnership has resulted in increased community awareness of environmental rights, the impacts of gold mining on the environment and the mine’s environmental and social management plans and performance • Ongoing engagements with all three-tiers of government were conducted during 2017 • The round table established in 2016, conducted several successful engagements this year, with representatives from the mining companies (Gold Fields and Sibanye-Stillwater), the local and district municipalities and the West Rand community stakeholder forum Create and share value • South Deep works in strategic partnership with its mining neighbour, Sibanye-Stillwater, and the South Deep trusts (the South Deep Education Trust, the South Deep Community Trust and the Westonaria Community Trust) in an approach that creates scaled impact in its host community. Key development areas, such as education, health and income generation are addressed through this collaborative approach • South Deep undertook a rigorous assessment and valuation of impact of its 2011 to 2016 community investment projects. An independent consultancy conducted a Social Return on Investment (SROI) analysis of selected projects. The findings have informed the mine’s new social and labour plan (SLP 2018 – 2022) and other community investments • Like other mines in the Gold Fields Group, host community employment and host community procurements have been prioritised at South Deep, as they have the most direct and beneficial economic impact on our communities. A dedicated host community procurement project has been developed over the past few years with a target of allocating 25%, or R500m, of the mine’s procurement spend to enterprises in Westonaria by 2020. This programme is exceeding its targets. For more details see p112 Project 1: Health infrastructure Health has been a key investment area for South Deep and its partners due to the challenging local conditions and risks to employees. The SROI study indicates the investment in the Thusanang Clinic, adjacent to our mine, and the Pilani Clinic in the Eastern Cape were impactful. South Deep co-funded the construction of the clinics in partnership with the Department of Health. Spend to date: R1.5m (US$110,000) for Thusanang Clinic and R11.2m (US$830,000) for Pilani Clinic. Benefit to the community The Pilani project has supported improved access to primary healthcare services for local communities and reduced travelling time and cost to access these services. This support improved health outcomes for patients, with 400 additional patients being able to access services at this clinic. The Thusanang Clinic had similar positive outcomes for residents and employees, who previously had to travel to other areas some distance away to access services. The Thusanang Clinic handled 9,000 cases between August 2016 and August 2017. The project resulted in 20 temporary labour jobs during construction and three permanent administrative jobs. Benefit to Gold Fields Investment in healthcare creates benefit for the mine since it provides access to health services for our employees and their families. Context • The South Deep mine is located near Westonaria in the West Rand District Municipality of the Gauteng province, approximately 45km from Johannesburg. The West Rand is a historic gold mining district, with South Deep operating alongside mines managed by Sibanye-Stillwater, Harmony Gold and AngloGold Ashanti. Many of these mines have been retrenching thousands of employees in recent years, including an estimated 7,000 employees and contractors at Sibanye-Stillwater’s Cooke mine, adjacent to South Deep • South Deep has identified nine host communities, with a combined population of about 109,000 people, which are directly affected by the operation due to sharing of roads, water and the physical environment. Reflecting the fortunes of the mining sector, growth in the municipality has been a negative 0.5% a year between 2011 and 2016. The official unemployment rate is 32% • We have identified key labour sending areas, i.e. homes of origin of large numbers of employees, which include the Eastern Cape, Limpopo and North West provinces in South Africa as well as Lesotho and Mozambique • During 2017 South Deep commissioned a socio-economic baseline study on Westonaria based on various data sources from between 2011 – 2016. The material findings are summarised on the next two pages (p122 – 123) • The 2016/17 independent mine-community relationship assessment indicates that South Deep’s relationships with the majority of its host communities have improved significantly over the last two years (p110w) • The top development priorities, based on the local and district municipalities’ plans as well as identified community needs include education, infrastructure, enterprise development and procurement, community safety, youth employment and skills development The Gold Fields Integrated Annual Report 2017121 Project 2: Education Gold Fields and the South Deep trusts continue to invest in education as a key driver to improve the long-term economic conditions in host communities and to improve the mine’s local employment pipeline. The mine’s focus is on skills development in the areas of mathematics and science, adult basic education and training (ABET), skills development and educational infrastructure. Together with the trusts, the mine also provided bursaries and learnerships. Spend to date: R3.4m (US$250,000) for the Healdtown College. Benefit to the community • The investment in the Healdtown College in the Eastern Cape improved the lives of 186 students directly, while improving the infrastructure for future students. 20 temporary jobs were created during construction work and the project improved relations with the Department of Education in the Eastern Cape • South Deep’s ABET programmes, part of South Deep’s SLP commitment, had a direct benefit for 731 participating learners • A partnership investment between Gold Fields and the Trusts had the greatest SROI impact, with 1,061 learners benefiting from local Technical and Vocational Education and Training (TVET) facilities. Courses offered at these institutions are vocational or occupational by nature and increases the employability of the learners Benefit to Gold Fields Investment in education across the lifespan improves the long-term potential for local employment and provides the mine with a pipeline of skills. Measure actions and impacts SED spend in South Africa 2014 – 2017 (US$m) 6.00 4.21 3.66 3.90 4.33 4.00 2.00 0 2014 2015 2016 2017 South Africa SED contributions by type 2017 (%) 12% 14% 7% 4% Economic diversification Infrastructure Health and wellbeing Conservation and environment Education and training 63% Manage risk and impact Project 1: Thusanang informal settlement Grievances Risk: Close proximity of an informal settlement with disgruntled residents and employees increases the risk of opposition to the mine, as well as affect the lives of the residents. Gold Fields works in partnership with the municipality and Thusanang land-owners, to monitor the growth of the informal settlement, since unmanaged influx negatively impacts on the living conditions of all residents. The settlement has grown from 121 dwellings in 1998, to 1087 dwellings in 2017. Action: • Frequent and ongoing community engagements • Establishment of a multi-stakeholder forum chaired by the Mayor of the municipality and successful meetings throughout 2017 • Construction of the Thusanang Clinic, support to the library, grading of roads and ongoing support Our complaints and grievance mechanism is functional, and visibility and transparency has been increased through widespread communication about the instrument. We logged and resolved nine complaints of an environmental and social nature in 2017. Partnerships with South Deep trusts South Deep Community Trust Spend 2017: R3.1m Spend to date (2010 – 2017): R13.7m South Deep Education Trust Spend 2017: R15m Spend to date (2010 – 2017): R71.1m Westonaria Community Trust Spend 2017: R1.5m Spend to date (2010 – 2017): R15.8m Key projects during 2017: • Enterprise development • Agricultural project in Limpopo • SMME development Key projects during 2017: • 71 scholarships for high school students Key projects during 2016 – 2017: • Westonaria TVET College • Salaries of two social workers in • 37 bursaries for tertiary education the Rand West municipality students • Upgrading of sports facilities in Westonaria • Introduction of social entrepreneurship training For more details on the South Deep Trusts see www.goldfields.com/ societal-stakeholders.php The Gold Fields Integrated Annual Report 2017Licence and reputationSOUTH DEEP’S SOCIO-ECONOMIC IMPACT 122 COMMUNITY PROFILE: 2016 DATA MUNICIPAL POPULATION Population 108 902 (2011:111,767) 55% 45% 7% 93% CHANGE IN RESIDENTS’ AGE (2011 – 2016) ELDERLY +31% 65 35 15 YOUTH -12% -3,000 -2,000 -1,000 0 1,000 2,000 3,000 MUNICIPAL UNEMPLOYMENT 32% 39% Total unemployed Unemployed youth CRIME STATISTICS Violent crime (1,370) Drug-related (94) Murder (69) Sexual offences (127) Robbery @ residential (299) Rate per capita (per 100 000 people) The information on host communities contained in this circle comprises data from the community database from 2011 – 2016 (Stats SA) and the Gold Fields employee database of 2017 WESTONARIA: SOUTH DEEP’S HOST COMMUNITIES Westonaria ● Population 10,000 Employed Gold Fields 4,000 559 Hillshaven ● Population Employed Gold Fields 2,500 4,000 523 Glenharvie Population Employed Gold Fields 6,300 3,800 350 South Deep Hostels 1 065 Mine community support (% rating per ward) ● >60 ● 56-60 ● 51-55 ● 46-50 ● 40-45 HOUSING Formal (60%) Informal (38%) The Gold Fields Integrated Annual Report 2017 WESTONARIA: SOUTH DEEP’S HOST COMMUNITIES Bekkersdal ● Population Employed Gold Fields 46,000 12,700 374 123 % where employees come from (place of birth) EMPLOYEE PROFILE: 2017 DATA 8% 6% EMPLOYEE DEMOGRAPHICS 41% 2 594 (41%) 4% 6% 4% 7% 4% 18% ● Increase (since 2011) ● Decrease (since 2011) 41% of employees originate from Gauteng EMPLOYEE RACE AND GENDER Number of employees 6,268 Permanent 3,727 Contractors 2,541 83% 17% 14% 86% Average age: 42 34 EMPLOYEE LANGUAGE 0% 5% 10% 15% 20% 25% Xhosa Sesotho Afrikaans Xitsonga Zulu Tswana Northern Sotho Swazi English Venda Foreign languages Ndebele EMPLOYEE EDUCATIONAL LEVELS 4% NONE 35% GET 51% FET 10% HET 5% NONE 8% GET 69% FET 18% HET Definitions: GET General Education and Training FET Further Education and Training HET Higher Education and Training Simunye ● Population Employed Gold Fields 2,200 1,300 272 Thusanang ● Population Employed Gold Fields 2,200 1,300 385 Poortjie ● Population 10,900 Employed Gold Fields 2,600 384 ● Bad performance ● Medium performance ● Good performance Access to water Access to sanitation Access to electricity Access to waste removal The Gold Fields Integrated Annual Report 2017Licence and reputation SUMMARISED CORPORATE GOVERNANCE 124 Corporate governance overview To be a global leader in sustainable gold mining, we entrench the highest standards of corporate governance in our operations. Our approach to governance 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, while operating ethically at all times. At a minimum, we comply with all laws and regulations as well as the highest levels of corporate governance, and often our governance practices exceed the legal minimum. 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. 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. The Board is responsible for ensuring an ethical culture is entrenched in the organisation and reflected in its relationships with stakeholders. In November 2016 the King IV Code on Corporate Governance (King IV) was launched and subsequently adopted by the Johannesburg Stock Exchange and integrated into its listings requirements. The Board decided in February 2017 to apply the principles of King IV at Gold Fields. The Board concurred that principles that are capable of being implemented immediately should be implemented and the remainder to be implemented as work in progress. The outcome of the gap analysis, which revealed that the Company was materially compliant, was considered and discussed by the Board in November 2017. Our King IV Compliance Register can be found in the full Governance Report on p17 – 18 of the Annual Financial Report. 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 Chairperson of the Board and the CEO are kept separate. Non-executive director Cheryl Carolus was the Chairperson of the Board and Nick Holland the CEO of Gold Fields for the entire period under review. Chairperson • Responsible for leading the Board and for ensuring the integrity and effectiveness of the Board and its committees • Ensures high standards of corporate governance and ethical behaviour Chief Executive Officer • Responsible for the effective management and running of the Company’s business in Non-Executive Directors terms of the strategies and objectives approved by the Board • Chairs the Company’s Executive Committee, leads and motivates the management team and ensures that the Board receives accurate, timely and clear information about the Company’s performance • Non-executive directors, who are independent of management, offer an independent view and 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 Gold Fields Integrated Annual Report 2017125 Number of Board meetings, Board Committee meetings and Directors’ attendance during the year Ad hoc committees Board meetings Special Board Meetings Other Investment Audit Committee Safety, Health and Sustainable Development Committee (SHSD) Capital Projects, Control and Review Committee Social, Ethics and Transformation Committee (SET) Nominating and Governance Committee Remune- ration Committee Risk Committee 4 4 4 4 4 3 4 4 4 4 4 4 2 3 3 3 3 3 3 2 1 2 3 3 2 — 1 1 — — 1 — — 1 1 — — — — 1 — 1 1 — — 1 — — — — 1 — 6 — 6 6 — 3 6 5 6 1 6 6 4 4 4 3 — 4 3 4 3 4 4 — 3 — 4 4 2 4 4 3 4 4 — 4 2 4 2 4 4 3 4 — — 4 4 4 4 — — 2 4 3 3 1 3 3 4 3 4 2 — 4 2 4 4 — — — — 4 4 4 4 — — — 2 — 1 2 2 1 2 — — 1 2 2 1 Directors No of meetings per year CA Carolus1 A Andani1 PJ Bacchus1 TP Goodlace1 C Letton1, 2 NJ Holland RP Menell3 DMJ Ncube1 SP Reid1 PA Schmidt YGH Suleman1, 4 GM Wilson5 1 The Board revised and approved the following sub-committee compositions with effect from the August 2017 Board meeting. • SP Reid stepped down from the Risk and SET committees. He attended the subsequent Risk Committee and Audit Committee meetings by invitation • A Andani stepped down from the SHSD and Risk Committees • TP Goodlace stepped down from the SET Committee • C Letton was appointed to the SHSD, Risk, as well as Capital Projects, Control and Review Committees. She attended the Audit Committee by invitation • PJ Bacchus attended the SET Committee meetings by invitation • YGH Suleman became a member of the Capital Projects, Control and Review Committee • DMJ Ncube attended the SHSD by invitation • CA Carolus attended the Capital Projects, Control and Review Committee by invitation 2 C Letton was appointed to the Board with effect from 1 May 2017 3 RP Menell has a conflict of interest with regards to the Cooke 4 Closure matter and recused himself from the 14/06/2017 special Board meeting dealing with the issue. He attended the Remuneration Committee by invitation 4 YGH Suleman recused himself from the Board meeting held on 18 September 2017 and the ad hoc Board meeting on 18 October 2018. These meetings considered the role and suitability of our external auditors KPMG 5 GM Wilson retired from the Board with effect from the AGM in May 2017 The full Directors’ Report is contained in the Annual Financial Report (p21 – 27) Key deliberations and decisions taken by the Board Recomposition of a number of Board committees Gap analysis and implementation of the King IV principles Review of Gold Fields’ operational plans and strategies Approval of a A$500m revolving credit facility to fund Gold Fields’ commitment to the Gruyere gold project Roll-out of the information and technology strategy, which was approved by the Board in November 2016 Approval of the capital allocation and project ranking strategy Approval of a Diversity Policy as well as updated Stakeholder Engagement, Sustainable Development and Climate Change policy statements Approval of the sale of the Arctic Platinum project Approval of contractor mining at Tarkwa The Gold Fields Integrated Annual Report 2017Licence and reputationSUMMARISED CORPORATE GOVERNANCE continued 126 1 2 3 Board gender diversity (%) 100 80 60 40 20 0 0 8 0 8 1 8 1 8 27% 18% 55% 0 2 0 2 9 1 7 1 2014 2015 2016 2017 Female Male 2017 tenure ● 0 – 2 years ● 3 – 8 years ● >9 years Combined key skills of the board of directors Investment banking Business development Governance and compliance Risk management Investor relations Strategy Leadership Accountancy Auditing Financial management Operational management Mining Geology Metallurgy Energy management Human resources Community relations Public affairs Health and safety management Project management Nationalities: x 6 x 2 x 1 x 2 4 5 6 7 8 9 9 10 11 The Gold Fields Integrated Annual Report 2017127 Independent non-executive directors 1. Cheryl Carolus (59) Chairperson 9. Richard Menell (62) Deputy Chairperson BA Law; Bachelor of Education, University of the Western Cape; Honorary Doctorate in Law, University of Cape Town BA (Hons), MA (Natural Sciences Geology), Cambridge; MSc (Mineral Exploration and Management), Stanford University, California Appointed to the Board: Director 2009, Chairperson 2013 Experience and expertise: Governance and compliance, social development, training and development, people management Appointed to the Board: 2008, Deputy Chairperson 2015, Lead Independent Director 2017 Experience and expertise: Executive management, geology, mining 11. Terence Goodlace (58) Non-executive Director 8. Donald Ncube (70) Non-executive Director 6. Alhassan Andani (56) Non-executive Director MBA (Business Administration), University of Wales; BCom, University of South Africa; NHDip (Metalliferous Mining), Witwatersrand Technikon; MDP, University of Cape Town BA (Economics and Political Science), Fort Hare University; Postgraduate Diploma in Labour Relations Strathclyde University, Graduate MSc (Manpower Studies), University of Manchester Diploma in Financial Management; Honorary Doctorate in Commerce, University of the Transkei BSc (Agriculture), University of Ghana; MA (Banking and Finance), Finafrica Institute in Italy Appointed to the Board: 2016 Appointed to the Board: 2006 Appointed to the Board: 2016 Experience and expertise: Mining, capital projects, commercial and operational management, risk management, energy management, strategy, mineral resource management 7. Steven Reid (62) Non-executive Director BSc (Mineral Engineering), South Australian Institute of Technology; MBA, Trium Global Executive, ICD.P, Institute of Corporate Directors Experience and expertise: Finance, governance, social development, labour relations, people management Experience and expertise: Finance, auditing, business development, risk management 5. Peter Bacchus (48) Non-executive Director MA (Economics), Cambridge University 10. Carmen Letton (52) Non-executive Director PhD (Mineral Economics, University of Queensland; Bachelor Mining Engineering, WASM. Appointed to the Board: 2016 Appointed to the Board: 2016 Appointed to the Board: 2017 Experience and expertise: Mining engineering, risk management, compensation management Experience and expertise: Investment banking, finance, mergers and acquisitions Experience and expertise: Mining engineering, corporate governance, risk management, corporate strategy 4. Yunus Suleman (60) Non-executive Director BCom, University of KwaZulu-Natal (formerly Durban-Westville); BCompt (Hons), University of South Africa; CA(SA) Appointed to the Board: 2016 Experience and expertise: Auditing, financial accountancy and governance Executive directors 2. Nick Holland (59) Chief Executive Officer (CEO) 3. Paul Schmidt (50) Chief Financial Officer (CFO) BCom; BAcc, University of the Witwatersrand; CA(SA) BCom, University of the Witwatersrand; BCompt (Hons), University of South Africa; CA(SA) Appointed to the Board: Executive director, 1998; CEO, 2008 Experience and expertise: Finance, mining, management, corporate development, strategy Appointed to the Board: 2009 Experience and expertise: Finance, mining, management The Gold Fields Integrated Annual Report 2017Licence and reputationSUMMARISED CORPORATE GOVERNANCE continued 128 Board and Board sub-committees This reflects current membership for 1 January 2018. NOMINATING AND GOVERNANCE COMMITTEE Meets four times per year Chairperson: Cheryl Carolus Prepares and recommends governance principles applicable to the Group. Keeps abreast of best corporate governance practices. Evaluates the effectiveness and qualifications of the Board and its committees. Responsible for directors’ succession planning. Develops and recommends to the Board criteria for the selection of directors and senior executives. Members: Don Ncube and Steven Reid 1 7 2 6 BOARD Meets four times per year Chairperson: Cheryl Carolus The Board of Directors is the highest governing authority of the Group and takes ultimate responsibility for the Company’s adherence to sound and ethical corporate governance. It sets the Company’s strategy and sees to it that all business decisions and judgements are made with reasonable care, skill and diligence. 5 4 REMUNERATION COMMITTEE Meets four times per year Chairperson: Steven Reid Determines and monitors the remuneration and contractual terms of the Executive, Directors and Group Exco members, and evaluates their individual performances to ensure fair remuneration. Members: Cheryl Carolus, Don Ncube, Alhassan Andani and Peter Bacchus 3 SOCIAL, ETHICS AND TRANSFORMATION COMMITTEE Meets four times per year Chairperson: Don Ncube Develops, implements and monitors policy regarding anti-corruption and employment equity policies, monitors all executive actions regarding the Group’s standing as a good corporate citizen, monitors the Group’s Code of Ethics, and investigate, resolve and review any matters which may be in violation of the Code. Members: Cheryl Carolus, Rick Menell, Alhassan Andani, Carmen Letton, Yunus Suleman and Nick Holland RISK COMMITTEE Meets twice per year Chairperson: Peter Bacchus Evaluates risk assessments and ensures effective risk management policies are in place. Reviews insurance and other risk transfer arrangements, ensuring appropriate coverage is in place. Reviews the business contingency planning process within the Group. Members: Terence Goodlace, Carmen Letton and Yunus Suleman CAPITAL PROJECTS COMMITTEE Meets four times per year Chairperson: Rick Menell Plans, implements and monitors new capital expenditure projects, evaluating on completion and reporting findings to the Board. Members: Peter Bacchus, Terence Goodlace, Yunus Suleman, Steven Reid and Carmen Letton AUDIT COMMITTEE Meets six times per year Chairperson: Yunus Suleman Appoints the independent auditor and oversees the auditing process. Ensures legal and regulatory compliance including the effective implementation of the Code of Conduct. Ensures the integrity, accuracy and adequacy of accounting records. Members: Rick Menell, Don Ncube, Alhassan Andani and Peter Bacchus SAFETY, HEALTH AND SUSTAINABILITY COMMITTEE Meets four times per year Chairperson: Terence Goodlace Compliance with relevant laws, regulations and external standards, recommends and reviews policy relating to safety, health and sustainable development, monitors key indicators relating to accidents and incidents and evaluates the Group’s conformance with the principles of the International Council on Mining and Metals and the principles of the Global Compact. Members: Cheryl Carolus, Rick Menell, Steven Reid, Carmen Letton and Yunus Suleman 8 CORPORATE STRUCTURE/ INVESTMENT AD HOC COMMITTEE Chairperson Peter Bacchus Was established to make recommendations to the Board on continually reviewing and optimising the Group corporate structure. Members: Alhassan Andani and Yunus Suleman The Gold Fields Integrated Annual Report 2017129 GOVERNANCE AND COMPLIANCE STRUCTURES HOW OUR GOVERNANCE STRUCTURES ADD VALUE Gold Fields views governance as integral to doing business – it includes both structures to ensure effective control as well as an ethical consciousness that drives a culture of integrity and transparent reporting to stakeholders. This builds trust, strengthens our reputation and ultimately drives value creation. Our various governance structures, ensure good corporate governance is entrenched at an institutional, structural and operational level. Each one adds value to the business as outlined in the graphic. GOVERNANCE STRUCTURES ROLE VALUE ADD d r a o b d n a d r a o B s e e t t i m m o c e v i t u c e x E e e t t i m m o c Our independent non-executive Board, together with the two executive directors governs, directs and has effective control over the Company The Executive Committee manages the day-to-day running of the business in line with the tone of institutional good governance established by the Board t c u d n o c f o e d o C To inform ethical decision-making in all aspects of the business and in all dealings with stakeholders d n a l a g e L e c n a i l p m o c s e m m a r g o r p r u O s t n e m t i m m o c Assesses the legal risks facing the Company and mitigates these by ensuring effective policies, procedures and controls are in place We are committed to and guided by: • The legislation and regulations of the countries in which we operate • The requirements of the stock exchanges on which we are listed • The UN Guiding Principles on Business and Human Rights • The ICMM 10 Principles on Sustainable Development • The 10 Principles of the UN Global Compact • King IV Report on Corporate Governance • UN Convention Against Corruption • OECD Convention on Combating Bribery • Extractive Industry Transparency Initiative • World Gold Council – Conflict Free Gold Standard • Sets the tone from the top for the Company through ethical and effective leadership • Determines the road map to value creation, through setting and steering the strategic direction of the Company • Approves clear and effective policies and planning processes • Ensures responsible management of environmental impact • Ensures fair, transparent and ethical treatment of employees and other stakeholders, including members of our host communities • Ensures prudent and responsible allocation of capital • Ensuring management of key risks facing the organisation • Implements appropriate remuneration policies that ensure fair, transparent remuneration, which supports sustainable value creation through the achievement of strategic objectives • The Board delegates to management, through the CEO, the implementation and execution of the approved strategy, through policy and operational plans • Management is made up of competent executives in the key roles with strong teams to implement strategy and carry out appropriate recommendations of the Board • Emphasis on ethical leadership in addition to ethical management within the organisation • Protection of employee and third-party whistle-blowers, promoting an environment for reporting of Code of Conduct transgressions • Safeguarding the business against potential reputational harm and litigation • Transparent and ethical dealings with government and suppliers • Protection of company information • Accurate and transparent reporting • Safeguard against insider trading • Compliance with over 1,500 statutes by the Group in our respective jurisdictions. These are managed through appropriate controls, the effectiveness of which are regularly assessed. • Transparency of government interactions, mitigation of potential risks and conflicts of interest ensures benefits for the organisation, third parties and governments. • Effective regional alignment to corporate policies across the Group • Ensure business is conducted with reputable suppliers, who behave in an ethical way aligned to the commitments in our Code of Conduct and the values of the organisation • Align us to international and local best practice • Underpins commitment to responsible corporate citizenship • Supports the development of an ethical and impactful industry t i d u A k s i r d n a • Internal Audit assesses that the controls in place are working to mitigate potential risks. This takes place in all regions on a quarterly basis and operations are given an audit ranking. Corrective measures are put in place where necessary • External Audit ensures legal regulatory compliance and the integrity, accuracy and adequacy of accounting records. • We conduct quarterly assessments on business risks facing our operations and the Group • Ensures business is aware of key risks, and that effective controls and corrective measures are in place to manage and mitigate these risks • Ensures regulatory compliance, integrity, accuracy and adequacy of accounting records The Gold Fields Integrated Annual Report 2017Licence and reputation SUMMARISED REMUNERATION REPORT 130 This is a summarised version of the Remuneration Committee’s Remuneration Report, the full version of which can be found in the Annual Financial Report on p101 – 134. The Gold Fields remuneration policy is closely aligned to the deliverables as set out in our Group strategy so that the remuneration and rewards offered to employees drive the delivery of our strategic objectives, and thus the interests of shareholders. The committee has been mandated by the Gold Fields Board to oversee all aspects of remuneration in a fair, transparent and responsible way, and to ensure feedback to the Board on all decisions taken by the committee. During 2017, the committee complied with all relevant regulatory and legal requirements as they relate to remuneration of employees in all our jurisdictions. Furthermore during 2017 the King IV Report on Corporate Governance (King IV) was released in South Africa and specific focus has been placed on Principle 14 that relates to remuneration. In particular, it emphasises that remuneration practices should be equitable, responsible and transparent, linked to the company strategy and the result should be continued stakeholder value creation. We strive to ensure that our remuneration policy and practices meet the provisions of King IV. As discussed in our full Remuneration Report, our general pay structure comprises a combination of cash, benefits and short- and long-term incentives designed to ensure the delivery of our strategy. We review the terms of reference of the committee to ensure it aligns with regulatory requirements and best practice. The committee has worked closely with management and our external advisors to improve on relevant best practice. We believe the work done during the year in this regard has been positive, helping us to meet our objectives and, importantly, align our interests with those of our stakeholders. Gold Fields’ remuneration practices We do: Provide pay for performance: • 75% of CEO’s total remuneration is pay-at-risk • A significant percentage of the CEO’s short-term incentive is based on corporate performance • The CEO’s long-term incentive is entirely performance-based through performance shares • Performance share awards are earned based on absolute and relative total shareholder return (TSR) and free cash-flow margin (FCFM) • Threshold (partial) performance share payouts require relative TSR performance at least at the median when compared to the performance comparator group and absolute TSR to exceed the cost of equity Have a clawback policy Have executive director share ownership guidelines through the executive minimum shareholding plan Require a double-trigger for executive severance upon a change of control Promote retention with equity awards that vest over three years Have an independent Remuneration Committee, with all members being independent directors Retain an independent remuneration consultant whose primary purpose is to advise the Remuneration Committee Conduct annual advisory votes on our remuneration policy and implementation report, as they appear in the Remuneration Report We do not: Reprice ‘underwater’ share options Pay dividends on unearned performance shares Provide guaranteed bonuses Grant share awards to non-executive directors The Gold Fields Integrated Annual Report 2017131 • Motivate and reinforce individual, team and business performance in the short, medium and long term • Promote an environment that embeds an ethical culture centred on the Company values • Encourage remuneration incentives that attract and retain motivated, high-calibre executives and senior managers • Ensure that the Company’s executive remuneration policy encourages, reinforces and rewards the delivery of sustainable shareholder value Aligned with these fundamentals the Committee, together with the Executive Committee, continuously considers ways to improve alignment between remuneration and our Group strategy and the interest of our stakeholders. This year we introduced a clawback policy, reviewed and aligned the minimum shareholding policy and evolved the long-term incentive plan to incentivise improved performance at regional level among senior management. In doing so, we reassessed the objectives and measures that drive group, regional and individual performance and in particular focused on four key strategic areas in order to maximise total shareholder returns sustainably. These four strategic focus areas are: i) protect our licence and enhance reputation; ii) capital discipline through managing our balance sheet and maximising capital returns; iii) safe operational delivery ensuring sustainable cash flows; and iv) improve the quality of our portfolio. We believe that we have achieved this through the introduction of the new cash- settled, long-term incentive plan, through which eligible senior management level employees will receive awards going forward. Over the last few years the committee, together with management, have engaged with our large institutional investors on numerous occasions to discuss the remuneration policy, with particular focus on transparent disclosure that highlights fair and responsible remuneration practices. What we have focused on over the year: • Annual long-term incentive revision for implementation during 2018 • Peer survey for executive remuneration • Finalised executive remuneration for 2017 • Set bonus targets for 2017 • PwC appointed independent advisor to the committee • Final approval for the minimum shareholding requirement policy • Approved the implementation of a clawback policy • Awarded long-term incentives to eligible management-level employees • Approval of executive appointments • Adoption of King IV remuneration principles • Approved the Remuneration Committee charter The fundamental principles of our remuneration policy remain unchanged, namely that the policy should: • Provide competitive rewards to encourage ownership in the business by employees, as well as setting stretched performance targets for the delivery of reward- based, variable, short-term and long-term incentive plans • Provide focused alignment to the corporate strategy through cascading scorecards to different levels of the organisation. The graphic on p134 illustrates the link between strategy, deliverables and pay-for-performance approach Performance We conduct annual benchmarking to compare levels of pay at the market median in industry-related companies of comparable size and complexity, while taking into account affordability, performance and economic conditions. The committee also conducted a comprehensive independent review and analysis of the Group Executive Committee’s remuneration packages, which confirmed that executive compensation was aligned to our Group strategy and that our executives’ remuneration is realistically positioned against executives in comparative peer companies. The committee believes that the remuneration policy was enforced in a way that remunerated employees of Gold Fields fairly, transparently and reasonably for the achievement of the Group strategic objectives set for the 2017 financial year and promoted positive outcomes in the short, medium and long term. We will continue to ensure that fair, equitable and responsible remuneration processes are implemented to drive the achievement of Group strategic objectives and ultimately promote maximum stakeholder value creation. The Gold Fields Integrated Annual Report 2017Licence and reputationSUMMARISED REMUNERATION REPORT continued 132 Executive directors’ and prescribed officers’ remuneration The table of remuneration for the executive directors and prescribed officers on the basis of the total single figure of remuneration (2016 figures have been revised and represented due to adoption of King IV) as prescribed by King IV is disclosed below. As a result of the adoption of the remuneration reporting requirements under King IV the terminology used in the table below has been assigned the following meanings: Reflected – King IV requires the disclosure of a total single figure of remuneration, received and receivable for the reporting period which ties remuneration to the individuals performance for the period. In respect of the cash LTI plan and matching shares the remuneration is reflected given that the company performance conditions have been met during the reporting period. The continued service and/ or continued employment requirements of the cash LTI plan and matching All figures stated in US$'000 EXECUTIVE DIRECTORS Current NJ Holland NJ Holland8 PA Schmidt PA Schmidt PRESCRIBED OFFICERS Current L Rivera9 L Rivera9 A Baku10 A Baku10 R Butcher R Butcher11 NA Chohan12 NA Chohan B Mattison B Mattison T Harmse T Harmse A Nagaser14 A Nagaser S Mathews15 M Preece16 Separated L Samuel17 L Samuel R Weston18 R Weston E Balarezo19 M Diaz20 N Muller13 N Muller Pension fund contri- bution US$ Cash incentive2 US$ Cash LTI plan reflected3 US$ 26.3 40.9 48.2 54.4 — — 180.5 156.4 37.9 27.5 26.3 27.7 26.3 25.5 26.3 29.5 25.3 21.5 21.2 16.6 17.5 24.8 4.5 64.2 — — 6.6 26.4 1,002.2 1,355.2 542.7 648.6 270.4 111.0 719.8 620.2 278.5 323.2 288.3 328.6 369.9 429.7 290.1 345.7 192.0 221.1 326.1 — — 339.9 — 570.7 — 1.2 — 477.0 463.5 500.5 459.0 242.6 — — 463.5 304.2 — — 126.0 88.6 297.0 192.5 252.0 138.6 90.0 — — — — 181.0 216.0 350.4 — — — 23.1 Salary1 US$ 1,186.9 1,030.0 588.6 496.7 626.3 154.5 784.7 746.1 353.0 275.1 342.8 284.0 426.7 362.4 344.7 282.3 228.1 193.9 397.5 338.2 384.3 288.4 102.0 576.4 332.5 136.1 129.4 450.4 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2017 2017 2016 2017 2016 2016 2016 2017 2016 Average exchange rates were US$1=R13.33 for the FY2017 and US$1 = R14.70 for the FY2016. 1 The total US$ amounts paid for 2017, and included in salary, were as follows: NJ Holland US$396,500, P Schmidt US$121,000, B Mattison US$86,000. The total US$ amounts paid for 2016, and included in salary, were as follows: N Holland US$384,333, P Schmidt US$115,833, B Mattison US$70,417. 2 The annual bonus accruals for the year ended 31 December 2016 and 31 December 2017, paid in February 2017 and February 2018 respectively. 3 The value of the 2014 cash LTI plan with a performance period ending on 31 December 2016 is reflected in the 2016 total single figure of remuneration. The value of the 2015 cash LTI plan with a performance period ending on 31 December 2017 is reflected in the 2017 total single figure of remuneration. 4 The 2017 total single figure of remuneration includes the cash equivalent value of matching shares awarded in terms of the MSR policy during 2017. 5 Other includes special bonuses, incidental and severance payments unless otherwise stated. 6 Includes cash Incentive, cash LTI plan and matching shares reflected for the year. 7 The 2017 figure includes the bonus related to the 2016 financial year, paid in February 2017 and the 2014 cash LTI plan vested and settled in March 2017. The 2016 figure includes the bonus related to the 2015 financial year, paid in February 2016 and the 2013 performance shares vested and settled in March 2016. For NJ Holland, the 2017 figure does not include the 2014 cash LTI plan as well as 50% of the 2016 bonus, because he elected to receive restricted shares in lieu of these amounts, and the 2016 figure does not include the 2013 performance shares and 50% of the 2015 bonus because he elected to receive restricted shares in lieu of these amounts. 8 NJ Holland elected prior to the determination of his annual performance bonus for 2016 to receive 50% of his annual performance bonus (US$677,600 = 50%) in restricted shares. He also elected prior to the vesting of the 2014 cash-settled LTI plan award to receive 100% of this amount (US$500,500 = 100%) in restricted shares. The full bonus and cash LTI plan calculated for NJ Holland is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV. Matching shares reflected4 US$ 942.8 157.5 — — 51.9 — — — — — 54.0 — 55.4 — 10.0 — — — — — — — — — — — — 44.8 Total single figure of remune- ration US$ Less: Amounts not yet settled6 US$ Add: Cash value on settlement7 US$ Total cash remune- ration US$ 3,621.7 2,926.6 1,800.0 1,446.3 1,150.0 511.9 2,350.6 2,141.4 669.4 736.5 840.7 731.8 1,176.3 1,010.7 929.9 800.4 536.1 436.8 754.8 354.8 600.7 837.8 374.9 1,569.1 1,976.9 137.3 170.0 979.3 (2,408.5) (1,855.7) (1,159.2) (891.2) (486.7) (111.0) (1,235.2) (924.4) (278.5) (323.2) (468.3) (417.2) (722.3) (622.2) (552.1) (484.3) (282.0) (221.1) (326.1) — — (520.9) (260.8) (921.1) — (1.2) — (500.1) 677.6 618.9 891.2 1,162.3 111.0 — 924.4 726.9 323.2 — 417.2 540.3 622.2 620.2 484.3 422.1 221.1 208.5 — — 520.9 667.2 921.1 1,044.2 425.7 — 500.1 423.5 1,890.8 1,689.8 1,532.0 1,717.4 774.3 400.9 2,039.8 1,943.9 714.1 413.3 789.6 854.9 1,076.2 1,008.7 862.1 738.2 475.2 424.2 428.7 354.8 1,121.6 984.1 1,035.2 1,692.2 2,402.6 136.1 670.1 902.7 Other5 US$ — — 4.0 4.0 253.3 246.4 150.2 314.5 — 110.7 3.3 2.9 1.0 0.6 6.8 4.3 0.7 0.3 10.0 — 198.9 3.7 7.6 7.4 1,644.4 — 34.0 2.4 The Gold Fields Integrated Annual Report 2017133 shares are not considered a factor for including the remuneration in the total single figure of remuneration. Remuneration included may not have legally transferred to the individual and the individual may not yet have the unconditional right to enjoy the benefits therefrom. Settlement - This refers to remuneration that has been included in the total single figure of remuneration in respect of any prior period, but has only been unconditionally transferred to the individual concerned in the current period. Not yet settled - This refers to remuneration that has been included in the total single figure of remuneration in the current period, but has not been unconditionally transferred to the individual concerned in the current period, or where an election has been made by the individual to defer the settlement thereof in fulfilment of their minimum shareholding requirement. Unconditional transfer - Means (excluding any applicable malus or claw back) that the individual now enjoys full right to the remuneration, and it is no longer subject to any further service, employment or other conditions. All figures stated in US$'000 EXECUTIVE DIRECTORS PRESCRIBED OFFICERS Current NJ Holland NJ Holland8 PA Schmidt PA Schmidt Current L Rivera9 L Rivera9 A Baku10 A Baku10 R Butcher R Butcher11 NA Chohan12 NA Chohan B Mattison B Mattison T Harmse T Harmse A Nagaser14 A Nagaser S Mathews15 M Preece16 Separated L Samuel17 L Samuel R Weston18 R Weston E Balarezo19 M Diaz20 N Muller13 N Muller Pension fund contri- bution US$ Cash incentive2 US$ Cash LTI plan reflected3 US$ 26.3 40.9 48.2 54.4 — — 180.5 156.4 37.9 27.5 26.3 27.7 26.3 25.5 26.3 29.5 25.3 21.5 21.2 16.6 17.5 24.8 4.5 64.2 — — 6.6 26.4 1,002.2 1,355.2 542.7 648.6 270.4 111.0 719.8 620.2 278.5 323.2 288.3 328.6 369.9 429.7 290.1 345.7 192.0 221.1 326.1 — — — 339.9 570.7 — 1.2 — 477.0 463.5 500.5 459.0 242.6 463.5 304.2 — — — — 126.0 88.6 297.0 192.5 252.0 138.6 90.0 — — — — 181.0 216.0 350.4 — — — 23.1 Salary1 US$ 1,186.9 1,030.0 588.6 496.7 626.3 154.5 784.7 746.1 353.0 275.1 342.8 284.0 426.7 362.4 344.7 282.3 228.1 193.9 397.5 338.2 384.3 288.4 102.0 576.4 332.5 136.1 129.4 450.4 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2017 2017 2016 2017 2016 2016 2016 2017 2016 Matching shares reflected4 US$ 942.8 — 157.5 — — — 51.9 — — — 54.0 — 55.4 — 10.0 — — — — — — — 44.8 — — — — — Total single figure of remune- ration US$ Less: Amounts not yet settled6 US$ Add: Cash value on settlement7 US$ Total cash remune- ration US$ 3,621.7 2,926.6 1,800.0 1,446.3 1,150.0 511.9 2,350.6 2,141.4 669.4 736.5 840.7 731.8 1,176.3 1,010.7 929.9 800.4 536.1 436.8 754.8 354.8 600.7 837.8 374.9 1,569.1 1,976.9 137.3 170.0 979.3 (2,408.5) (1,855.7) (1,159.2) (891.2) (486.7) (111.0) (1,235.2) (924.4) (278.5) (323.2) (468.3) (417.2) (722.3) (622.2) (552.1) (484.3) (282.0) (221.1) (326.1) — — (520.9) (260.8) (921.1) — (1.2) — (500.1) 677.6 618.9 891.2 1,162.3 111.0 — 924.4 726.9 323.2 — 417.2 540.3 622.2 620.2 484.3 422.1 221.1 208.5 — — 520.9 667.2 921.1 1,044.2 425.7 — 500.1 423.5 1,890.8 1,689.8 1,532.0 1,717.4 774.3 400.9 2,039.8 1,943.9 714.1 413.3 789.6 854.9 1,076.2 1,008.7 862.1 738.2 475.2 424.2 428.7 354.8 1,121.6 984.1 1,035.2 1,692.2 2,402.6 136.1 670.1 902.7 Other5 US$ — — 4.0 4.0 253.3 246.4 150.2 314.5 — 110.7 3.3 2.9 1.0 0.6 6.8 4.3 0.7 0.3 10.0 — 198.9 3.7 7.6 7.4 1,644.4 — 34.0 2.4 Average exchange rates were US$1=R13.33 for the FY2017 and US$1 = R14.70 for the FY2016. 1 The total US$ amounts paid for 2017, and included in salary, were as follows: NJ Holland US$396,500, P Schmidt US$121,000, B Mattison US$86,000. The total US$ amounts paid for 2016, and included in salary, were as follows: N Holland US$384,333, P Schmidt US$115,833, B Mattison US$70,417. 2 The annual bonus accruals for the year ended 31 December 2016 and 31 December 2017, paid in February 2017 and February 2018 respectively. 3 The value of the 2014 cash LTI plan with a performance period ending on 31 December 2016 is reflected in the 2016 total single figure of remuneration. The value of the 2015 cash LTI plan with a performance period ending on 31 December 2017 is reflected in the 2017 total single figure of remuneration. 4 The 2017 total single figure of remuneration includes the cash equivalent value of matching shares awarded in terms of the MSR policy during 2017. 5 Other includes special bonuses, incidental and severance payments unless otherwise stated. 6 Includes cash Incentive, cash LTI plan and matching shares reflected for the year. 7 The 2017 figure includes the bonus related to the 2016 financial year, paid in February 2017 and the 2014 cash LTI plan vested and settled in March 2017. The 2016 figure includes the bonus related to the 2015 financial year, paid in February 2016 and the 2013 performance shares vested and settled in March 2016. For NJ Holland, the 2017 figure does not include the 2014 cash LTI plan as well as 50% of the 2016 bonus, because he elected to receive restricted shares in lieu of these amounts, and the 2016 figure does not include the 2013 performance shares and 50% of the 2015 bonus because he elected to receive restricted shares in lieu of these amounts. 8 NJ Holland elected prior to the determination of his annual performance bonus for 2016 to receive 50% of his annual performance bonus (US$677,600 = 50%) in restricted shares. He also elected prior to the vesting of the 2014 cash-settled LTI plan award to receive 100% of this amount (US$500,500 = 100%) in restricted shares. The full bonus and cash LTI plan calculated for NJ Holland is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV. 9 L Rivera - Appointed on 1 October 2016, other payments for 2016 relates to sign-on and legislated bonuses and 2017 to legislated bonuses. 10 A Baku - Other payments for 2016 relates to leave allowance and final payment of a retention bonus. 2017 relates to leave allowance. 11 R Butcher - Appointed on 8 February 2016 - other payments for 2016 relates to sign-on bonus. 12 NA Chohan elected prior to the determination of his annual performance bonus for 2017 to receive 5% of his annual performance bonus (US$15,004 = 5%) in restricted shares. The full bonus calculated for NA Chohan is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV. 13 N Muller - Resigned 31 March 2017. 14 A Nagaser elected prior to the determination of his annual performance bonus for 2017 to receive 20% of his annual performance bonus (US$38,401 = 20%) in restricted shares. The full bonus calculated for A Nagaser is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV. 15 S Mathews - Appointed on 1 February 2017. 16 M Preece - Appointed on 15 May 2017. 17 L Samuel - Resigned 31 July 2017. Other payments for 2017 include a payment in lieu of notice. 18 R Weston - Retired 28 February 2017. His pro-rated performance shares will be settled on the final vesting date at the end of the three-year performance period. 19 E Balarezo - Terminated employment by mutual agreement during 2016. Other payments for 2016 includes a payment in lieu of notice. 20 M Diaz - Terminated employment by mutual agreement during 2016. The Gold Fields Integrated Annual Report 2017Licence and reputationSUMMARISED REMUNERATION REPORT continued 134 PAY-FOR-PERFORMANCE MODEL OUR STRATEGY Strategic objective: Maximise shareholder return sustainably Strategic aspiration: AIC of US$900/oz by 2020 Annual target: Free cash-flow margin of 15% at US$1,300 gold price Strategic goal ➊ Deliver free cash-flow margin ➋ Safely meet guidance for operations ➌ Safely deliver strategic projects ➍ Manage balance sheet and maximise capital returns ➎ Improve quality of our portfolio ➏ Protect licence to operate and enhance reputation MAKE MONEY SPEND IT WISELY DO IT SUSTAINABLY OUR DELIVERABLES Our deliverables, contained in our balanced scorecards (BSC), are derived from – and directly support the achievement of – our Group strategy. The Group BSC cascades to the regional, operational/departmental and the individual BSCs. Delivery on the items in each BSC supports delivery in the BSC above it – thereby ultimately supporting the achievement of the group strategy Group BSC Regional BSCs Operational/ departmental BSCs Individual BSC OUR REWARDS We are rewarded for the achievement of BSC objectives and the Group strategy. The elements informing each reward are outlined below. See the full Remuneration Report for comprehensive detail. SALARY INCREASE SHORT-TERM INCENTIVE (ANNUAL BONUS) LONG-TERM INCENTIVE (LTIP) Informed by: • Individual BSC performance • Affordability • Economic conditions • Individual BSC performance • Company’s performance conditions: - Safety - Total gold production - AIC per ounce - Development or waste mined Executive level: • Absolute total shareholder return • Relative total shareholder return • Sustainable free cash-flow margin Regional level: • All-in cost reduction • Reserve/Rebase plan at South Deep • Safety engagements and host community job creation The Gold Fields Integrated Annual Report 2017First Party: Internal audit statement Independent assurance statement to the Board of Directors and stakeholders of Gold Fields Limited Key sustainability performance data Administration and corporate information p136 p137 p139 IBC Assurance Internal and external assurance is provided over selected sustainability data contained in the Integrated Annual Report. Samples being smelted in the Assay laboratory at Granny Smith FIRST PARTY: INTERNAL AUDIT STATEMENT 136 Gold Fields Internal Audit (GFIA) is an independent assurance provider to the Gold Fields Audit Committee on the effectiveness of the governance, risk management and control processes within Gold Fields. The internal audit activities performed during the year were identified through a combination of the Gold Fields risk management and combined assurance framework, as well as the risk-based methodology adopted by the Gold Fields Internal Audit function. Internal audit complies with the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing, in the execution of its assurance function. Furthermore, GFIA operates a quality assurance programme that involves performing detailed quality review assessments. Annually, the risk-based annual audit plan is approved by the Audit Committee. The internal audit activities are executed by a team of appropriately 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 has a functional reporting line to the Audit Committee and provides quarterly feedback to the Audit Committee. Based on the work performed by GFIA during the year, the Vice-President and Group Head of Internal Audit has presented the Audit Committee with an assessment on the effectiveness of the Company’s governance, risk management and system of internal control. It is GFIA’s opinion that the governance, risk management and internal control environment are effective within Gold Fields’ business and provide reasonable assurance that the objectives of Gold Fields will be achieved. This GFIA assessment forms one of the basis for the Audit Committee’s recommendation in this regard to the Board. Shyam Jagwanth Vice-President and Group Head of Internal Audit Johannesburg, South Africa 27 March 2018 The Gold Fields Integrated Annual Report 2017137 INDEPENDENT ASSURANCE STATEMENT TO THE BOARD OF DIRECTORS AND STAKEHOLDERS OF GOLD FIELDS LIMITED ERM Southern Africa (Pty) Ltd (ERM) was engaged by Gold Fields to provide assurance in relation to selected sustainability information set out below and presented in Gold Fields’ 2017 Integrated Annual Report for the year ended 31 December 2017 (‘the Report’). Engagement summary Engagement scope (subject matters): 1. Whether the 2017 data, for the period 1 January 2017 to 31 December 2017, for the selected performance indicators listed in Tables 1 and 2 overleaf, are fairly presented, in all material respects. 2. Whether the Directors’ statement in the “About this Report” section of the Report that Gold Fields has complied with the ICMM Sustainable Development Framework, Principles, Position Statements and reporting requirements is, in all material respects, fairly stated. Reporting criteria: For environmental, health and safety and social KPIs: • GRI Standards (‘Core’ in-accordance option) and the GRI’s Mining and Metals Sector Disclosure (2013) • Gold Fields GRI Standards Sustainability Reporting Guideline, V5 10/10/2017 For Mining Charter related KPIs: • Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (BBSEEC) (2002) and related Scorecard (2004) • Amendment to the BBSEEC (2010) and related scorecard (2010) for the South African Mining and Minerals Industry Assurance standard used: ERM CVS’ assurance methodology, based on the International Standard on Assurance Engagements ISAE 3000 (Revised) and ISAE 3410 (for GHG Statements) Assurance level: Reasonable assurance for all Subject Matters Respective responsibilities: Gold Fields is responsible for preparing the Report, including the collection and presentation of the selected sustainability information within it, the design, implementation and maintenance of related internal controls, and for the integrity of its website. ERM’s responsibility is to provide an opinion on the selected information based on the evidence we have obtained and exercising our professional judgement. Our assurance activities We planned and performed our work to obtain all the information and explanations that we believe were necessary to reduce the risk of material misstatement to low and therefore provide a basis for our assurance opinion. A multi-disciplinary team of sustainability and assurance specialists performed the assurance activities, including: • A review of external media reporting relating to Gold Fields, peer company annual reports and industry standards to identify relevant sustainability issues in the reporting period. • Interviews with relevant corporate level staff to understand Gold Fields’ sustainability strategy, policies and management systems, including stakeholder engagement and materiality assessment. • Interviews with a selection of staff and management, including senior executives, to gain an understanding of: – The status of implementation of the ICMM sustainable development Principles in Gold Fields’ strategy and policies; – Gold Fields’ identification and management of sustainable development risks and opportunities as determined through its review of the business and the views and expectations of its stakeholders. – Observation of an external stakeholder engagement meeting on material issues facing the business. • Reviewing policies and procedures and assessing alignment with ICMM’s 10 Sustainable Development Principles and other mandatory requirements set out in the ICMM’s Position Statements in effect as at 31 December 2017. • Testing the processes and systems, including internal controls, used to generate, consolidate and report the selected sustainability information. • A review of the suitability of the internal reporting guidelines, including conversion factors used. • Physical visits to verify source data and other evidence at the following sites: – South Deep, South Africa – Tarkwa, Ghana – Damang, Ghana – Cerro Corona, Peru – Agnew, Australia (verification visit) • Virtual reviews to verify source data for the following sites: – Agnew, Australia – Granny Smith, Australia – St Ives, Australia The Gold Fields Integrated Annual Report 2017Assurance138 INDEPENDENT ASSURANCE STATEMENT TO THE BOARD OF DIRECTORS AND STAKEHOLDERS OF GOLD FIELDS LIMITED continued • An analytical review of the year-end data submitted by the sites listed above, and testing of the accuracy and completeness of the consolidated 2017 Group data for the selected KPIs. • A review of the presentation of information relevant to the scope of our work in the Report to ensure consistency with our findings. Our assurance opinion In our opinion: • The selected sustainability performance information set out in Tables 1 and 2 for the year ended 31 December 2017 is prepared, in all material respects, in accordance with the Gold Fields reporting criteria; and • The Directors’ statement in the “About this Report” section of the Report that Gold Fields has complied with the ICMM Sustainable Development Framework, Principles, Position Statements and reporting requirements is, in all material respects, fairly stated. Our observations We have provided Gold Fields with a separate detailed management report. Without affecting the opinions presented above, we have the following key observation: • Due to weaknesses in documentation and in the control environment relating to safety performance data at the South Deep and Tarkwa operations, we undertook additional procedures to verify the categorisation of safety incidents at these sites. We recommend giving urgent attention to addressing these deficiencies in order to reduce the risk of material misstatement in this subject matter as well as audit effort. The limitations of our engagement The reliability of the assured data is subject to inherent uncertainties given the methods for determining, calculating or estimating the underlying information. It is important to understand our assurance opinions in this context. Our independent assurance statement provides no assurance on the maintenance and integrity of the Gold Fields’ website, including controls used to achieve this, and in particular, whether any changes may have occurred to the information since it was first published. Donald Gibson Partner Jennifer Iansen-Rogers Review Partner, ERM CVS, London 27 March 2018 ERM Southern Africa (Pty) Ltd, Johannesburg, South Africa www.erm.com Email: donald.gibson@erm.com ERM Southern Africa (Pty) Ltd and ERM Certification and Verification Services are members of the ERM Group. Our processes are designed and implemented to ensure that the work we undertake with clients is free from bias and conflict of interest. The ERM and ERM CVS staff that have undertaken work on this assurance engagement provide no consultancy related services to Gold Fields in any respect related to the subject matter assured. The Gold Fields Integrated Annual Report 2017139 KEY SUSTAINABILITY PERFORMANCE DATA Table 1. Data for selected sustainability performance indicators for the 2017 reporting year presented for reasonable assurance in accordance with Subject Matter 4 of the International Council on Mining and Metals’ (ICMM) Sustainable Development Framework: Assurance Procedure, and prepared in accordance with the internal Gold Fields’ GRI Standards Sustainability Reporting Guideline V5 10/10/2017 (available on Gold Fields’ website), and the GRI Sustainability Reporting Standards. Parameter Environment Unit Reported 2017 data Total CO2 equivalent emissions, Scope 1‐3 Electricity purchased Diesel Tonnes MWh KL Total energy consumed/total tonnes mined GJ/total tonnes mined 1,959,035 1,366,086 188,140 0.058 (12,178,119.73 GJ/ 208,520,018.06 tonnes) Total energy consumed/ounces of gold produced GJ/ounces of gold produced 5.46 (12,178,119.73 GJ/ 2,232,443.05 ounces) Total water withdrawal Total water recycled/re‐used per annum Water intensity ML ML 32,985 43,289 KL withdrawn/ounces of gold produced 14.78 (32,985,196.00 KL/ 2,232,443.05 ounces) Number of environmental incidents ‐ Level 3 and above Number of incidents 2 incidents Health Number of cases of Silicosis reported Number of cases Number of cases of Noise Induced Hearing Loss reported Number of cases Cardio Respiratory (Tuberculosis) Number new cases reported 11 cases 5 cases 21 cases Number of cases of Malaria tested positive per annum Number of positive cases 409 positive cases Number of South African and West African employees in the HAART programme (cumulative) Percentage of South African and West African workforce on the voluntary counselling and testing (VCT) programme Number of employees 370 employees Percentage of workforce 40.01% Safety Total Recordable Injury Frequency Rate (TRIFR) Number of TRIs/manhours 2.42 (138 TRIs/57,099,862 Number of fatalities Social Total socio-economic development (SED) spend Percentage of host community employment Percentage of host community procurement spend Total value created and distributed Number US$ % % US$ manhours) 3 $17,486 797.51 40.42% 44.62% $2,850,000,000.00 The Gold Fields Integrated Annual Report 2017AssuranceKEY SUSTAINABILITY PERFORMANCE DATA continued 140 Table 2. Selected sustainability performance indicators for the 2017 reporting year presented for reasonable assurance in accordance with Subject Matter 4 of the ICMM’s Sustainable Development Framework: Assurance Procedure, and prepared in accordance with the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (BBSEEC) (2002) and related Scorecard (2004); the Amendment to the BBSEEC (2010) and related scorecard (2010) for the South African Mining and Minerals Industry. Parameter Mining Charter Housing and living conditions Unit Reported 2017 data Occupancy rate of one person per room Ratio (employee:hostel room) 0.91 employees to hostel room ratio Percentage conversion of hostels into family units Percentage (%) 100% Procurement and enterprise development Procurement spend from BEE1 entity Total procurement spend on BEE1 entities Annual spend on procurement from multi-national suppliers: Contribution set aside/allocated by the mining right holders Employment equity HDSAs2 in management Capital goods (%) Services (%) Consumable goods (%) Total BEE procurement spend (R) 80% 83% 88% R2,105,058,754.24 Total procurement spend (R) R2,501,786,063.86 Number of BEE entities with valid BEE credentials (n) 416 entities Percentage (%) 0.86% Top (Board) (%) Senior (Exco) (%) Middle (%) Junior (%) Core skills (%) 33% 88% 58% 49% 73% 10% Human resource development (HRD) HRD expenditure as a percentage of total annual payroll (excluding mandatory skills development levy) Percentage (%) Mine community development Total LED3 spend for the year and LED spend per SLP4 project in the current year Up to date implementation of approved community projects Total LED spend (R) R6 296 197.27 Percentage (%) implementation of (each) project 90% Sustainable development and growth Approved EMP5 implementation Percentage (%) Tripartite action plan on health and safety implementation Percentage (%) Percentage of samples in South African facilities Percentage (%) 100% 86% 100% 1 Black Economic Empowerment 2 Historically Disadvantaged South African 3 Local Economic Development 4 Social and Labour Plan 5 Environmental Management Programme The Gold Fields Integrated Annual Report 2017ADMINISTRATION AND CORPORATE INFORMATION Corporate Secretary Lucy Mokoka Tel: +27 11 562 9719 Fax: +27 11 562 9829 e-mail: lucy.mokoka@goldfields.com Registered office Johannesburg Gold Fields Limited 150 Helen Road Sandown Sandton 2196 Postnet Suite 252 Private Bag X30500 Houghton 2041 Tel: +27 11 562 9700 Fax: +27 11 562 9829 Office of the United Kingdom secretaries London St James’s Corporate Services Limited Suite 31, Second Floor 107 Cheapside London EC2V 6DN United Kingdom Tel: +44 20 7796 8644 Fax: +44 20 7796 8645 e-mail: general@corpserv.co.uk American depository receipts transfer agent Shareholder correspondence should be mailed to: BNY Mellon Shareowner Services PO Box 30170 College Station, TX 77842-3170 Overnight correspondence should be sent to: BNY Mellon Shareowner Services 211 Quality Circle, Suite 210 College Station, TX 77845 e-mail: shrrelations@cpushareownerservices.com Phone numbers Tel: 888 269 2377 Domestic Tel: 201 680 6825 Foreign Sponsor J.P. Morgan Equities South Africa (Pty) Ltd Gold Fields Limited Incorporated in the Republic of South Africa Registration number 1968/004880/06 Share code: GFI Issuer code: GOGOF ISIN – ZAE 000018123 Investor enquiries Avishkar Nagaser Tel: +27 11 562 9775 Mobile: +27 82 312 8692 e-mail: avishkar.nagaser@goldfields.com Thomas Mengel Tel: +27 11 562 9849 Mobile: +27 72 493 5170 e-mail: thomas.mengel@goldfields.com Media enquiries Sven Lunsche Tel: +27 11 562 9763 Mobile: +27 83 260 9279 e-mail: sven.lunsche@goldfields.com Transfer secretaries South Africa Computershare Investor Services (Proprietary) Limited Rosebank Towers 15 Biermann Avenue Rosebank Johannesburg 2196 PO Box 61051 Marshalltown 2107 Tel: +27 11 370 5000 Fax: +27 11 688 5248 United Kingdom Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU England Tel: 0871 664 0300 Calls cost 12p per minute plus your phone company’s access charge. If you are outside the United Kingdom, please call +44 371 664 0300. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9:00 – 17:30. Monday to Friday excluding public holidays in England and Wales. e-mail: ssd@capita.co.uk Website www.goldfields.com Listings JSE / NYSE / GFI SIX: GOLI CA Carolus° (Chairperson) RP Menell° (Deputy Chairperson) NJ Holland*• (Chief Executive Officer) PA Schmidt• (Chief Financial Officer) A Andani#° PJ Bacchus° TP Goodlace° C Lettonˆ° DMJ Ncube° SP Reidˆ° YGH Suleman° ˆ Australian * British # Ghanaian ° Independent Director • Non-independent Director G o l d F i e l d s I n t e g r a t e d A n n u a l R e p o r t f o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 7 www.goldfields.com

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