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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 business OUR 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$m)
20
)
6
1
1
)
0
8
(
2
1
)
3
4
(
South Deep ll Johannesburg
Contribution to
Group production
The South Deep mine, which is still in a ramp-up phase,
is the only operating asset in the South Africa region
1 TRIFR – Total Recordable Injury Frequency Rate Injuries per 1 million hours worked, including employees and contractors
2 Net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments, excluding growth capital
3 The statistics for Australia include Darlot up to the date of its sale on 2 October 2017
4 Group net cash-flow = cash-flow from operating activities less net capital expenditure and environmental payments, including growth capital
The Gold Fields Integrated Annual Report 2017 3
Projects
Status
l Gruyere (Australia)
l Far Southeast (Philippines)
l Salares Norte (Chile)
l Arctic Platinum project (Finland)
In development
Scoping study
Feasibility
Sold
Group net cash-flow4
(US$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 business OUR 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 2017 5
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 business OUR 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 2017 7
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 business RISKS 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 2017 11
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 business VALUE 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 2017 13
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 business Drilling 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 2017 17
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 2017Leadership VISION 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 2017 19
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 2017Leadership 20
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 2017 21
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$2.51bn in 2016.
Supporting our integrated
management approach is robust
and effective corporate governance
throughout the Company. During
2017, Gold Fields implemented its
revised Code of Conduct, which
forms the ethical foundation of the
business and informs how we
conduct ourselves and interact
with all stakeholders. The Board
of Directors has also overseen
the implementation of the
recommendations of the King IV
Report on Corporate Governance
and approved a new diversity policy
for our workforce. This will drive
race and gender diversity at all
operations, which is critical as
we believe that the wide array of
perspectives that results from such
diversity promotes innovation and
drives business success.
In the second section of this report,
we unpack the Company’s strategy
(p32 – 36). The decision that faced
Gold Fields’ management in 2017
was to balance distributing the value
we generated to stakeholders with
reinvesting into our assets to ensure
that our portfolio of mines continues
to generate cash sustainably into
the foreseeable future. To date we
have been successful and I have
confidence that our management
teams will once again meet this
challenge to the long-term benefit of
all our stakeholders.
The Gold Fields Integrated Annual Report 2017Leadership CEO REPORT continued
22
Introduction and overview continued
Performance highlights (Group, including discontinued operations)
Attributable production
All-in sustaining costs (AISC)3
All-in costs (AIC)3
Net cash-flow1
Free cash-flow (FCF) margin3
Net debt
Dividend declared
Fatalities
Total Recordable Injury Frequency Rate (TRIFR)
Total value distribution
Energy usage2
Water usage
CO2 emissions
Host community procurement (% of total)
Host community employment (% of total)
Mine closure liabilities
Moz
US$/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 2017 23
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 2017Leadership 24
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 2017 25
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 2017Leadership 26
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 2017Leadership 28
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 2017 29
• 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 2017Leadership 30
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 2017 31
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 2017Leadership 32
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 2017 33
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 2017Leadership CEO 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 2017 35
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 2017Leadership 36
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 2017 37
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 2017Leadership 38
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 2017 39
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 2017Leadership CEO 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 2017 41
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 2017Leadership Machine 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$206m)
The Gold Fields Integrated Annual Report 2017 45
OPERATIONAL PERFORMANCE
Regional performance
Americas region
Production overview
Gold-only production
Copper production
Gold-equivalent production
AIC/AISC1
AIC/AISC eq-oz
2018
Guidance
2017
Actual
2017
Guidance
2016
Actual
koz
kt
koz
US$/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$810/oz
Tailings storage facility at Cerro Corona
The Gold Fields Integrated Annual Report 2017Safe operational delivery OPERATIONAL PERFORMANCE continued
46
Australia region
Production
overview
St Ives
Agnew
Granny Smith
Darlot1
Region
¹ Darlot Q1 – Q3 2017
2018 Guidance
Prod
(koz)
AISC/AIC
(A$/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 2017 47
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 delivery OPERATIONAL 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$1,400/oz)
Drilling and installing support at South Deep
The Gold Fields Integrated Annual Report 2017 49
West Africa region
Production
overview
Tarkwa
Damang
Region
2018 Guidance
Prod
(koz)
AIC
(US$/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 delivery 50
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 2017 51
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 delivery SAFETY 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 2017 53
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 delivery HEALTH 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 2017 55
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 delivery FIT-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 2017 57
• 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 delivery FIT-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 2017 59
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 delivery FIT-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 2017 61
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 2017 63
• 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$25/oz), and avoided 81kt
CO2-eq in carbon emissions.
The Gold Fields Integrated Annual Report 2017Safe operational delivery OUR ENERGY AND CLIMATE CHANGE MANAGEMENT JOURNEY
64
Why does energy and
climate resilience matter?
Our response
– strategic programmes
Group energy spend
(US$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 2017 65
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
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h 25MW Aggreko gas turbines commissioned in 2016
and upgraded to higher efficiency turbines in 2017:
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• 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 2017 67
I&T Strategy – New operating platform
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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
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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 2017 71
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 2017 73
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 performance FINANCIAL 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 2017 75
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 performance CAPITAL 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$444m in 2016.
Aerial view of Salares Norte showing access to drill sites
The Gold Fields Integrated Annual Report 2017 77
royalty portfolio with Toronto-listed
Maverix Metals in exchange for a
32% interest. A summary of our
investments is in the table below.
While the international portfolio had
another good year, the first year of
the rebase plan at South Deep
proved challenging. But despite the
slow start, the integrity of the rebase
plan remains intact and delivery on
the plan is a key focus area where
management believes it can improve
investor confidence. Unlocking the
intrinsic value of the asset, which
contains the world’s second largest
undeveloped gold resource, is an
important element of the long-term
strategy of the Company.
While many of the initiatives to build
trust with our investors have a
financial and operational focus,
sustainability is entrenched
throughout our business. This
commitment is evident in the
recognitions received. Gold Fields
has consistently been ranked
among the top five mining
companies on the Dow Jones
Sustainability Index since it first
entered the index around six years
ago, illustrating our commitment to
sound environmental, social and
governance principles.
Shareholding
Value
(US$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$40m.
In 2016 the Company injected its
Gold Fields’ material investments
Investment
Cardinal Resources
Gold Road Resources
Maverix Metals
Red 5
Hummingbird Resources
Rusoro Mining
Total value
1 Partially diluted as at end-December 2017
The Gold Fields Integrated Annual Report 2017Capital discipline and financial performance Decent Work
and Economic
Growth
Industry,
Innovation
and
Infrastructure
Key measurements – Portfolio management
2017
Status
2016
2015
2014
2013
Attributable Gold Mineral Resources (Moz)
Attributable Gold Mineral Reserves (Moz)
Attributable Copper Mineral Resources (Mlb)
Attributable Copper Mineral Reserves (Mlb)
Near mine exploration (US$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 2017 81
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 management MANAGING 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 2017 83
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 2017 85
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 management LIFE 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 2017 Damang
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 management MINERAL 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 2017 89
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 management MINERAL 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 2017 91
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$2.8/lb Cu. The metallurgical recovery rate (Au = 69% and Cu = 87%), has not
been applied to the conversion. Calculation: CuMlbs*Cu Price (767*2.8)/ Au price (1,200) = 1.790 Au equivalent Moz
The Gold Fields Integrated Annual Report 2017Portfolio management Pupils at one of our sponsored schools in Damang
Good Health
and Wellbeing
Quality
Education
Clean Water
and
Sanitation
Affordable
and Clean
Energy
Decent Work
and Economic
Growth
Industry,
Innovation
and
Infrastructure
Sustainable
Cities and
Communities
Responsible
Consumption
and Production
Climate
Action
Life on
Land
Partnerships
for the Goals
Key measurements – Licence and reputation
2017
Status
2016
2015
2014
2013
Total value distribution (US$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 2017 95
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 reputation ENVIRONMENTAL 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 2017 99
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 reputation ENVIRONMENTAL 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 2017 101
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 reputation ENVIRONMENTAL 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 2017 Waste 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 reputation ENVIRONMENTAL 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 2017 105
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 reputation STAKEHOLDER 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 2017 107
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 reputation STAKEHOLDER 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 2017 109
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 reputation STAKEHOLDER 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 2017 111
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 reputation STAKEHOLDER 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 2017 HUMAN 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 reputation COMMUNITY 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 2017 115
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 reputation COMMUNITY 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 2017 117
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 reputation COMMUNITY 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 2017 119
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 reputation COMMUNITY 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 2017 121
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 reputation SOUTH 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 2017 125
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 reputation SUMMARISED 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 2017 127
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 reputation SUMMARISED 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 2017 129
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 2017 131
• 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 reputation SUMMARISED 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 2017 133
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 reputation SUMMARISED 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 2017 First 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 2017 137
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 2017Assurance 138
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 2017 139
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 2017Assurance KEY 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 2017 ADMINISTRATION 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
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www.goldfields.com