20-F 1 d187841d20f.htm 20-F 20-F
Table of Contents

As filed with the Securities and Exchange Commission on 31 March 2021

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 20-F

 

(Mark One)

 

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended 31 December 2020

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

or

 

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from              to             

Commission file number: 1-31318

 

 

Gold Fields Limited

(Exact name of registrant as specified in its charter)

 

 

Republic of South Africa

(Jurisdiction of incorporation or organisation)

150 Helen Road

Sandown, Sandton, 2196

South Africa

011-27-11-562-9700

(Address of principal executive offices)

with a copy to:

Taryn L. Harmse

Executive Vice-President: Group General Counsel

Tel: 011-27-11-562-9724

Fax: 011-27-86-720-2704

Taryn.Harmse@goldfields.com

150 Helen Road

Sandown, Sandton, 2196

South Africa

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

and

Michael Z. Bienenfeld

Igor Rogovoy

Linklaters LLP

Tel: 011-44-20-7456-2000

Fax: 011-44-20-7456-2222

One Silk Street

London EC2Y 8HQ

United Kingdom

Securities registered or to be registered pursuant to Section 12(b) of the Act

 

Title of Each Class

 

Trading Symbol

 

Name of Each Exchange on Which Registered

American Depositary Shares, each representing one ordinary share
Ordinary shares of no par value each
  GFI  

 New York Stock Exchange    

New York Stock Exchange*

 

*

Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or

common stock as of the close of the period covered by the Annual Report

883,333,518 ordinary shares of no par value

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:     Yes   ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.     ☐  Yes    No  ☒

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months

(or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☒                 Accelerated filer ☐                 Non-accelerated filer  ☐                Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐                International Financial Reporting Standards as issued by the International Accounting Standards Board   ☒    Other   ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:    Item  17  ☐     Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes   ☐     No  ☐

 

 

 

 


Table of Contents

Gold Fields’ Operations

 

LOGO


Table of Contents

FORM 20-F CROSS REFERENCE GUIDE

 

Item

  

Form 20-F Caption

  

Location in this document

  

Page

1    Identity of directors, senior management and advisers    NA   
2    Offer statistics and expected timetable    NA   
3    Key information      
  

(a)   Selected financial data

   Further Information—Key Information—Selected Historical Consolidated Financial Data    1-4
  

(b)   Capitalisation and indebtedness

   NA   
  

(c)   Reasons for the offer and use of proceeds

   NA   
  

(d)   Risk factors

   Further Information—Risk Factors    5-42
4    Information on the Company      
  

(a)   History and development of the Company

   Presentation of Financial Information    ix-x
      Further Information—Additional Information on the Company—Organisational Structure    43-44
      Annual Financial Report—Accounting Policies    AFR 135-157
      Integrated Annual Report—Vision of the Chairperson    IAR 10-11
      Further Information—Additional Information on the Company—Memorandum of Incorporation—General    123
      Integrated Annual Report—Administration and Corporate Information    IAR 112
      Annual Financial Report—Directors’ Report—Significant Announcements in 2020    AFR 22-23
      Annual Financial Report—Management’s Discussion and Analysis of Financial Statements—Capital Expenditures    AFR 78-79
      Further Information—Description of Mining Business—Capital Expenditure    81-82
      Integrated Annual Report—Chief Executive Officer’s Report    IAR 12-18
      Further Information—Additional Information—Documents on Display    137-138
  

(b)   Business overview

   Gold Fields’ Operations    Back of cover
      Further Information—Additional Information on the Company—Gold Fields’ Mining Operations    44-54
      Further Information—Reserves of Gold Fields as at 31 December 2020    73-79

 

i


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

      Integrated Annual Report—How We Operate    IAR 31-49
      Integrated Annual Report—Chief Executive Officer’s Report    IAR 12-18
      Integrated Annual Report—Creating a Global, Sustainable Portfolio    IAR 62-67
      Integrated Annual Report—Overview of Strategic Pillars    IAR 19-25
      Integrated Annual Report—Environmental Stewardship    IAR 96-104
      Annual Financial Report—Corporate Governance Report—Application of King IV within Gold Fields    AFR 16-17
      Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements—Health and Safety Impact    AFR 62
      Annual Financial Report—Accounting Policies—Provision for Environmental Rehabilitation Costs    AFR 155
      Further Information—Additional Information on the Company—Property    54-66
      Further Information—Description of Mining Business    80-84
      Further Information—The Gold Mining Industry    84-85
      Further Information—Environmental and Regulatory Matters    86-108
  

(c)   Organisational structure

   Further Information—Additional Information on the Company—Organisational Structure    43-44
  

(d)   Property, plant and equipment

   Further Information—Additional Information on the Company—Property    54-66
      Further Information—Additional Information on the Company—Gold Fields’ Mining Operations    44-54
      Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements    AFR 57-130
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 14. Property, Plant and Equipment    AFR 175
      Integrated Annual Report—Chief Executive Officer’s Report    IAR 12-18
      Further Information—Reserves of Gold Fields as at 31 December 2020    73-79
      Integrated Annual Report—Environmental Stewardship    IAR 98-106
      Integrated Annual Report—Profitable Production and Sustainable Cash-flow    IAR 68-73
      Further Information—Environmental and Regulatory Matters   

86-108

 

ii


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

4A    Unresolved staff comments    NA   
5    Operating and financial review and prospects      
  

(a)   Operating results

   Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements    AFR 57-130
      Annual Financial Report—Consolidated Income Statement    AFR 158
      Annual Financial Report—Consolidated Statement of Comprehensive Income    AFR 159
      Annual Financial Report—Consolidated Statement of Financial Position    AFR 160
      Annual Financial Report—Consolidated Statement of Cash Flows    AFR 162
      Annual Financial Report—Accounting Policies—Foreign Operations    AFR 148
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 38. Risk Management Activities—Foreign Currency Sensitivity    AFR 204
      Integrated Annual Report—Value Creation for Stakeholders—Government    IAR 92-93
      Further Information—Environmental and Regulatory Matters    86-108
  

(b)   Liquidity and capital resources

   Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements    AFR 57-130
      Integrated Annual Report—Capital Allocation and Sound Balance Sheet    IAR 74-80
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 24. Borrowings    AFR 186-188
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 34. Commitments    AFR 194
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 37. Financial Instruments    AFR 197-200
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 38. Risk Management Activities    AFR 201-210
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 39. Capital Management    AFR 211
  

(c)   Research and development, patents and licences, etc.

   NA   

 

iii


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

  

(d)   Trend information

   Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements—Trend and Outlook    AFR 129
      Integrated Annual Report—Chief Executive Officer’s Report    IAR 12-18
  

(e)   Off-balance sheet arrangements

   Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements—Off-Balance Sheet Items    AFR 127
  

(f)   Tabular disclosure of contractual obligations

   Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements—Contractual Obligations, Commitments and Guarantees as at 31 December 2020    AFR 127
  

(g)   Safe harbour

   Forward-Looking Statements    xiii-xiv
6    Directors, senior management and employees      
  

(a)   Directors and senior management

   Annual Financial Report—Corporate Governance Report—Directors    AFR 13-15
      Integrated Annual Report—How We Operate—Our Board of Directors    IAR 32-34
      Further Information—Directors, Senior Management and Employees—Directors    109-112
      Further Information—Directors, Senior Management and Employees—Executive Committee    112-114
      Annual Financial Report—Directors’ Report    AFR 20-24
  

(b)   Compensation

   Annual Financial Report—Remuneration Report    AFR 28-56
      Annual Financial Report—Note 40. Related Parties    AFR 212-213
  

(c)   Board practices

   Further Information—Directors, Senior Management and Employees    109-115
      Integrated Annual Report—How We Operate—Our Board of Directors    IAR 32-34
      Annual Financial Report—Corporate Governance Report—Directors    AFR 13-15
      Annual Financial Report—Remuneration Report    AFR 28-56
      Integrated Annual Report—How We Operate—Our Board of Directors—Our Board Committees    IAR 34
      Annual Financial Report—Audit Committee Report    AFR 25-27
      Annual Financial Report—Corporate Governance Report—Application of King IV within Gold Fields    AFR 16-17

 

iv


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

      Annual Financial Report—Corporate Governance Report—Board Committees—Audit Committee    AFR 10
      Annual Financial Report—Corporate Governance Report—Board Committees—Remuneration Committee    AFR 10-11
  

(d)   Employees

   Integrated Annual Report—Developing a Fit-for-Purpose Workforce    IAR 58-61
      Further Information—Directors, Senior Management and Employees—Employees    115
      Integrated Annual Report—Developing a Fit-for-Purpose Workforce—Organised Labour    IAR 61
      Integrated Annual Report—Safety and Wellbeing of Our People    IAR 52-57
      Further Information—Directors, Senior Management and Employees—TRIFR, Fatalities and Fatal Injury Frequency Rate    115-119
  

(e)   Share ownership

   Annual Financial Report—Directors’ Report—Share Ownership of Directors and Executive Officers    AFR 21
      Annual Financial Report—Remuneration Report    AFR 28-56
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 5. Share-based Payments    AFR 164-166
7    Major Shareholders and Related Party Transactions      
  

(a)   Major shareholders

   Further Information—Major Shareholders and Related Party Transactions—Major Shareholders    120
      Annual Financial Report—Shareholder’s Information    AFR 224-225
  

(b)   Related party transactions

   Further Information— Major Shareholders and Related Party Transactions—Related Party Transactions    120-121
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 40. Related Parties    AFR 212-213
  

(c)   Interests of experts and counsel

   NA   
8    Financial information      
  

(a)   Consolidated statements and other financial information

   Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements    AFR 57-130
      Annual Financial Report—Consolidated Income Statement    AFR 158

 

v


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

      Annual Financial Report—Consolidated Statement of Comprehensive Income    AFR 159
      Annual Financial Report—Consolidated Statement of Financial Position    AFR 160
      Annual Financial Report—Consolidated Statement of Changes in Equity    AFR 161
      Annual Financial Report—Consolidated Statement of Cash Flows    AFR 162
      Annual Financial Report—Audit Committee Report    AFR 25-27
      Annual Financial Report—Accounting Policies—Basis of Preparation—Provision for Silicosis Settlement Costs    AFR 144
      Annual Financial Report—Accounting Policies—Basis of Preparation —Provision for Environmental Rehabilitation Costs    AFR 144
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 25. Provisions    AFR 189-190
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 35. Contingent Liabilities    AFR 195-196
      Annual Financial Report—Management’s Discussion and Analysis—Silicosis Settlement Costs    AFR 91-92
      Annual Financial Report—Directors’ Report—Financial Affairs—Dividend Policy    AFR 22
      Integrated Annual Report—Capital Allocation and Sound Balance Sheet Management    IAR 74-80
  

(b)   Significant changes

   Annual Financial Report—Notes to the Consolidated Financial Statements—Note 36. Events After the Reporting Date    AFR 196
9    The Offer and listing      
  

(a)   Listing details

   Further Information—The Listing    122
  

(b)   Plan of distribution

   NA   
  

(c)   Markets

   Integrated Annual Report—About this Report    IAR 3
      Annual Financial Report—Directors’ Report—Listings    AFR 20
      Annual Financial Report—Administration and Corporate Information    AFR 235
  

(d)   Selling shareholders

   NA   
  

(e)   Dilution

   NA   
  

(f)   Expenses of the issue

   NA   

 

vi


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

10    Additional information      
  

(a)   Share capital

   NA   
  

(b)   Memorandum and articles of association

   Further Information—Additional Information—Memorandum of Incorporation    123-128
      Further Information—Additional Information—Corporate Governance    143
  

(c)   Material contracts

   Further Information—Additional Information—Material Contracts    128-132
      Annual Financial Report—Notes to the Consolidated Financial Statements—Note 24. Borrowings    AFR 186-188
  

(d)   Exchange controls

   Further Information—Additional Information—South African Exchange Control Limitations Affecting Security Holders    132
  

(e)   Taxation

   Further Information—Additional Information—Taxation    132-137
  

(f)   Dividends and paying agents

   NA   
  

(g)   Statement by experts

   NA   
  

(h)   Documents on display

   Further Information—Additional Information—Documents On Display    137-138
  

(i) Subsidiary information

   NA   
11    Quantitative and qualitative disclosures about market risk    Annual Financial Report—Notes to the Consolidated Financial Statements—Note 38. Risk Management Activities    AFR 201-210
12    Description of securities other than equity securities      
  

(a)   Debt securities

   NA   
  

(b)   Warrants and rights

   NA   
  

(c)   Other securities

   NA   
  

(d)   American depositary shares

   Further Information—Additional Information—Deposit Agreement    130-132
13    Defaults, dividend arrearages and delinquencies    NA   
14    Material modifications to the rights of security holders and use of proceeds    NA   
15    Controls and procedures    Further Information—Controls and Procedures    139-140
      Annual Financial Report— Management’s Discussion and Analysis—Internal Control over Financial Reporting    AFR 129
16A    Audit Committee financial expert    Further Information—Audit Committee Financial Expert    141

 

vii


Table of Contents

Item

  

Form 20-F Caption

  

Location in this document

  

Page

16B    Code of ethics    Annual Financial Report—Corporate Governance Report—Standards, Principles and Systems    AFR 5
16C    Principal accountant fees and services    Further Information—Principal Accountant Fees and Services    142
16D    Exemptions from the listing standards for audit committees    NA   
16E    Purchase of equity securities by the issuer and affiliated purchasers    NA   
16F    Change in registrant’s certifying accountant    NA   
16G    Corporate governance    Further Information—Corporate Governance    143
16H    Mine safety disclosure    NA   
17    Financial statements    NA   
18    Financial statements    Annual Financial Report—Reports of Independent Registered Public Accounting Firms    AFR 131-134
      Annual Financial Report—Consolidated Income Statement    AFR 158
      Annual Financial Report—Consolidated Statement of Comprehensive Income    AFR 159
      Annual Financial Report—Consolidated Statement of Financial Position    AFR 160
      Annual Financial Report—Consolidated Statement of Changes in Equity    AFR 161
      Annual Financial Report—Consolidated Statement of Cash Flows    AFR 162
      Annual Financial Report—Accounting Policies    AFR 135-157
      Annual Financial Report—Notes to the Consolidated Financial Statements    AFR 163-218
19    Exhibits    Exhibits    144-147

 

viii


Table of Contents

PRESENTATION OF FINANCIAL INFORMATION

Gold Fields Limited (Gold Fields or the Company) is a South African company and, in fiscal 2020, 10 per cent., 37 per cent., 44 per cent. and 9 per cent. of Gold Fields’ operations, based on managed gold-equivalent production, were located in South Africa, Ghana (including the Asanko JV (as defined below)), Australia and Peru, respectively. The Gold Fields consolidated financial statements are presented in U.S. dollar which is the Group’s presentation currency. The Group’s annual and interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), and as prescribed by law (refer to the “Basis of preparation” section of the accounting policies to the consolidated financial statements).

Except as otherwise noted, the financial information included in this annual report has been prepared in accordance with IFRS and is presented in U.S. dollars, and for descriptions of critical accounting policies, refer to accounting policies under IFRS.

For Gold Fields’ consolidated financial statements, unless otherwise stated, statement of financial position item amounts are translated from Rand and A$ to U.S. dollars at the exchange rate prevailing on the statement of financial position date for fiscal 2020 (Rand 14.69 per U.S.$1.00 and U.S.$0.77 per A$1.00 as of 31 December 2020), except for specific items included within shareholders’ equity and the statement of cash flows that are translated at the rate prevailing on the date the relevant transaction was entered into, and income statement item amounts are translated from Rand and A$ to U.S. dollars at the weighted average exchange rate for each period (Rand 16.38 per U.S.$1.00 and U.S.$0.69 per A$1.00 for fiscal 2020).

In this annual report, Gold Fields presents the financial items “all-in sustaining costs” (AISC), “all-in sustaining costs per ounce”, “all-in costs” (AIC), and “all-in costs per ounce”, which have been determined using industry standards promulgated by the World Gold Council (WGC) and are non-IFRS measures. The WGC standard was released by the WGC on 27 June 2013. Gold Fields voluntarily adopted and implemented these metrics as from the quarter ended June 2013. On 14 November 2018, the WGC published an update to its guidance note on the interpretation of all-in sustaining and all-in costs. The note provided additional clarity on what constitutes growth capital expenditure. Gold Fields has considered the new guidance note to ensure the interpretation of the guidelines is consistent with the additional guidance now available and adopted the updated guidance prospectively from 1 January 2019. An investor should not consider these items in isolation or as alternatives to cost of sales, profit before tax, profit for the year, cash flows from operating activities or any other measure of financial performance presented in accordance with IFRS. While the WGC provided definitions for the calculation of AISC and AIC, the calculation of AISC, AISC per ounce, AIC and AIC per ounce may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies. See “—Further Information—Key Information—Selected Historical Consolidated Financial Data”, “—Additional Information on the Company—Glossary of Mining Terms—All-in sustaining costs” and “—Additional Information on the Company—Glossary of Mining Terms—All-in costs”. For the definitions and reconciliations of these non-IFRS measures to IFRS, see “—Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements”.

Gold Fields also presents “net cash flow”, “net debt”, “adjusted free cash flow”, “adjusted free cash flow margin”, “adjusted EBITDA” and “normalised profit” in this annual report, which are non-IFRS measures. An investor should not consider these items in isolation or as alternatives to cash flow from operating activities, cash and cash equivalents or any other measure presented in accordance with IFRS. Net cash flow is defined as net cash flow from operations less the South Deep dividend, net capital expenditure (additions to property, plant and equipment less proceeds on disposal of property, plant and equipment), and environmental trust fund and rehabilitation payments, as per the consolidated statement of cash flows. Adjusted free cash flow is defined as revenue (excluding by-product revenue) less AIC adjusted for non-cash share-based payments, non-cash long-term employee benefits, exploration, feasibility and evaluation costs outside of existing operations, non-sustaining capital expenditure for growth projects only, realised gains or losses on revenue hedges, redemption

 

ix


Table of Contents

of Asanko preference shares and taxation paid (excluding royalties). Adjusted free cash flow margin is defined as adjusted free cash flow divided by revenue adjusted for by product revenue. Net debt (excluding lease liabilities) is defined as total borrowings less cash and cash equivalents and net debt is defined as total borrowings plus lease liabilities less cash and cash equivalents. Adjusted EBITDA is defined as profit or loss for the year adjusted for interest, taxation, amortisation and depreciation and certain other costs. Normalised profit is defined as profit excluding gains and losses on foreign exchange, financial instruments and non-recurring items after taxation and non-controlling interest effect. The definition for the calculation of net cash flow, adjusted free cash flow, adjusted free cash flow margin, adjusted EBITDA and normalised profit may vary significantly between companies, and by themselves do not necessarily provide a basis for comparison with other companies. See “—Additional Information on the Company—Glossary of Mining Terms”. For the definitions and reconciliations of these non-IFRS measures to IFRS, see “—Annual Financial Report—Management’s Discussion and Analysis of the Financial Statements”.

Market Information

This annual report includes industry data about Gold Fields’ markets obtained from industry surveys, industry publications, market research and other publicly available third-party information. Industry surveys and industry publications generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed. Gold Fields and its advisers have not independently verified this data.

In addition, in many cases, statements in this annual report regarding the gold mining industry and Gold Fields’ position in that industry have been made based on internal surveys, industry forecasts and market research, as well as Gold Fields’ own experiences. While these statements are believed by Gold Fields to be reliable, they have not been independently verified.

Websites

References in this document to information on websites (and/or social media sites) are included as an aid to their location and such information is not incorporated in, and does not form part of, this annual report on Form 20-F.

 

x


Table of Contents

DEFINED TERMS AND CONVENTIONS

In this annual report, all references to the “Group” are to Gold Fields and its subsidiaries.

In this annual report, all references to “fiscal 2016” are to the 12-month period ended 31 December 2016, all references to “fiscal 2017” are to the 12-month period ended 31 December 2017, all references to “fiscal 2018” are to the 12-month period ended 31 December 2018, all references to “fiscal 2019” are to the 12-month period ended 31 December 2019, all references to “fiscal 2020” are to the 12-month period ending 31 December 2020, all references to “fiscal 2021” are to the 12-month period ending 31 December 2021 and all references to “fiscal 2022” are to the 12-month period ending 31 December 2022. In this annual report, all references to “South Africa” are to the Republic of South Africa, all references to “Ghana” are to the Republic of Ghana, all references to “Australia” are to the Commonwealth of Australia, all references to “Chile” are to the Republic of Chile, all references to “Peru” are to the Republic of Peru, all references to the “Philippines” are to the Republic of the Philippines and all references to the “United States” and “U.S.” mean the United States of America, its territories and possessions and any state of the United States and the District of Columbia.

In this annual report, all references to the “DMRE” are references to the South African Department of Mineral Resources and Energy, the government body responsible for regulating the mining industry in South Africa.

This annual report contains descriptions of gold mining and the gold mining industry, including descriptions of geological formations and mining processes. In order to facilitate a better understanding of these descriptions, this annual report contains a glossary defining a number of technical and geological terms. See “—Additional Information on the CompanyGlossary of Mining Terms”.

In this annual report, gold production figures are provided in troy ounces, which are referred to as “ounces” or “oz”, or in kilograms, which are referred as “kg”. Ore grades are provided in grams per metric tonne, which are referred to as “grams per tonne” or “g/t”. All references to “tonnes” or “t” in this annual report are to metric tonnes. All references to “gold” include gold and gold equivalent ounces, unless otherwise specified or where the context suggests otherwise. See “—Additional Information on the CompanyGlossary of Mining Terms” for further information regarding units of measurement used in this annual report and a table providing rates of conversion between different units of measurement. AIC, net of by-product revenue, and AISC, net of by-product revenue, are calculated per ounce of gold sold, excluding gold equivalent ounces. See “—Annual Financial Report—Management’s Discussion and Analysis of the Financial StatementsAll-in Sustaining and All-in Costs”.

This annual report contains references to the “total recordable injury frequency rate” (TRIFR) at each Gold Fields operation—which was introduced in 2013. The TRIFR at each operation includes the total number of fatalities, lost time injuries, medically treated injuries (MTI) and restricted work injuries (RWI) per million man hours. 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 (i.e. the employee or contractor is unable to perform any of his/her duties). An MTI is a work-related injury sustained by an employee or contractor which does not incapacitate that employee and who, after having received medical treatment, is deemed fit to immediately resume his/her normal duties on the next calendar day, immediately following the treatment or re-treatment. An RWI is a work-related injury sustained by an employee or contractor which results in the employee or contractor being unable to perform one or more of their routine functions for a full working day from the day after the injury occurred, but the employee or contractor can still perform some of his/her duties.

In this annual report, “R” and “Rand” refer to the South African Rand and “SA cents” refers to subunits of the South African Rand, “$”, “U.S.$” and “U.S. dollars” refer to United States dollars, “U.S. cents” refers to subunits of the U.S. dollar, “A$” and “Australian dollars” refer to Australian dollars, “GH” refers to Ghana Cedi, “S/.” refers to the Peruvian Nuevo Sol and “CAD” refers to Canadian dollars.

In this annual report, except where otherwise noted, all production and operating statistics are based on attribution of 100 per cent. of Gold Fields’ total operations, which include production from the Tarkwa and Damang mines in Ghana and from the Cerro Corona mine in Peru, a portion of which is attributable to the non-

 

xi


Table of Contents

controlling shareholders in those mines. In addition, production and operating statistics for Asanko (as defined below) are included on an attributable basis (based on Gold Fields’ 45 per cent. interest in Asanko). This annual report contains references to “gold equivalent ounces”, which are quantities of metals (such as copper) expressed as amounts of gold using the prevailing prices of gold and the other metals. To calculate this, the accepted total value of the metal based on its weight and value is divided by the accepted value of one troy ounce of gold.

 

xii


Table of Contents

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 (the Securities Act) and Section 21E of the U.S. Securities Exchange Act of 1934 (the Exchange Act) with respect to Gold Fields’ financial condition, results of operations, business strategies, operating efficiencies, competitive position, growth opportunities for existing services, plans and objectives of management, markets for stock and other matters.

These forward-looking statements, including, among others, those relating to the future business prospects, revenues, income and 2020 production and operational guidance of Gold Fields, wherever they may occur in this annual report and the exhibits to the annual report, are necessarily estimates reflecting the best judgement of the senior management of Gold Fields and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. As a consequence, these forward-looking statements should be considered in light of various important factors, including those set forth in this annual report. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation:

 

   

the impact from, and measures taken to address, the coronavirus (COVID-19) pandemic;

 

   

changes in the market price of gold, and to a lesser extent copper and silver;

 

   

material changes in the value of Rand and non-U.S. dollar currencies;

 

   

difficulties, operational delays, cost pressures and impact associated with the mine ramp-up post the organisational restructuring and supporting interventions at the South Deep operation in South Africa;

 

   

the ability of the Group to comply with expectations that it provide benefits to affected communities;

 

   

the effect of relevant government regulations, particularly labour, environmental, tax, royalty, health and safety, water, regulations and potential new legislation affecting mining and mineral rights;

 

   

court decisions affecting the South African mining industry, including, without limitation, regarding the interpretation of mineral rights legislation and the treatment of health and safety claims;

 

   

the challenges associated with replacing annual mineral reserve and resource depletion as well as growing its reserve and resource base to extend the life of operations;

 

   

the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions or joint ventures;

 

   

the success of the Group’s business strategy, development activities and other initiatives, particularly at Damang and the Salares Norte project;

 

   

changes in technical and economic assumptions underlying Gold Fields’ mineral reserve estimates;

 

   

supply chain shortages and increases in the prices of production imports;

 

   

changes in health and safety regulations that could lead to claims or liability for regulatory breaches;

 

   

the occurrence of operational disruptions such as stoppages related to environmental and industrial accidents and pollution incidents;

 

   

power cost increases as well as power stoppages, fluctuations and usage constraints;

 

   

regulation of greenhouse gas emissions and climate change;

 

   

high debt levels posing a risk to viability and making the Group more vulnerable to adverse economic and competitive conditions;

 

xiii


Table of Contents
   

the ability of the Group to protect its information technology and communication systems and the personal data it retains as well as the failure of such systems;

 

   

loss of senior management or inability to hire or retain sufficiently skilled employees or sufficient representation among Historically Disadvantaged Persons in management positions in South Africa;

 

   

the ability to obtain, renew and comply with, water use licences and water quality discharge standards;

 

   

the occurrence of future acid mine drainage related pollution;

 

   

geotechnical challenges due to the ageing of certain mines and a trend toward mining deeper pits and more complex, often deeper underground, deposits;

 

   

economic, political or social instability in the countries where Gold Fields operates;

 

   

the continued status of South Africa’s credit rating as non-investment grade and its impact on Gold Fields’ ability to secure financing;

 

   

ageing infrastructure, unplanned breakdowns and stoppages that may delay production, increase costs and industrial accidents;

 

   

the inability to modernise operations and remain competitive within the mining industry;

 

   

the effects of regional cessation of dewatering at South Deep;

 

   

the effects of a failure of a dam at a tailings facility and the closure of adjacent mines;

 

   

reliance on outside contractors to conduct some of its operations;

 

   

actual or alleged breach or breaches in governance processes, fraud, bribery or corruption at Gold Fields’ operations that leads to censure, penalties or negative reputational impacts;

 

   

the occurrence of labour disruptions and industrial actions;

 

   

fluctuations in insurance cost and availability and the adequacy of the Group’s insurance coverage;

 

   

financial flexibility could be limited by South African exchange control regulations;

 

   

difficulty controlling theft of gold and copper bearing materials and illegal mining on some Gold Fields properties;

 

   

the costs and burdens associated with tenements in Australia which are subject to native title claims, including any compensation payable to native title holders;

 

   

the impact of HIV/AIDS, tuberculosis and the spread of contagious diseases;

 

   

difficulty with participating in future issues of securities, or in bringing an action against Gold Fields, for shareholders outside South Africa;

 

   

liquidity risks in trading ordinary shares on JSE Limited;

 

   

Gold Fields’ ability to pay dividends or make similar payments to its shareholders; and

 

   

shareholders’ equity interests in Gold Fields becoming diluted upon the exercise of outstanding share options.

Gold Fields undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events.

 

xiv


Table of Contents

TABLE OF CONTENTS

 

     Page  

FORM 20-F CROSS REFERENCE GUIDE

     i  

PRESENTATION OF FINANCIAL INFORMATION

     ix  

DEFINED TERMS AND CONVENTIONS

     xi  

FORWARD-LOOKING STATEMENTS

     xiii  

INTEGRATED ANNUAL REPORT

     IAR-1  

ANNUAL FINANCIAL REPORT

     AFR-1  

FURTHER INFORMATION

     1  

KEY INFORMATION

     1  

RISK FACTORS

     5  

ADDITIONAL INFORMATION ON THE COMPANY

     43  

GLOSSARY OF TERMS

     67  

RESERVES OF GOLD FIELDS AS AT 31 DECEMBER 2020

     73  

DESCRIPTION OF MINING BUSINESS

     80  

ENVIRONMENTAL AND REGULATORY MATTERS

     86  

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

     109  

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

     120  

THE LISTING

     122  

ADDITIONAL INFORMATION

     123  

CONTROLS AND PROCEDURES

     139  

AUDIT COMMITTEE FINANCIAL EXPERT

     141  

PRINCIPAL ACCOUNTANT FEES AND SERVICES

     142  

CORPORATE GOVERNANCE

     143  

EXHIBITS

     144  

SIGNATURES

     148  

 

 

xv


Table of Contents

    

LOGO

 

    

2020

 

INTEGRATED ANNUAL REPORT

 

 

 

 

IAR-1


Table of Contents

LOGO

 

    

GOLD FIELDS IS A GLOBALLY DIVERSIFIED GOLD PRODUCER WITH NINE OPERATING MINES IN AUSTRALIA, PERU, SOUTH AFRICA AND WEST AFRICA (INCLUDING THE ASANKO JOINT VENTURE (JV)) AND ONE PROJECT IN CHILE. WE HAVE TOTAL ATTRIBUTABLE ANNUAL GOLD-EQUIVALENT PRODUCTION OF 2.24MOZ AND ATTRIBUTABLE GOLD-EQUIVALENT MINERAL RESERVES OF 52.1MOZ. OUR SHARES ARE LISTED ON THE JOHANNESBURG STOCK EXCHANGE (JSE), WITH OUR AMERICAN DEPOSITARY SHARES TRADING ON THE NEW YORK STOCK EXCHANGE (NYSE).

The cover photo of our 2020 Integrated Annual Report (IAR) shows our Salares Norte

project in the Atacama region in northern Chile. The project received the go ahead by

our Board of Directors in February 2020, and construction is progressing as per plan

and expected to be completed in Q1 2023.

 

 

CONTENTS

                                                                                                
                                                                                                                            

INTRODUCTION

    

         This section introduces our IAR
and approach to reporting. It
also offers an overview of our
seven strategic pillars and
portfolio of operations.

    

In this section, our Chairperson
provides an overview of our
reporting year. This is followed
by a detailed report from our
Chief Executive Officer (CEO),
who also explains what each of
the seven strategic pillars
means to our business, along
with key trends over the past
10 years.

    

    

This section introduces our
Board of Directors and
explains how our governance
processes adds value to our
business. We explain our
business model and how we
create enduring value for our
stakeholders and we disclose
our top risks and associated
opportunities arising from our
operating environment.

    

    

    

    

    

In this section, we provide a
detailed account of our 2020
performance against our seven
strategic pillars.

    

    

    

    

This section provides internal
and external assurance over
selected sustainability data
included in this report. Our
independent auditor’s report,
which provides assurance on
our consolidated financial
statements, is included in our
Annual Financial Report (AFR).

  
 

About this report

 

     3        
 

Where Gold Fields operates

     6        
 

 

OUR LEADERSHIP AND STRATEGY

 

        
 

Vision of the Chairperson

 

     10        
 

Chief Executive Officer’s report

 

     12        
 

Overview of strategic objectives

 

     19        
 

Group Balanced Scorecards

     26        
 

 

HOW WE OPERATE

        
 

 

Our board of directors

 

     32        
 

How we govern our business

 

     35        
 

Our business model

 

     38        
 

Stakeholders and value creation

 

     40        
 

Material matters

 

     43        
 

Risks and opportunities

 

     44        
 

 

OUR PERFORMANCE

 

        
 

Safety and wellbeing of our people

 

     52        
 

Developing a fit-for-purpose workforce

 

     58        
 

Creating a global, sustainable portfolio

 

     62        
 

Profitable production and sustainable cash

 

     68        
 

Capital allocation and sound balance sheet management

 

     76        
 

Value creation for stakeholders

 

     81        
 

Environmental stewardship

     96        
 

 

ASSURANCE

        
 

 

First Party: Internal Audit statement

 

     106        
 

Independent assurance statement – sustainability information

 

     107        
 

Assured sustainability performance indicators

 

     110        
 

Independent assurance statement – South African Mining Charter

 

     111        
 

Administration and corporate information

     112        
          
          
          
          

SEND US YOUR FEEDBACK

Your feedback on our reporting suite is important to us. To ensure that we report on the issues our stakeholders care about,

please provide any feedback and questions to investors@goldfields.com or sustainability@goldfields.com, or visit

www.goldfields.com to download the feedback form.

 

 

 

IAR-2


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

INTRODUCTION

   

    

 

ABOUT THIS REPORT

 

OUR REPORT’S STAKEHOLDER AND STRATEGY FOCUS

The aim of our integrated reporting suite is to enable our stakeholders, including capital providers, to make an informed assessment of Gold Fields’ long-term sustainability and ability to create enduring value. We embrace integrated thinking, and by structuring our 2020 IAR around our strategic pillars (p11), we concisely and transparently articulate how our material matters, risks and opportunities, operating environment, performance and prospects unlock value for stakeholders.

In compiling this IAR, we complied with the Global Reporting Initiative (GRI) Standards: Core option and the International Integrated Reporting Council’s (IIRC’s) International <IR> Framework. As detailed on p3 of our AFR, we have also aligned this report with a range of additional codes, frameworks and standards, including the King IV Report on Corporate Governance for South Africa 2016 (King IVTM1). On occasion, we use non-International Financial Reporting Standards (IFRS) measures in the IAR, as defined on p133 – 137 of the AFR.

 

1 

Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

REPORTING SCOPE AND BOUNDARY

This IAR presents Gold Fields’ strategic pillars, business model, Group and regional risks and opportunities, stakeholder expectations and operational performance for the financial year 1 January 2020 to 31 December 2020. It includes material information relating to our nine operations in Peru, Australia, South Africa, West Africa (including our Asanko JV), and one project in Chile.

Any material events after year-end and up to the Board approval date of 31 March 2021 have also been included. Our geographical footprint is detailed on p4 – 5.

The term “attributable” as it relates to production and Mineral Reserves refers to 100% of our mines and projects, as well as Damang (90%), Tarkwa (90%), Gruyere (50%), Asanko (45%) and Far Southeast (FSE) (40%). The exception is attributable Mineral Reserves at South Deep (91%). The term “managed” relating to production and Mineral Reserves refers to 100% of our mines and projects, as well as Gruyere (50%), Asanko (50%) and FSE (40%). The net debt: EBITDA ratios mentioned in this report refer to adjusted EBITDA, while we present Group and mine All-in costs (AIC) and All-in sustaining costs (AISC) in terms of the original World Gold Council interpretation.

Non-financial data included in this IAR relates to our eight operating mines and excludes our non-managed Asanko JV and the Salares Norte project in Chile, unless stated. Where relevant, we include data from Darlot (sold in 2017) up to October 2017. Socio-economic development (SED) spend, includes the South Deep trusts and project spend.

We used average exchange rates for 2020 of R16.38/ US$1 and US$0.69/A$1 in this report (2019: R14.46/ US$1 and US$0.70/A$1; 2018: R13.20/US$1 and US$0.75/A$1). For 2021, we used forecast exchange rates of R17.50/US$1 and US$0.75/A$1.

 

 

IAR REPORTING BOUNDARY

 

LOGO

FORWARD-LOOKING STATEMENTS

This IAR contains forward-looking statements within the meaning of section 27A of the U.S. Securities Act of 1933 (the Securities Act) and section 21E of the U.S. Securities Exchange Act of 1934 (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. Such forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “anticipates”, “aims”, “continues”, “expects”, “hopes”, “may”, “will”, “would” or “could” or, in each case, their negative or other various or comparable terminology.

These forward-looking statements, including, among others, those relating to Gold Fields’ future business prospects, revenues and income, wherever they may occur in this IAR, are necessary estimates reflecting the best judgement of Gold Fields’ senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Consequently, these forward-looking statements should be considered in light of various important factors, including those outlined in this IAR. Gold Fields undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

 

LOGO Refer to the full forward-looking statements on www.goldfields.com

 

IAR-3


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

NAVIGATING OUR REPORT

ICMM, GRI AND UN SDG COMPLIANCE

The IAR forms part of our compliance with the GRI Standards, as well as the reporting requirements of the International Council on Mining & Metals (ICMM) Sustainable Development Framework, Principles and Position Statements (see p107 – 111 for the assurance hereof). Our compliance with the ICMM is addressed throughout this report and on our website, and details:

 

How our sustainable development policies align with the ICMM’s 10 Principles and mandatory Position Statements

 

How we identify specific sustainable development risks and opportunities

 

The systems and approaches we implemented to manage the sustainable development risks and opportunities identified

 

Our performance across the identified material sustainable development risks and opportunities

We present our self-assessment of adherence with the ICMM Principles and Position Statements online. We also align with the 10 Principles of the United Nations Global Compact (UNGC). We consider that this IAR, together with additional documents available on our website, complies with the requirements of the GRI Standards.

 

LOGO Disclosures in accordance with the GRI Standards can be accessed at www.goldfields.com/sustainability-overview.php

 

We aim to be the global leader in sustainable gold mining. In pursuit of this vision, Gold Fields positively contributes to the UN Sustainable Development Goals (SDGs). As part of our commitment to sustainable development, we actively seek out opportunities to collaborate with partners on a global level. In this way, we can support lasting social and economic progress to play our part in bringing an end to poverty, protecting the environment and ensuring growth in prosperity, where we operate

We identified the following 11 SDGs that we believe we can impact the most, thereby enabling meaningful change in co-operation with our peers in the mining and metals sector:

 

LOGO

THE 2020 REPORTING SUITE

 

LOGO

 

IAR-4


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

INTRODUCTION

   

    

 

 

LOGO

 

BOARD APPROVAL

Gold Fields’ Board of Directors acknowledges its responsibility to ensure the integrity of this IAR. It is of the opinion that the 2020 IAR complies in all material respects with the relevant statutory and regulatory requirements – particularly the International <IR> Framework, as updated in January 2021, IFRS and the South African Companies Act No 71 of 2008 (as amended). The Board further believes that the 2020 IAR addresses all material matters and offers a comprehensive view of the Company’s strategic objectives, including how these enable Gold Fields to create value for stakeholders in the short, medium and long term. The Board unanimously approved the 2020 IAR – as well as the 2020 AFR, which includes our Annual Financial Statements – for release on 31 March 2021.

        LOGO

LOGO

Cheryl Carolus

 

    

    

ASSURANCE

ERM Southern Africa (ERM) provided independent reasonable assurance over key sustainability information in this report, which is prepared in accordance with the GRI Standards: Core option. As a member of the ICMM, we are committed to obtaining assurance in line with the ICMM Sustainable Development Framework: Assurance Procedure. ERM assured our statement on compliance with the ICMM Sustainable Development Framework, Principles and Reporting Requirements. The key sustainability performance data assured by ERM in 2020 is detailed on p107 – 111.

    

    

 

IAR-5


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

WHERE GOLD FIELDS OPERATES – 2020 PERFORMANCE

 

    

Gold Fields is a globally diversified gold producer with nine operating mines in Australia, Peru, South Africa and West Africa (including the Asanko JV), as well as one project in Chile. We have total attributable annual gold-equivalent production of 2.2Moz and attributable gold-equivalent Mineral Reserves of 52.1Moz. Our shares are listed on the JSE and our American depositary shares trade on the NYSE.

    

 

LOGO

AMERICAS

Mines: Cerro Corona in Peru – copper, gold –

open pit mine

Project Salares Norte in Chile – gold, silver deposit

 

Safety (TRIFR – Cerro Corona)

     0.58  

Workforce

  

Employees

     568  

Contractors

     3,700  

Attributable gold-eq production (koz)

     206  

AIC (US$/eq-oz)

     1,119  

Net cash-flow (US$m)1

     84  

Attr Gold Mineral Reserves (Moz)

     4.84  

LOGO

WEST AFRICA

Mines: Tarkwa, Damang and Asanko (50/50 JV) in

Ghana – open pit mines

 

    

 

Safety (TRIFR)2

     0.75  

Workforce2

  

Employees

     1,063  

Contractors

     5,940  

Attributable production (koz)3

     787  

AIC (US$/oz)3

     1,060  

Net cash-flow (US$m)1,2

     290  

Attr Gold Mineral Reserves (Moz)

     6.41  
 

 

LOGO    LOGO

 

1 Net cash-flow from operating activities less net capital expenditure (capex), environmental payments, lease payment and redemption of Asanko preference shares.

2 Excludes 45% of Asanko.       3 Includes 45% of Asanko.

 

IAR-6


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

INTRODUCTION

   

    

 

 

 

GROUP OVERVIEW

Mines: Nine mines in Peru, South Africa, Australia and Ghana

(incl. 45% of Asanko)

 

Project: One project in Chile

         CONTRIBUTION TO

GROUP ATTRIBUTABLE PRODUCTION

 

LOGO

Safety

     

Fatal incident

     1     

TRIFR

     2.40     

Workforce

     

Employees

     5,641     

Contractors

     12,771     

Attributable production (koz)

     2,236     

AIC (US$/eq-oz)

     1,079     

Net cash-flow (US$m)1

     631     

Attr Gold-eq Mineral Reserves (Moz)

     52.10     

 

    
        

 

LOGO

SOUTH AFRICA

Mines: South Deep – underground mine

Safety

  

Fatal incident

     1  

TRIFR

     3.51  

Workforce

  

Employees

     2,342  

Contractors

     1,801  

Attributable production (koz)

     227  

AIC (US$/oz)

     1,260  

Net cash-flow (US$m)1

     34  

Attr Gold Mineral Reserves (Moz)

     31.54  

LOGO

AUSTRALIA

Mines: St Ives, Granny Smith, Agnew and Gruyere (50/50 JV) – open pit and underground mines

 

Safety (TRIFR)

     6.06  

Workforce

  

Employees

     1,668  

Contractors

     1,330  

Attributable production (koz)

     1,017  

AIC (US$/oz)

     957  

Net cash-flow (US$m)1

     498  

Attr Gold Mineral Reserves (Moz)

     7.49  
 

 

LOGO    LOGO

 

IAR-7


Table of Contents

LOGO

 

IAR-8


Table of Contents


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

VISION OF THE CHAIRPERSON

 

LOGO   

“The Board has complete confidence in the ability of Gold Fields’ management team and its employees to continue dealing successfully with the ongoing impact of Covid-19”

 

Cheryl Carolus

 

DEAR STAKEHOLDERS

This past year has been a remarkable one for Gold Fields. Firstly, the outbreak of Covid-19 not only challenged our personal lives, but also business-as-usual across the regions where we operate. Secondly, despite the impact of the pandemic, Gold Fields had another year of impressive performance, with strong earnings, cash-flows and value creation for our stakeholders. Finally, 2020 was the last year that Nick Holland led the Company. He officially retired at the end of March. A memorable era in Gold Fields’ history has come to an end, and we are embarking on a new chapter with the appointment of Chris Griffith as Chief Executive Officer (CEO) from April onwards.

In last year’s report, I made initial reference to our management’s proactive and comprehensive approach to mitigating the early impacts of Covid-19 on our people and operations. None of us could have foreseen that, a year later, the pandemic would still be with us. Tragically, 10 of Gold Fields’ employees and contractors have lost their lives, as have many of our colleagues’ relatives. On behalf of the Board, I want to express our heartfelt condolences to the families and friends of those who have succumbed to Covid-19, as well as to our colleagues who have lost their loved ones.

In this Integrated Annual Report (IAR), we report extensively on how our teams managed to, first and foremost, protect our employees and contractors, assist our host communities and governments in mitigating the pandemic’s impact, and keep our mines and projects

operating strongly and safely. The Board receives regular updates, via its Risk Committee, of the actions taken by the Company.

We expect that the pandemic will remain a reality for months to come, perhaps even years, and could impact our operational plans in yet unforeseen ways. The Board has requested the Group’s management team to develop strategies on how we can assist in making vaccines available to our workforce, and, where appropriate, to families and communities, as well as prepare our people and business for this ‘new normal’. As such, we are exploring ways of supporting our employees who, for example, are now permanently working from home or are struggling as a result of the continued impact of Covid-19. At an operational level, we will continue to test our people, provide them with the necessary equipment and information to protect themselves, and help them in any possible way we can if they contract Covid-19.

The Board has complete confidence in the ability of Gold Fields’ management team and its workforce to continue dealing successfully with the ongoing impact of Covid-19. Our 2020 operational performance speaks for itself – despite the challenges and disruptions of the year, the Company delivered a strong set of results in 2020. The impact of Covid-19 was limited to approximately 3% of production (approximately 80koz) and, while our operations spent an additional US$30m to deal with the pandemic or donate to host governments, both costs and production were within revised market guidance.

The stable production and cost profile was supported by a record high gold price. Our financial results also benefited from the gold price, and included net cash-flow of US$631m and normalised earnings of US$879m – both more than double our performance in 2019. We reduced net debt by almost US$600m, placing our balance sheet in a very healthy position, and recorded a net debt:EBITDA ratio of 0.56x – the lowest it has been in almost a decade. Our shareholders received a total dividend of R4.80/ share, three times that of 2019. They also saw their shares hit record highs in 2020, though this has since retreated in line with the decline in the gold price from its record levels of over US$2,050/ oz in August last year.

In February 2020, our Board decided to go ahead with the US$860m Salares Norte project in Chile. Construction proceeded as planned during the year and is set for completion in Q1 2023. Salares Norte is the latest building block in the Company’s reinvestment programme of the past three years, during which we also effectively built two new mines, Gruyere in Australia and the Damang Pit Cutback in Ghana. Both mines contributed meaningfully to the Group’s cash-flow during 2020. I am also particularly pleased to report that South Deep again showed strong financial and operational improvements and contributed positive cash-flow during 2020.

Gold Fields continues to focus on maximising in-country and host community economic impact. The Group’s value distribution to national economies amounted to US$2.85bn in 2020 compared with US$2.58bn in 2019. Of this, US$676m, 28%

 

 

IAR-10


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR LEADERSHIP AND STRATEGY

   

    

 

 

of the total, remained with our host communities. We achieved this by maximising the number of people we employ from our host communities, prioritising procurement from local enterprises and channelling our socioeconomic development (SED) spend to these communities. Over the past five years, we have created over US$3.54bn in community value, which, we believe, presents a significant investment in the economic wellbeing of our host communities and the estimated 435,000 people who reside there.

At the same time, we need to ensure that our mining activities do not adversely impact the environment around our operations or denude the natural resources both our Group and host communities depend on. Pleasingly, we again recorded zero serious environmental incidents for the second year in a row – a good yardstick of our success in this area. Similarly, our high levels of water recycling or reuse limited our uptake of freshwater from our catchment areas, while our continued investment in renewables is one of the ways we limit our carbon emissions. During 2020, we successfully commissioned two renewable microgrids at Agnew and Granny Smith in Australia. Furthermore, now that we have received the relevant approvals from the government, South Deep will be the next operation in our portfolio to build a solar plant, which, once operational, expected in Q2 2022, will provide about 20% of the mine’s electricity needs.

The most critical part of the Board’s duties undoubtedly relates to the safety, health and development of the Company’s workforce and the Board has always shared management’s commitment to eliminate all fatalities and serious injuries at our operations. Over the years, we have seen noticeable progress in this area emanating from our significant and continued investment in safety culture, systems and leadership. Tragically, however, we again recorded a fatal incident in 2020, that of Abel Magajane, a shaft timberman at South Deep, as well as six serious injuries. We owe it to Abel and the many other miners who have lost their lives, that we reaffirm our commitment to achieving zero harm.

The Board also seeks to further improve the diversity and inclusivity of the Company’s workforce. While we made some progress – with around 20% of our workforce and 21% of leadership teams now female – we still have a way to go to truly reflect the demographics

of the countries in which we operate. Our management team has developed a diversity and inclusion dashboard with several performance indicators, which are part of every manager’s scorecard, against which we can benchmark our improvements over the coming years. The Board will be closely tracking the Company’s performance in this regard.

With the rapid modernisation of our mines, we also need to ensure our workforce is appropriately skilled to meet the challenges of digitisation and automation. We are adapting training, skills development and recruitment policies accordingly to ensure our people can succeed in these new ways of working.

In recent years, managing environmental, social and governance (ESG) issues has become an increasingly critical consideration for our stakeholders – particularly investors. To date, Gold Fields has mostly relied on internal objectives to guide this ESG work; however, stakeholders expect that we report more publicly on progress in these areas. Together with management, the Board is developing a range of strategic ESG priorities, which we report on in this IAR. Before the end of the year, we will finalise and publish detailed targets for these priorities – ranging from safety to climate change, diversity and communities – for implementation by 2025.

Over the past few years, I have had the benefit of working with a consistent Board and Executive Committee (Exco) to govern, guide and manage the Company. This year, we saw some significant changes. At Board level, we accepted the resignation of Rick Menell, our Deputy Chairperson since 2015 and a director since 2008, with effect from 10 March 2021. Rick has been one of the most influential voices on the Board over this period and led the search for the new CEO this year. I want to thank Rick for his support and invaluable contribution.

We also accepted the resignation of Phuthi Mahanyele-Dabengwa due to her role as Naspers’ CEO. With the appointment of Philisiwe Sibiya, we found an equally well qualified leader with solid business experience. We wish Phuthi well in her leadership role and welcome Philisiwe to the Board. As always, I want to extend my gratitude to my fellow directors for their support and experience in providing Gold Fields with valuable strategic and governance oversight.

At executive level, we bid farewell to

Nick Holland after 24 years with the Company – first as Chief Financial Officer (CFO) and, from 2008, as CEO. Chris Griffith will assume the role of Gold Fields’ CEO from 1 April 2021. On behalf of the Board, we are delighted to have attracted a leader of Chris’ calibre. He has an extensive and successful leadership track record, amongst others, at Anglo American Platinum and Kumba Iron Ore, with many years’ experience as part of Anglo American’s global leadership teams. He has a strong track record of building and motivating successful teams to achieve corporate turnarounds and outstanding results. Chris is held in high regard for his strong ethical leadership and sound governance. We believe that under his leadership, Gold Fields will continue to grow, building on the solid foundation created by Nick, the leadership team and our entire workforce of 5,600 employees.

As Nick retires, he can certainly accept credit for a Company that has chartered its own course over the past decade, relying primarily on organic growth to become a global leader in mechanised and sustainable gold mining. As he set out to accomplish a few years ago, our portfolio of mines is now in a strong position to maintain production of 2.0Moz – 2.5Moz per year for the next 10 years without requiring expensive mergers or acquisitions.

More than just building a strong portfolio, Nick has established a Company that ensures its stakeholders share rightfully and meaningfully in the benefits of mining, while also delivering strong returns to the investors who have entrusted their capital to us. Gold Fields is an organisation with an unrelenting focus on the safety of its employees, its contractors and its communities. On his first day as CEO, Nick coined the phrase ‘If we cannot mine safely, we will not mine’. We have lived by this sentiment since then, ensuring it has become a mantra within Gold Fields and, perhaps, Nick’s most significant legacy.

Nick, you leave Gold Fields with the immense gratitude of the Board, your management colleagues and the Company’s employees. You truly deserve all the accolades bestowed upon you, and we wish you a well-deserved retirement.

 

LOGO

Cheryl Carolus

Chairperson

 

 

IAR-11


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

CHIEF EXECUTIVE OFFICER’S REPORT

 

LOGO   

“Our focus on organic growth, backed by consistent investment in near-mine exploration, has allowed us to map our own destiny to the benefit of our stakeholders.”

 

Nick Holland

 

DEAR STAKEHOLDERS

This past year will always be remembered as a time when Covid-19 caused major losses and upheavals to our personal lives while disrupting business-as-usual for many companies worldwide. Our experience at Gold Fields was no different, and, tragically, the pandemic took the ultimate toll on many of our people. As at 29 March 2021, 10 of our colleagues had tragically passed away due to Covid-19-related illnesses. My condolences go out to their families, friends and colleagues. Other colleagues were ill for weeks, and all of us had our personal and professional lives severely disrupted by the stringent regulations and protocols implemented to mitigate the worst impacts of the pandemic.

Following a second wave of infections around the world in early 2021, it seems inevitable that these disruptions will continue for some time to come. We are currently looking at strategies on how we can continue keeping our people safe and how to ensure we make vaccines available to them as soon as is practical. We are seeking advice from medical experts and are working with governments, industry forums and our peers on the best solution for a vaccine roll-out and an eventual return to business-as-usual.

Covid-19 inevitably affected the Company’s 2020 operational performance, albeit marginally. Attributable gold-equivalent production of 2.236Moz in 2020 was 2% higher than 2019 production and

within the revised guidance range of 2.200Moz – 2.250Moz. However, we had to revise our original 2020 guidance of 2.275Moz – 2.315Moz in May to take into account the 78koz lost due to Covid-19-related shutdowns at South Deep (32koz) and Cerro Corona (46koz).

All-in costs (AIC) for 2020 were US$1,079/oz, 1% higher than 2019 (US$1,064/oz) and within the revised guidance range. All-in sustaining costs (AISC) for the year were US$977/oz (2019: US$897/oz), again within the revised guidance range. These costs were slightly above the original 2020 guidance as our operations spent approximately US$30m on Covid-19-related initiatives and interventions. This includes investments in testing

 

 

GOLD FIELDS SHARE PRICE 2010 – 2020

 

During 2020, our share price on both the JSE and NYSE improved by 46% and 42% respectively, on the back of respective increases of 94% and 88% during 2019. While the shares have retreated from their record highs reached in August 2020, when the gold price hit its all-time high of US$2,070/oz, we are still offering shareholders substantive returns and healthy dividends. Shareholders who owned 1,000 Gold Fields shares on 1 January 2010, held on to the 1,000 Sibanye Gold stocks (now Sibanye-Stillwater) they would have been awarded after its unbundling in February 2013, would have been rewarded with a total return of 105% by 31 December 2020. That is an annual return of 7% on their investment.   LOGO

 

IAR-12


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR LEADERSHIP AND STRATEGY

   

    

 

 

equipment and facilities, specialised camp accommodation, additional labour costs and transport facilities. It also included donations to governments and host communities to assist them in their fight against the pandemic.

 

However, on the whole, Gold Fields managed these disruptions well and continued on its growth trajectory of the preceding years. The higher gold price – a consequence, in part, of the economic fallout from the pandemic – certainly helped. The average gold price of US$1,768/oz during 2020 was 27% higher than the average price received in 2019. But, equally important, our management teams dealt with the challenges of the pandemic extremely well, maintaining sustainable and profitable production while at the same time safeguarding the health and safety of our employees and contractors.

 

Our mines in Western Australia, which did not report any positive Covid-19 cases, exceeded 1.0Moz of gold production for the first time since 2015. Our Ghanaian operations, including the Asanko JV, boosted output by 3%. Even South Deep and Cerro Corona, which had to close or curtail mining and processing activities for several weeks due to government-imposed restrictions, reported stable production levels and lower costs during 2020.

 

Our 2020 financial performance reflected these solid operational efforts and higher gold price. Our mines generated cash-flow of US$868m (2019: US$552m), while net cash-flow reached a record US$631m (2019: US$249m).

 

 

OUR VALUE-CREATION STRATEGY

 

Gold Fields’ growth over the past 10 years has been driven by an integrated value-creation strategy aimed at delivering our vision of global leadership in sustainable gold mining. This strategy is captured in our BSC and comprises four overarching focus areas – organisational capacity, internal business processes, stakeholders and financial performance.

 

While our operating environment over the past decade saw some significant changes, we remained committed to these focus areas regardless of the challenges we faced and, in doing so, unlocked the potential of our globally diversified business. With the Group BSC at the centre of our strategy, we subsequently identified seven strategic pillars that drive our performance across the Company. Each pillar has specific key performance indicators linked to our BSC to ensure we create holistic and sustainable value for our stakeholders.

 

On p17 – 21, we look at each of these pillars in our strategic journey and track the key operational, financial, stakeholder and sustainability trends of the past 10 years.

 

The key corporate milestones in our strategic journey are highlighted in the share price graph below.

    

    

    

 

 

STRATEGIC PILLARS:

 

LOGO

 

LOGO

 

IAR-13


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020  
 

    

 

CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED

 

 

Net debt reduced by almost US$600m to US$1,069m, resulting in a net debt:EBITDA ratio of 0.56x at end-December 2020 (2019: 1.29x). Historically our target level for the net debt:EBITDA ratio has been around 1x. However, we have been opportunistically reducing our debt given higher gold price of late and could well be at or close to net zero within 18 months

Headline earnings increased more than four-fold to US$729m (2019: US$163m) and normalised profits more than doubled to US$879m (2019: US$343m). Shareholders received a total dividend of R4.80/ share, three times our distribution of R1.60/share in 2019. Our total value distribution to stakeholders increased to US$2,849m from US$2,577m in 2019.

The pandemic did not disrupt the continued improvements to the quality of our portfolio of mines and projects. Four years ago, and in contrast to the consolidation activities among our peers at the time, Gold Fields embarked on a US$1bn investment drive to ensure that our portfolio continued to generate cash sustainably by lowering AIC and extending mine life while preserving a sound balance sheet. In 2019, we saw the benefits of our investment programme for the first time in the form of improved profits and cash-flows, as well as lower costs. This trend continued strongly into 2020.

The key elements of the programme were essentially two new mines, Gruyere in Australia and the Damang Pit Cutback in Ghana, which contributed US$66m and US$76m respectively to Group net cash-flow in 2020. In 2018, we also acquired a 45% stake in the Asanko mine in Ghana for US$185m, with our JV partner Galiano Gold, which manages the mine, holding 45%, and the Ghanaian government the remaining 10%.

In February 2020, our Board decided to go ahead with the construction of the Salares Norte project in Chile, with construction proceeding as planned during the year, and set for completion in late 2022. Once operational, which is expected in 2023, Salares Norte is expected to add 450koz gold-

equivalent production per year for the first seven years at AIC of US$465/oz – one of the lowest in the industry. A successful equity raise of US$250m in February 2020 positions us to comfortably fund the project within our debt targets.

Another important element of our growth strategy was the continued investment in near-mine exploration at our Australian mines and, more recently, at Tarkwa and Damang in Ghana. As a result, we have been able to consistently replace and exceed the volumes of depleted Mineral Reserves. Over the past five years, since the December 2015 declaration, the Group has replaced 11.5Moz in depleted Reserves and added a further 4.5Moz through its successful exploration activities, technical studies and project investment. Gold Fields’ attributable gold-equivalent Mineral Reserves were 50.3Moz at the end of 2020, an increase of 2% from 2019, with our Australian mines replacing 8% of depleted Mineral Reserves.

The final pillar of our portfolio strategy was to set up our South Deep mine in South Africa for safe, sustainable and profitable production. While South Deep was the one in our portfolio hardest hit by Covid-19-related restrictions, it continues to report real progress and a strong financial and operational improvement. In 2019, South Deep stemmed its decade-long cash-burn by generating US$15m in net cash-flow. With 2020 production up 2% to 227koz and AIC unchanged at US$1,260/oz, net cash-flow improved even further, increasing by 123% to US$34m. My cautious optimism last year has been replaced by strong confidence that the mine is on the right track to generate long-term, sustainable cash-flows and profits.

I want to reiterate my statement from last year: Gold Fields is now a senior producer in the top 10 league of global gold miners both in terms of Reserves and production. We are in a strong position to maintain production of 2.0Moz – 2.5Moz per year for the

next 10 years, of which over 2.0Moz will be outside of our South African base. This is a level of production our mines in Ghana, Australia and Peru achieved in 2019 and 2020. Furthermore, once Salares Norte comes on stream, expected in 2023, we will have a portfolio of 10 mines – a size we consider optimal as it allows management to properly focus on operations.

As we have shown over the past few years, we do not require expensive mergers and acquisitions to achieve sustainable and profitable growth for our shareholders. Instead, our focus on organic growth, backed by consistent investment in near-mine exploration, has allowed us to map our own destiny to the benefit of our stakeholders.

ESG

Our commitment to safe production continues to underpin our operational performance. During 2020, we sought further improvements in terms of our safety leadership, processes, systems and culture. Tragically, we lost one employee at South Deep, Abel Magajane, after an underground mining incident. I would like to again express my condolences to his family.

We also reported six serious injuries (2019: four) across the Group. Our total recordable injury frequency rate (TRIFR) regressed to 2.40 per million hours worked (2019: 2.19). However, this remains below the industry norm of 3.20 (ICMM members – 2019 average). The physical distancing restrictions we imposed because of Covid-19 slowed down the roll-out of Courageous Safety Leadership (CSL) – our flagship safety programme – but we expect to complete this during 2021, having already trained over half of our employees.

One of the few positives emerging from the Covid-19 crisis has been the strong focus on the health of our employees and host communities. Safety has always been our number one value, but the pandemic forced us to give equal attention to the health and wellness of our people. Once the crisis is over, what we will retain going forward is the ability to test our workers for occupational and non-occupational diseases,

 

 

IAR-14


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR LEADERSHIP AND STRATEGY

   

    

 

 

as well as understanding their mental wellbeing, and support them through any recovery processes.

Furthermore, the pandemic served as a catalyst to work more cooperatively with our key stakeholders — trade unions, communities, industry peers and governments. With Covid-19 threatening the livelihoods of employees and the tax income of governments, we found more common ground with these stakeholders. In most of the countries where we operate, governments declared mining an essential service, allowing us to continue operating when other sectors’ activities were curtailed. In return, we and other mining companies actively supported governments by providing facilities, health resources and much-needed funding. During 2020, our mines donated well over US$3m in medical and sanitary equipment and other services to host communities and governments.

In 2020, we continued to focus on driving our in-country and host community economic impact. Of the US$2.85bn in value created during 2020 (2019: US$2.58bn), US$676m, or 28%, remained in our host communities through wages, procurement spend and investments in socio-economic development. Approximately 53% of our workforce, 8,752 people, are employed from our host communities. In addition, we created 672 (2019: 504) non-mining jobs through our community investment programmes. Over the past five years, we have created between US$600m – US$800m in community value every year. Cumulatively, this amounts to over US$3.54bn which, we believe, presents a significant investment in the economic wellbeing of our host communities and their estimated 435,000 residents.

This year, we strengthened our commitment to diversity and inclusivity among our workforce. We aim to have a workforce profile that reflects the demographics of the countries and communities in which we operate. While we have made progress in this regard – particularly at South Deep, where Historically

Disadvantaged South Africans (HDSAs) now comprise 73% of the workforce, and women 23% – we are falling short when it comes to broader gender diversity across the Company. Only 20% of our Group workforce and leadership teams are women.

During 2020, we rolled out a Group diversity and inclusion dashboard that not only measures the representation of women at all levels in the Company but also evaluates lead indicators in the areas of inclusivity, recruitment, talent management, employee retention and corporate culture. As we improve these lead indicators, we believe that more women will join and remain at Gold Fields.

Climate change is undoubtedly one of the defining global challenges society is facing today. Gold Fields has made considerable progress in mitigating our contribution to climate change. Our efforts are led by energy savings and efficiency initiatives, which enabled us to save 804kt CO2e in emissions over the past six years – with the added benefit of cost savings for our operations.

Similarly, our recent investment in renewable energy projects not only secured stable and cost-effective energy supplies for our mines, but also reduced their carbon emissions. During 2020, we commissioned renewable microgrids, supported by battery storage, at our Agnew and Granny Smith mines in Australia. Agnew became the first gold mine in the world to derive over 50% of its power from renewable energy sources, mostly wind turbines supported by a solar plant and low-carbon gas. We have furthermore advanced plans to introduce renewables at Gruyere and St Ives, as well as Salares Norte when it starts operating in 2023.

In February 2021, South Africa’s national regulator approved the electricity generation licence for South Deep’s 40MW solar plant, following a three-year application process. Once approved by the Board, construction of the plant is set to take a year. The project will provide up to 20% of South Deep’s average electricity consumption and significantly reduce the mine’s carbon emissions.

Haulage diesel for our mining fleet accounts for half of the Group’s energy consumption. We are increasingly focusing on initiatives to reduce this, such as diesel-gas hybrid vehicles and, more ambitiously, looking at ways to introduce electric vehicles underground. Through the International Council on Mining & Metals (ICMM), we are working with our peers and equipment manufacturers to accelerate the development of electric vehicles for our primary fleet which, once rolled out, will have the added benefit of markedly reducing Diesel Particulate Matter (DPM) emissions from underground operations.

We have also improved our transparency around climate change issues by aligning our reporting with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We published our third TCFD-aligned Climate Change Report in conjunction with this IAR.

Sound management of water resources is another critical issue that has taken on renewed urgency as the climate changes, particularly in South Africa, Peru, Chile and Australia, which are water-stressed countries. Water is, of course, also a critical input for our processing activities. We have no option but to use water efficiently, which requires that we reduce our demand for freshwater from surrounding catchment areas. We set two key targets to ensure we efficiently manage our water usage. These are, firstly, reducing freshwater use by 3% – 5% a year and, secondly, recycling and reusing at least 70% of our water. We achieved both targets during 2020.

Our commitment to responsibly use our water resources is integral to sound environment stewardship at our operations. During 2020, for the second consecutive year, Gold Fields again recorded no serious environmental incidents. This is an important achievement, as environmental incidents could also potentially impact the communities around us and our social licence to operate.

The mining industry’s environmental practices have been in the spotlight

 

 

IAR-15


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED

 

following the catastrophic collapse of the tailings storage facility (TSF) at Vale’s Córrego do Feijão iron ore mine near Brumadinho, Brazil, in January 2019, which killed 270 people. Subsequent to this tragedy, ESG-focused investors and the United Nations (UN) Environment Programme engaged the industry through the ICMM to develop a new standard for managing tailings. In August 2020, the parties officially launched the Global Industry Standard on Tailings Management (GISTM), strengthening current practices by integrating social, environmental, economic and technical considerations. ICMM members have until August 2025 to fully implement the standard at all their TSFs, but all facilities that have high-potential consequences will have to conform to the standard two years earlier. Gold Fields is set to complete a gap analysis at its 37 TSFs by mid-

2021, after which we will commence work to close all identified gaps.

ESG CHARTER

Over the past decade, Gold Fields has integrated environmental, social and governance issues into the operational management of our mines and projects. Managing safety has always been an operational responsibility.

In recent years, successfully managing ESG issues has become a critical consideration for our stakeholders, particularly investors, who increasingly expect that we transparently disclose the impact of and how we manage ESG, as well as whether these align with Gold Fields’ strategy. Many of our peers have committed to performance targets, especially on climate change.

To date, Gold Fields has mostly used internal objectives to guide the

ESG work we do at our operations. We have decided to integrate high-level priorities into an ESG Charter to drive longer-term goals and are finalising detailed targets for implementation by 2025. These targets will be released later in 2021.

As we have for some time, we will again be including ESG-linked performance targets in the Group’s Balanced Scorecard (BSC) for this year (see p26) and in the long-term, three-year incentive plans for our senior employees (see our Remuneration Report in the AFR on p26 – 54).

Our ESG priorities are associated with wide-ranging objectives and strategic intents, including some previous public commitments. These are outlined in the table below, with details provided in the respective sections in this IAR:

 

 

GOLD FIELDS STRATEGIC ESG PRIORITIES

 

  Strategic priorities    Objectives             Strategic intents    Details
        

Partnering to ensure the safety, health and wellbeing of our workforce and alleviating such impacts on our communities

   Eliminating fatalities, serious injuries, illnesses and mental harm that could arise from our mining activities   

1.   Zero fatalities and serious injuries at our operations

 

2.   Eliminate vehicular incidents by implementing advanced collision avoidance technologies

 

3.   Significantly reduce underground exposure to DPM

 

4.   Minimise health and environmental impacts on our host communities

  

p51

 

p52

 

 

p54

 

p89

Build a diverse and inclusive workplace

   Increase the proportion of women and Indigenous People in our workforce   

5.   Increase the proportion of women in our workforce, including women in leadership and women in mining in all our operating regions

   p59
       

Unlocking business, community and stakeholder value

   Maximise in-country and host community employment and procurement   

6.   Maximise Group host community employment

 

7.   Maximise Group host community procurement spend

 

8.   Maximise Group in-country procurement

  

p85

 

p84

 

p84

Pursuing decarbonisation and building resilience to climate change in line with our commitment to the Paris Agreement for a just transition to net-zero carbon emissions

   Reduce carbon emissions, freshwater use and exposure to climate-related risks to operations, stakeholders and the environment   

9.   Continue pursuing carbon emissions reductions at all our operations

 

10.  Increase Group renewable energy use and include at least 20% renewables in all new projects

 

11.  Introduce electric vehicles in our underground operations

 

12.  Reduce freshwater use and optimise Group water recycling and reuse levels

  

p100

 

p101

 

 

p73

 

p99

       

Full compliance with the 2020 Global Industry Standard on Tailings Management

   Safe and responsible tailings management   

13.  Achieve and maintain compliance with the GISTM as committed to by ICMM members

   p103

 

IAR-16


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR LEADERSHIP AND STRATEGY

   

    

 

 

EXTERNAL ENVIRONMENT

Of the external strategic dynamics that inform Gold Fields’ decision-making and influence our business performance, the gold price is the most significant. During 2020, the gold price continued the upturn that started early in 2019, when gold was trading at around US$1,300/oz. The metal traded at US$1,530/oz at the beginning of 2020, and hit an all-time high of US$2,070/oz in August before easing back to around US$1,800/oz at year-end and US$1,700/oz in March 2021. The average gold price received by our mines during 2020 amounted to US$1,768/oz, a 27% increase from the US$1,388/oz received in 2019.

The fluctuating gold price reflects the volatile external environment amid global economic and political uncertainties and, above all, the impact of Covid-19. Drivers supporting gold include increasing global debt, an expectation of higher inflation in key economies, continued low rates of interest, central bank support and continued geopolitical risks. This is tempered by reduced fabrication and jewellery demand for the metal.

While much of the gold price’s short-term movement is driven by market sentiment and geopolitical developments, gold’s role as an investment medium is still as relevant today as it has been for decades. Furthermore, primary supply appears to have peaked and years of underinvestment in the industry have set the scene for flat to lower gold production even in the face of higher prices. Mine supply, which in 2019 showed its first decline in 10 years, continued to decrease by 4% during 2020 according to the World Gold Council. 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 over recent years. This could influence gold positively in the longer term.

We believe that capital expenditure in the industry has to increase, with companies needing to invest in new

 

projects and exploration activities to maintain current production levels. In our assessment, the recent spate of consolidation in the industry is a response to the under-investment in capex in recent years even in the wake of higher gold prices.

Gold Fields does not seek to predict the gold price. We expect volatility and structure our business accordingly to achieve a 15% FCF margin around a planning gold price of US$1,300/oz. Beyond that, we seek to maximise value by:

  Prioritising cash-flow over production volumes
  Eliminating marginal mining
  Hedging a portion of our gold production in times of high capex and debt

Therefore, we believe the Group is in a relatively strong state to weather a sustained lower gold price at just over US$1,000/oz, and well positioned to capture the upside of the higher price as we did in 2020.

Other external dynamics that impacted Gold Fields during 2020 were:

  The Covid-19 pandemic – see p53, 57 and 87
  Resource nationalism – see p92
  Social licence to operate – see p82

OUTLOOK FOR 2021

This year will see another big capital investment for Gold Fields, with total capital expenditure (capex) guidance of US$1,177m for the year, of which US$538m is sustaining capital. Of the US$639m in project capital, US$508m will be allocated to Salares Norte, which is expected to be 70% complete by end-2021. Salares Norte will have a significant impact on Gold Fields’ long-term production and cost profile, as the mine will be producing 450koz gold-equivalent production per year for the first seven years at AIC of US$465/oz – one of the lowest in the industry.

In 2021, Group attributable production is expected to be higher at 2.30Moz – 2.35Moz. Given the high capital spend, AIC is set to be between US$1,310/oz – US$1,350/oz. Excluding capital spend on Salares Norte, we expect AIC of US$1,090/oz – US$1,130/oz. AISC is guided at US$1,020/oz – US$1,060/oz.

The main drivers behind production and cost guidance for 2021 are:

  A 27% increase in production at South Deep to 290koz. The mine’s management team has a clear understanding of the operation and the different activities in the mining value chain. Looking beyond 2021, we are confident that a further 20% – 30% can be added to production levels over the next four years
  Damang is moving into the heart of the Damang pit ore body. As such, the mine is guiding 23% higher production at 275koz and at significantly lower AIC of US$790/oz (2020: US$1,035/oz)
  Following its first full year of production during 2020, the Gruyere team is meeting production and processing targets. For 2021, the mine is guiding for production to increase by 9% to 280koz (100% basis)

The risk of stoppages due to Covid-19 has not been factored into any guidance estimates and the extent of Covid-19 impacts on either production or costs is indeterminable at this stage.

Gold Fields’ 2021 business plans are based on an average gold price of US$1,600/oz (A$2,100/oz, R900,000/kg).

NOTE OF THANKS

By the time you read this, I will have officially departed as Gold Fields’ CEO, and Chris Griffith would have stepped into the position on 1 April 2021. I want to welcome Chris to the Company and assure him that he is leading an organisation that is sound, sustainable and imbued with the right values. Above all, he will be working with a formidable group of people and can take comfort in the knowledge that this team will be behind him as he leads Gold Fields into the future.

I have been with Gold Fields in a leadership position since it was formed through the merger of Gold Fields of South Africa and Gencor’s gold assets in late 1997. My first 11 years were spent as CFO and, since 2008, I served as the Company’s CEO. It has been an eventful and sometimes tumultuous journey but, above all, enormously rewarding and humbling.

 

 

IAR-17


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

CHIEF EXECUTIVE OFFICER’S REPORT CONTINUED

 

The Gold Fields of today is unrecognisable from the company we founded 23 years ago. Most notably, the Company has expanded into a more global and modernised operation, while still retaining its roots in South Africa. I can honestly say with confidence that our current portfolio of mines is well positioned to create financial and economic benefits for its stakeholders on a standalone basis for years to come.

I am equally proud of the changes we instilled relating to our people, external stakeholders – particularly our host communities – and the environment we impact. The Company has an unshakable commitment to sustainability and our stakeholders are accruing real value from our mining activities. Environmental stewardship also enjoys a high priority among our management teams.

Our achievements would not have been possible without the full backing of the people of Gold Fields. I had the pleasure of meeting and getting to know as many of you as I could during my travels across the regions. Each and every one of you has made a valuable contribution to the success

of our Company. While we have jointly experienced some difficult times over the past few years, including wide-ranging restructuring initiatives and the Covid-19 pandemic, I believe we have emerged from them stronger. I extend my most sincere gratitude to you, my colleagues, recognising your commitment, resilience and expertise.

I have naturally worked more closely with some of you more than others. Paul Schmidt, our CFO, has been my right-hand man from the day I took over as CEO. He has always been a voice of financial reason, for which I continue to be extremely grateful. I also relied heavily on the members of the Company’s Executive Committee, who guided and advised me in managing a complex multinational organisation.

Finally, I would like to express my sincere gratitude to my fellow directors over the past 26 years. As CFO and CEO, I have had the privilege of working with a number of visionary Chairpersons: Brian Gilbertson, Alan Wright, Dr Mamphela Ramphele and, over the past eight years, Cheryl Carolus. They each provided valuable oversight and effective governance, while mapping

the strategy that led to Gold Fields’ successful transformation. I want to express a special note of gratitude to Rick Menell, who has been on the Board since I took over as CEO in 2008. His guidance on our corporate transactions and strategy in particular, has been invaluable over these years.

I leave Gold Fields with one major regret – that we still record fatalities and injuries at our operations. On the day I took office as CEO on 1 May 2008, nine miners at South Deep died when the cage they were being transported in plummeted down a shaft. At the end of that year, we reported an unfathomable 47 deaths. I have prioritised safe production by making safety our number one value. While our safety performance has significantly improved since then, even last year we still recorded one fatality and six serious injuries. Our goal of achieving zero harm proved to be elusive during my tenure, but I sincerely believe we have built the foundations to achieve this in the imminent future.

 

LOGO

Nick Holland

CEO

 

 

MESSAGE FROM THE INCOMING CEO

As I step into the CEO role at Gold Fields, I want to first and foremost acknowledge the great work done by Nick Holland, his management team and all the employees at the Company.

It is a credit to Nick that, since he took over in 2008, the Company has been fundamentally transformed from a South Africa-centric and labour-intensive operation to one that is global, sustainable and ethical. It is a company I believe embodies global leadership in sustainable gold mining.

The strong performance and reputation of the Company is built on a number of pillars, and, together with the corporate and regional management teams, I plan to build on these successes.

These include the work Gold Fields has done in the area of sustainability, spearheaded by an uncompromising commitment to safety and health. But it also includes the Company’s

environmental stewardship, particularly its roll-out of renewable energy, and its ground-breaking work on community value creation through host community employment and procurement.

On the operational front, all the mines are at present contributing positively to the Group’s cash-flow and investing in their longevity by replacing depleted Mineral Reserves and Resources. The Group’s longer-term sustainability is ensured with the prospective, low-cost Salares Norte project in Chile, currently under construction.

There is clearly always room for improvement and I will be working with the teams on enhancing their financial and operational excellence, including further implementing innovation and digital technologies to improve safety, costs and efficiencies.

Not surprisingly, many stakeholders want to know if I will fundamentally change the strategy or portfolio of the Company. I will take my time to

LOGO

fully understand the business, its operations and the leadership team before taking a closer look at these wider strategic issues. Having said that, the gold market is very dynamic at the moment and it would be remiss of us not to be alert to opportunities that may add shareholder value.

Taking over the helm at Gold Fields is a great opportunity – and challenge. I look forward to working with one of the industry’s leading teams to build on the foundation laid by Nick. I want to thank him again for his leadership and wish him well in his retirement.

Chris Griffith

Incoming CEO

 

 

IAR-18


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OVERVIEW OF STRATEGIC PILLARS

   

    

 

SAFETY AND WELLBEING OF OUR PEOPLE

 

LOGO

 

Safety is Gold Fields’ number one value, and our operations continue to mine only as long as it is safe to do so. Over the past decade, we made significant progress in our efforts to eliminate all fatalities and serious injuries at our operations. Unbundling our labour-intensive legacy South African gold mines to Sibanye Gold (now Sibanye-Stillwater) in February 2013 immediately reduced both the number of fatalities at our operations and our TRIFR, the foremost indicator used in the global mining sector to measure safety performance. However, since then, we continue to record at least one fatality every year, as we did in 2020. We also recorded six serious injuries during 2020.

Over the past few years, all our mines have transitioned to the ISO 45001 safety management system that enables an integrated approach to health and safety management. Furthermore, safety management informs the annual performance bonuses of our executives, managers and the broader workforce.

In 2018, we formed a Group Safety Leadership forum and introduced

a range of programmes to drive the right behaviours across our business. First among them is our CSL programme, which aims to equip our employees with the practical tools needed to become safety leaders. Over 50% of our employees completed the CSL programme and, once this programme has been rolled out to all employees, we plan to extend our Australian behaviour-based programme, Vital Behaviours, throughout the Group. We are simultaneously implementing a range of new technology systems to enhance our employees’ safety, including people tracking, collision avoidance and traffic management.

Over the past 10 years, we have steadily intensified our efforts to prevent occupational diseases and health issues that impact our workforce. These include health risks associated with Noise-Induced Hearing Loss (NIHL), DPM, Silicosis and Tuberculosis (TB). We comply with all occupational health regulations and, in countries where regulations have not been promulgated, we follow industry best practice standards.

 

 

2020 PERFORMANCE

 

Recorded one fatality (2019: one)

and six serious injuries (2019: four)

 

TRIFR regressed to 2.40 per million hours worked (2019: 2.19)

 

Recorded 10 Covid-19-related deaths among our employees

(up to 29 March 2021)

 

Rolled out extensive Covid-19 intervention programmes

 

CSL programme rolled out to 50% of employees

 

First pay-outs to ex-mineworkers suffering from Silicosis in South Africa made from the Tshiamiso Trust

 

Developed a Group health guideline

 

LOGO For more details on our 2020 performance, refer to p50 – p55.

    
    

The Covid-19 pandemic has further highlighted the impact of non-occupational diseases on our business. Our operations in Ghana and South Africa have long assisted our employees in dealing with Malaria and HIV/Aids, among others, and our approach to mitigating the effects of Covid-19 was no different. More recently, our operations have also introduced programmes to prevent and mitigate risks associated with mental health issues among our people.

 

 

SAFETY TRENDS FROM 2010 TO 2020

    

LOGO

 

IAR-19


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

DEVELOPING A FIT-FOR-PURPOSE WORKFORCE

 

 

LOGO

 

As Gold Fields evolved over the past 10 years, so has our workforce profile. The most notable manifestation of the Sibanye Gold unbundling was the dramatic decrease in our workforce by about 30,000 people. Another feature of the past decade is increased modernisation at all our mines, which has required a change in the skills level of our employees. It has therefore become critical that we repositioned ourselves to build a pipeline of talent that will strengthen the sustainability of the Group.

Attracting and retaining the right skills starts with competitive, market-related and performance-based remuneration while also embracing modern working practices, such as flexible work arrangements. More than this, however, it also requires continued investment in training and development to meet the future needs of an increasingly mechanised, modernising and automated mining industry. We are also responsible for ensuring a safe and healthy workplace for our people, and for being a company they can be proud of by investing in the sustainability of our operations and the welfare of the communities we impact.

Our workforce profile has also changed in other ways. As at end-2020, contract workers across our regions accounted for about two-thirds of our total workforce. This necessitates close contractor management and ensuring that contractors align with Gold Fields’ values, policies and procedures – particularly those relating to safety, human rights and environmental management.

A second defining trend over the past decade has been the increased focus on host community employment. Members from our host communities now make up over half of our workforce, which aligns with our strategy of creating value for the communities in the regions where we operate.

Finally, our workforce has become more diverse and transformed – particularly in South Africa, where Historically Disadvantaged Persons (HDPs) are increasingly assuming a larger share of leadership positions. However, we recognise that we still have a long way to go before our workforce fully reflects the varying

 

 

2020 PERFORMANCE

 

Improved gender diversity – women comprise 20% of our global workforce, of which 50% are women in mining and 21% are in leadership

 

86% of employees are nationals of the regions in which we operate

 

US$676m of our value created remained with our host communities

 

53% of our employees are from our host communities

 

73% of the total workforce at South Deep are HDSAs

 

LOGO For more details on our 2020 performance, refer to p50 – p59.

    
    

demographics of the countries in which we operate. To achieve this, we need to address unconscious bias in the workplace, capitalise on the value diverse perspectives bring to Gold Fields, and attract candidates from underrepresented backgrounds and host communities. While our definition of diversity extends beyond gender alone, we are aware that women only account for 20% of our employees across the Group and, therefore, enhancing gender diversity is a key focus area going forward.

 

WORKFORCE BY GROUP AND REGION (end-December)

 

     Total workforce     Employees      Contractors      Proportion of    
Nationals1     
 
                 2020                  2010                 2020                  2020                  2020      
             

Americas

     4,268        346       568        3,700        98%      

Australia

     2,998        562       1,668        1,330        78%      

South Africa

     4,027        43,822 2      2,226        1,801        84%      

West Africa

     7,003        2,538       1,063        5,940        99%      

Corporate

     116        98       116        0        75%      

Total

     18,412        47,268       5,641        12,771        86%      

1 Employees only (not contractors)

2 Workforce pre-Sibanye unbundling

 

IAR-20


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OVERVIEW OF STRATEGIC PILLARS

   

    

 

CREATING A GLOBAL, SUSTAINABLE PORTFOLIO

 

 

LOGO

 

Gold Fields’ overriding strategic objective is to improve the quality of its portfolio by lowering Group AIC, thereby increasing our free cash-flow (FCF) to create value for our stakeholders. To achieve this, we employ various elements in the portfolio management process, including:

  Acquiring or developing lower-cost (than Group average), longer-life assets
  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
  Disposing of higher-cost, shorter-life assets

All assets in our portfolio are subject to the Group’s annual strategic planning process, which assesses how each operation can best maximise cash-flow, life-of-mine and margin.

The composition and geographic distribution of Gold Fields’ portfolio

of assets fundamentally changed in 2013. The most significant changes were the unbundling of the legacy South African gold mines into Sibanye Gold in February 2013, as well as the acquisition of the Yilgarn South Assets (Darlot, Granny Smith and Lawlers) from Barrick Gold in Western Australia during October of that year. Before this, our South African assets accounted for 50% of total production. Now, our Australian mines comprise just under half of our portfolio.

We have been on an investment drive since 2017 to improve the sustainability of our production base. During this time, we invested US$347m into the Damang Reinvestment project, spent A$350m to acquire 50% of the Gruyere project and A$329m to build the mine, paid US$185m for a 45% interest in the Asanko mine in Ghana, and invested US$13m to restructure South Deep. Furthermore, in 2020, our Board gave the go-ahead for construction of the US$860m Salares Norte mine in Chile after spending US$161m in the preceding four years on project and exploration costs.

 

 

2020 PERFORMANCE

 

Achieved the first full year of production at Gruyere

 

Damang Reinvestment project bearing fruit

 

Commenced construction of the Salares Norte project in Chile

 

Invested US$50m in near-mine exploration, mostly at our Australian mines

 

South Deep recovery continues

 

Increased Mineral Reserves to 52.1Moz

 

LOGO For more details on our 2020 performance, refer to p60 – p67.

    
    

We promote the sustainability of our portfolio by investing in near-mine exploration, which averaged between US$50m – US$80m a year over the past five years. Since 2013, our Mineral Reserves position has remained relatively stable at around 50Moz as our successful exploration drives have replaced and exceeded the volumes of depleted Mineral Reserves.

Now, Gold Fields has a portfolio of nine mines and one project. We believe that a portfolio of no more than 10 mines is optimal, allowing management to properly focus on operations and maintain safe and profitable production of between 2.0Moz – 2.5Moz per year for the next 10 years.

 
ATTRIBUTABLE GOLD-EQ PRODUCTION    ATTRIBUTABLE GOLD-EQ MINERAL RESERVES
  
LOGO    LOGO

 

IAR-21


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

PROFITABLE PRODUCTION AND SUSTAINABLE CASH-FLOW

 

 

LOGO

 

The core focus of Gold Fields’ strategy is to grow its FCF margin and sustain this in the long term. Therefore, when looking at growth within Gold Fields, we focus not on increasing our levels of production, but rather on reducing Group AIC, increasing the FCF margin per ounce of gold produced and sustainably extending the average reserve life per operation. The Group targets an FCF margin of at least 15% at a notional long-term planning gold price of US$1,300/oz. This provides a degree of downside resilience should the price decline below that level in the short term. At the same time, it means we can improve our margins should the gold price exceed that level – which has been the case for the last two years.

Our progress towards our target is supported by the gradual decline

of Group AIC to below US$1,100/ oz over the past few years. In Q4 2012 – the last quarter before the Sibanye Gold unbundling – Group AIC amounted to US$1,621/oz. All the while, our production levels held steady at around 2.20Moz.

The improved cost performance at stable production levels and the higher gold price received, as well as the gradual easing of our capex programme, ensured that net cash-flow from operating activities improved steadily over the past few years, culminating in inflows of US$631m in 2020. This translated into an FCF margin of 28% at a gold price of US$1,771/oz, meaning that we successfully exceeded our 15% target for four consecutive years. During 2021, our US$508m capex programme at Salares Norte will push up AIC temporarily.

 

 

2020 PERFORMANCE

 

Achieved revised production and cost guidance for the year

 

Limited the impact of Covid-19 on production to 3% of original guidance

 

South Deep achieved record cash- flow of US$34m (2019: US$15m)

 

Produced 1.0Moz at our Australian mines, with Gruyere contributing for the full year for the first time

 

Australian region tripled its net cash-inflow to US$498m

 

Cerro Corona’s gold-equivalent production declined by 29%

 

Damang continues to build-up production and lower AIC

 

LOGO For more details on our 2020 performance, refer to p68 – p73.

    
    

 

 

GROUP AIC AND CASH-FLOW TRENDS FROM 2012 TO 2020

 

LOGO

 

IAR-22


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OVERVIEW OF STRATEGIC PILLARS

   

    

 

CAPITAL ALLOCATION AND SOUND BALANCE SHEET MANAGEMENT

 

 

LOGO

 

Our priorities for the free cash-flow (FCF) we generate are:

 

  Strengthening the balance sheet: At the height of the growth capital cycle at the end of 2018, the Group’s net debt:EBITDA (excluding lease liabilities) peaked at 1.45x. With Gruyere and Damang now at or approaching steady state, we have used the free cash generated in 2020 to reduce net debt further and strengthen our balance sheet
  Funding growth projects: Capex for the Salares Norte project in Chile is planned to total US$860m (in 2020 terms), a portion of which will be funded from cash-flow. Apart from the Salares Norte project, there is no major growth capital budgeted for the medium term

 

  Returning dividends to shareholders: Gold Fields has a long and well-established Dividend Policy of paying out between 25%

– 35% of normalised earnings to shareholders. During 2020, Gold Fields declared a total dividend of R4.80/share, which translates to 30% of normalised earnings

Gold Fields’ Hedging Policy allows for hedging to protect cash-flows, firstly, at times of significant capex, secondly, to address specific debt servicing requirements and, thirdly, to safeguard the viability of higher-cost operations. We do not enter into long-term systematic hedges, but do determine whether short-term hedging is appropriate.

Given the high levels of project capital incurred over the past three years, the Group has run an active hedging programme using short-term hedges to protect our cash-flow and balance sheet. These gold, copper, oil and foreign exchange hedges resulted in a net realised loss of US$417m in 2020.

 

 

2020 PERFORMANCE

 

Continued reduction in net debt to US$1,069m (2019: US$1,664m)

 

Excluding lease liabilities, net debt totalled US$640m at end-2020

 

Net debt:EBITDA ratio of 0.56x (2019: 1.29)

 

Total dividend payment of R4.80/ share (2019: R1.60/share)

 

Loss on gold, copper, oil and foreign exchange hedges of US$239m

 

Successful US$249m equity raise to fund Salares Norte construction

 

LOGO For more details on our 2020 performance, refer to p74 – p80.

    
    

With the project capital having largely been spent by mid-2019, the purpose of the hedging programme shifted to servicing debt, with management paying down almost US$600m during 2020 and the net debt:EBITDA ratio falling substantially below 1x. Gold Fields is generally active in the debt markets through a range of instruments to further improve the liquidity and profile of Group debt.

 

DEBT AND DIVIDEND TRENDS FROM 2010 TO 2020

 

LOGO

 

IAR-23


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

VALUE CREATION FOR STAKEHOLDERS

 

 

LOGO

 

The mining industry significantly impacts the countries and communities in which it operates. For Gold Fields, the stakeholders most material to our business are those who have a substantial influence on our ability to create value or secure our regulatory licenses, and those in our host communities who can influence our social licence to operate. We build relationships that are open, transparent and constructive, and actively engage with our key stakeholders on the issues they care about the most at the local level.

It is important that our local stakeholders receive material, real benefits from the mining activities taking place in their midst. Since 2013, our total value creation has ranked between US$2.4bn – US$3bn a year in the form of payments to suppliers, salaries and wages to employees, taxes and royalties to governments, dividend and interest payments to capital providers, as well as investments in socio-economic development (SED) in our host communities.

In addition, Gold Fields continues to focus on maximising in-country economic

 

impact. Of our procurement spend, 96% is to in-country suppliers, while, on average, 86% of our employees are in-country nationals.

In recent years, our host communities have emerged as the most critical stakeholder for our mines, and their success is essential for our operational sustainability. By creating jobs among our workforce for host community members, procuring goods and services from host community enterprises and investing in community projects, we deliver enduring value, while contributing to our communities’ social and economic growth and development. Our performance during 2020 illustrates this:

  Along with our contractors, we employed 8,752 people, or 53% of our workforce, from host communities
  Host community procurement amounted to US$536m, or 29% of total spend
  Our investment in SED projects in our host communities totalled US$17m, and also created 672 non-mining jobs

Our initiatives ensured that US$676m, or 28% of our total value creation, remained with our host communities in 2020. In 2015, before we commenced our

 

 

2020 PERFORMANCE

 

Total value created for our stakeholders amounted to US$2.85bn (2019: US$2.58bn)

 

Provided over US$3.3m in support of governments’ and communities’ Covid-19 programmes

 

Of our total value created, US$676m remained with our host communities

 

Achieved a strong share price performance, and paid R4.80/share in dividends

 

Payments to governments amounted to US$381m (2019: US$254m) in the form of taxes and royalties

 

Payments to business suppliers totalled US$1,786m (2019: US$1,744m)

 

Paid a total of US$412m in wages and benefits to our employees (2019: US$395m)

 

Published our first Report to Stakeholders

 

LOGO For more details on our 2020 performance, refer to p81 – p95.

    
    

community value-creation programme the following year, total community value distribution amounted to a mere US$16m, as we did not actively promote or measure host community employment and procurement. Our cumulative host community value creation from 2016 – 2020 was US$3.54bn. This is a shift in approach from community contribution to delivering enduring value to our stakeholders.

    

 

IN-COUNTRY EMPLOYEE AND HOST

COMMUNITY WORKFORCE

  

IN-COUNTRY AND HOST COMMUNITY

PROCUREMENT SPEND

  

HOST COMMUNITY VALUE CREATION

RELATIVE TO SED SPEND

     
LOGO    LOGO    LOGO

 

IAR-24


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OVERVIEW OF STRATEGIC PILLARS

   

    

 

ENVIRONMENTAL STEWARDSHIP

 

 

LOGO

 

Gold Fields is committed to responsible environmental stewardship. The conservative use of water and energy resources by our mines is not only critical for them to remain effective, but also to limit the impact of our usage on the surrounding communities and environment. To facilitate this, Gold Fields strictly adheres to all local legislation and regulations, and is guided by a number of leading external standards. We have developed several Group environment-related policies – relating to environmental stewardship, climate change, materials and supply chain stewardship, water stewardship and tailings management – as well as a range of related guidelines.

Water is a key focus area of our environmental strategy. Not only is it becoming an increasingly scarce and expensive resource globally, but we also draw water from the same catchment areas as our local communities. In countries like Peru and Chile, for example, water management has become a key

source of friction and conflict between mines and their host communities.

A reliable and cost-efficient supply of energy is equally critical to our operations. Apart from labour, energy is the biggest operational cost at our mines. It is therefore critical that we use energy efficiently, as it is also a significant contributor to our carbon footprint in the form of Scope 1 and 2 emissions. The negative physical impacts of climate change are real and immediate, due to:

  The long-term risks posed to our operations and surrounding communities because of extreme weather events, such as severe rainfalls and prolonged droughts
  Increasing efforts to regulate carbon emissions in most of our jurisdictions
  Taxes on non-renewable energy consumption increasingly being imposed by governments

As such, Gold Fields’ climate change programme specifically focuses on energy management programmes to reduce emissions and energy costs, including the use of renewable

 

 

2020 PERFORMANCE

 

Experienced no serious (Level 3 – 5) environmental incidents for the second consecutive year

 

Ranked within the top five in the DJSI for the 10th straight year

 

Spent US$257m on energy usage (2019: US$300m)

 

Increased energy consumption by 5% to 13,129TJ (2019: 12,498TJ)

 

Achieved 80% of the 2017 to 2020 emissions reduction target of 800kt CO2e

 

Launched renewable energy microgrids at Agnew and Granny Smith

 

Started implementation of the new GISTM to be completed by 2025

 

Recycled/reused 71% of our total water consumption, which is above ICMM targets

 

93% of progressive rehabilitation plans implemented

 

LOGO For more details on our 2020 performance, refer to p96 – p103.

    
    

energies and increasing the reuse and recycling of water. We integrate assessment of climate-related risks and opportunities in project studies, as well as operational and strategic planning.

 

 

CO2 INTENSITY    ENVIRONMENTAL INCIDENTS
  
LOGO    LOGO

 

IAR-25


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

GROUP SCORECARDS

WE ARE COMMITTED TO ACHIEVING OUR VISION OF BEING THE GLOBAL LEADER IN SUSTAINABLE GOLD MINING. OUR STRATEGY IS DESIGNED TO ENABLE THE DELIVERY OF THIS VISION THROUGH AN INTEGRATED APPROACH. OUR STRATEGY, WHICH COMPRISES FOUR PILLARS – ORGANISATIONAL CAPACITY, INTERNAL BUSINESS PROCESSES, STAKEHOLDERS AND FINANCIAL PERFORMANCE – IS FURTHER INFORMED BY OUR DEDICATION TO OPERATIONAL RESILIENCE, DEBT REDUCTION AND INTEGRATED THINKING. THE INFOGRAPHIC BELOW SHOWS HOW WE PERFORMED AGAINST OBJECTIVES SET IN THE GROUP 2020 SCORECARD.

 

LOGO

 

IAR-26


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR LEADERSHIP AND STRATEGY

   

    

 

 

LOGO

 

IAR-27


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

GROUP SCORECARDS CONTINUED

THE INFOGRAPHIC BELOW SHOWS THE KEY OBJECTIVES UNDER OUR GROUP 2021 SCORECARD

 

LOGO

 

IAR-28


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR LEADERSHIP AND STRATEGY

   

    

 

 

LOGO

 

IAR-29


Table of Contents

LOGO

 

IAR-30


Table of Contents

LOGO

 

    

  3.1    OUR BOARD OF DIRECTORS P32 – 34   
  3.2    HOW WE GOVERN OUR BUSINESS P35 – 37   
  3.3    OUR BUSINESS MODEL P38 – 39   
  3.4    STAKEHOLDERS AND VALUE CREATION P40 – 42   
  3.5    MATERIAL MATTERS P43   
  3.6    RISKS AND OPPORTUNITIES P44 – 46   

 

 

 

IAR-31


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

OUR BOARD OF DIRECTORS

As the Company’s highest governing body, the Board of Directors assumes ultimate responsibility for Gold Fields’ adherence to sound corporate governance standards. The Board ensures that all business decisions are made with reasonable care, skill and diligence to maximise value for key stakeholders. Our Board comprises a diverse group of directors with the relevant knowledge, expertise, technical experience and business acumen to govern ethically and with honesty, transparency, responsibility, authenticity and impartiality. Below, we list our Directors as at 31 December 2020.

 

       

 

VALUE-ADDING EXPERIENCE

 

   
LOGO  

LOGO  CHERYL CAROLUS (62)

 

Chairperson

BA Law; Bachelor of Education, University of the Western Cape; Honorary Doctorate in Law, University of Cape Town (UCT)

APPOINTED TO THE BOARD: Director, 2009

Chairperson, 2013

 

Governance and compliance, social development, training and development, people management

   
LOGO  

LOGO  RICHARD MENELL (65)

 

Deputy Chairperson

BA (Hons), MA (Natural Sciences Geology), Cambridge; MSc (Mineral Exploration and Management), Stanford University

APPOINTED TO THE BOARD: Director, 2008, Deputy Chairperson, 2015, Lead independent director, 2017

Resigned with effect from 10 March 2021

 

Executive management, mining, geology

   
LOGO  

LOGO  NICK HOLLAND (62)

 

Chief Executive Officer (CEO)

BCom; BAcc, University of the Witwatersrand (Wits); CA(SA)

APPOINTED TO THE BOARD: Executive director, 1998, CEO, 2008 Retired with effect from 31 March 2021

 

Finance, mining, management

   
LOGO  

LOGO  PAUL SCHMIDT (53)

 

Chief Financial Officer (CFO)

BCom, Wits; BCompt (Hons),

University of South Africa (UNISA); CA(SA)

APPOINTED TO THE BOARD: Executive director, 2009, CFO, 2009

 

Finance, mining, management

   
LOGO  

LOGO  ALHASSAN ANDANI (59)

 

Independent non-executive director

BSc (Agriculture), University of Ghana; MA (Banking and Finance), Finafrica Institute in Italy

APPOINTED TO THE BOARD: 2016

 

Mining management, engineering

   
LOGO  

LOGO  PETER BACCHUS (52)

 

Independent non-executive director

MA (Economics) Cambridge University

APPOINTED TO THE BOARD: 2016

 

Investment banking, financing, mergers and acquisitions

 

LOGO

 

IAR-32


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

    

 

While we operate in contexts that are often driven by changing social and political trends, we believe our effective and ethical governance structures enable us to protect our reputation and social licence to operate while creating sustainable value for our stakeholders. We adhere to all relevant legislation and industry standards and are committed to upholding the principles of the King IV Report on Corporate Governance for South Africa 2016 (King IV) throughout our operations. We have also voluntarily aligned our business with several international standards and guidelines as detailed on p3 of our Annual Financial Report (AFR). Our King IV application register is detailed in our full Corporate Governance Report (p2 – 17 of our AFR). Our Board met four times during the year. Our 2020 Board and Board committee attendance was 99% (2019: 97%).

 

       

 

VALUE-ADDING EXPERIENCE

 

   
LOGO  

LOGO  TERENCE GOODLACE (61)

 

Independent non-executive director

MBA (Business Administration), University of Wales; BCom, UNISA; NHDip and NDip (Metalliferous Mining), Witwatersrand Technikon;

MDP, UCT

APPOINTED TO THE BOARD: 2016

 

Mining, capital projects, commercial and operational management, risk management, mineral resource management

   
LOGO  

LOGO  CARMEN LETTON (55)

 

Independent non-executive director

PhD (Mineral Economics), University of Queensland; Bachelor Mining, Engineering, WASM

APPOINTED TO THE BOARD: 2017

 

Mining engineering, corporate governance, risk management, corporate strategy

   
LOGO  

LOGO  PHUTHI MAHANYELE-DABENGWA (50)

 

Independent NED

BA Economics, Rutgers, State University of New Jersey; MBA, De Montford University, Leicester

APPOINTED TO THE BOARD: 2018

Resigned with effect from 28 February 2021

  Financial, infrastructure development, commercial
   
LOGO  

LOGO  STEVEN REID (65)

 

Independent non-executive director

BSc (Mineral Engineering), South Australian Institute of Technology; MBA, Trium Global Executive; ICD.D, Institute of Corporate Directors

APPOINTED TO THE BOARD: 2016

 

Mining engineering, risk management, compensation management

   
LOGO  

LOGO  YUNUS SULEMAN (63)

 

Independent non-executive director

BCom, UKZN; BCompt (Hons), UNISA; CA(SA); CD(SA)

APPOINTED TO THE BOARD: 2016

 

Auditing, financial accounting, governance

NEW APPOINTMENTS SINCE 2020 YEAR-END

 

     
LOGO  

LOGO  PHILISIWE SIBIYA (44)

 

Independent non-executive director

BCom (Hons), University of KwaZulu-Natal (UKZN); CA(SA)

APPOINTED TO THE BOARD: 2021

 

Executive management, finance, telecommunications

   
LOGO  

LOGO  CHRIS GRIFFITH (55)

 

CEO (with effect from 1 April 2021)

BEng (Mining), University of Pretoria

APPOINTED TO THE BOARD: April 2021

 

Mining, executive management, engineering

 

LOGO

 

IAR-33


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

OUR BOARD COMMITTEES

as at 31 December 2020

 

       

 

AUTHORITY AND PURPOSE

 

   
LOGO  

LOGO  NOMINATING AND GOVERNANCE COMMITTEE

Met seven times in 2020

CHAIRPERSON: Cheryl Carolus

MEMBERS: Steven Reid, Rick Menell, Yunus Suleman

 

Considers the composition and effectiveness of the Board and its committees, as well as management as a whole. It is responsible for the succession of directors and key executives, and is involved in recruiting appropriately skilled directors. The Committee also ensures a robust approach to the Company’s corporate governance.

   
LOGO  

LOGO  REMUNERATION COMMITTEE

Met five times in 2020

CHAIRPERSON: Steven Reid

MEMBERS: Cheryl Carolus, Alhassan Andani, Rick Menell, Peter Bacchus

 

Assists the Board to ensure that the Group’s remuneration practices are fair, responsible and equitable, and that it supports growth in stakeholder value. In particular, the Committee ensures that executive remuneration is directly linked to Gold Fields’ performance, thereby protecting our key stakeholders’ interests by incentivising management to deliver value.

   
LOGO  

LOGO  SOCIAL, ETHICS AND

TRANSFORMATION (SET) COMMITTEE

Met four times in 2020

CHAIRPERSON: Carmen Letton

MEMBERS: Cheryl Carolus, Rick Menell, Alhassan Andani, Nick Holland, Phuthi

 

Assists the Board to discharge its oversight responsibilities relating to safety, security, health, environmental, social, ethics, human rights, sustainable development and stakeholder relationships. Furthermore, it holds the Company responsible for operating an ethical and sustainable business in line with the principles of good corporate citizenship.

   
LOGO  

LOGO  CAPITAL PROJECTS, CONTROL AND REVIEW COMMITTEE

Met four times in 2020

CHAIRPERSON: Rick Menell

MEMBERS: Peter Bacchus, Terence Goodlace, Yunus Suleman, Steven Reid, Cheryl Carolus, Phuthi Mahanyele-Dabengwa, Carmen Letton

 

Considers, reviews and approves new capital projects exceeding US$200m and satisfies the Board that the Group has used correct, efficient methodologies in evaluating and implementing such projects. The Committee monitors progress throughout the project lifecycle and periodically reports any findings to management and the Board.

   
LOGO  

LOGO  RISK COMMITTEE

Met seven times in 2020

CHAIRPERSON: Peter Bacchus

MEMBERS: Terence Goodlace, Carmen Letton, Yunus Suleman

 

Assists the Board to establish Gold Fields’ risks and opportunities. It also ensures that management identifies and implements appropriate risk management controls to ensure long-term value creation for stakeholders in a risk environment that continues to evolve.

   
LOGO  

LOGO  SAFETY, HEALTH AND SUSTAINABLE

DEVELOPMENT (SHSD) COMMITTEE

Met five times in 2020

CHAIRPERSON: Terence Goodlace

MEMBERS: Cheryl Carolus, Rick Menell, Steven Reid, Carmen Letton, Phuthi Mahanyele-Dabengwa

 

Assists the Board to oversee the effectiveness of the Group’s SHSD programmes and strategic plan. It also monitors the Company’s performance in this regard and ensures that it complies with relevant laws, regulations and external standards to ensure optimal safety, health and environmental practices, contributing to the Group’s social licence to operate.

   
LOGO  

LOGO  AUDIT COMMITTEE

Met five times in 2020

CHAIRPERSON: Yunus Suleman

MEMBERS: Rick Menell, Alhassan Andani, Peter Bacchus

 

Oversees the integrity and transparency of Gold Fields’ corporate reporting and accounting practices, and considers risks that may affect external reports’ integrity.

   
LOGO  

LOGO  AD-HOC INVESTMENT COMMITTEE

Met once in 2020

CHAIRPERSON: Peter Bacchus

MEMBERS: Alhassan Andani, Yunus Suleman, Steven Reid, Cheryl Carolus, Rick Menell

 

Considers and recommends, where appropriate, strategic, organisational and structuring options for the Group to the Board, including investment and divestment opportunities, to maximise shareholder returns sustainably.

   
LOGO  

LOGO  GROUP EXCO

CHAIRPERSON: Nick Holland

 

CEO: Chris Griffith

(with effect from 1 April 2021)

 

Our Group Exco is responsible for implementing the Group’s strategy and executing the Board’s mandate and directives. Exco meets at least every month to review Gold Fields’ performance against set strategic objectives, and develops strategies and policy proposals for the Board’s consideration. It also assists the Board in the execution of the Company’s disclosure obligations.

 

LOGO    Exco has 12 members in total, comprising the Company’s principal officers and executive directors. More information can be found on our website at www.goldfields.com/our-leadership.php

 

IAR-34


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

HOW WE GOVERN OUR BUSINESS

KEY DELIBERATIONS AND DECISIONS TAKEN BY THE BOARD IN 2020

 

LOGO

 

IAR-35


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

HOW WE GOVERN OUR BUSINESS CONTINUED

HOW BOARD GOVERNANCE ADDS VALUE

 

LOGO

 

IAR-36


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

ENSURING WE DO BUSINESS ETHICALLY

THE STRUCTURES AND MECHANISMS USED TO DRIVE ETHICAL BUSINESS PRACTICE

The foundation of our business is based on strong ethics. Our Board and its committees are responsible for setting the ethical tone which, in turn, cultivates a culture of integrity and transparent reporting to our stakeholders. From this foundation, we build trust with our stakeholders, allowing us to strengthen our reputation and create sustainable value. We have numerous mechanisms in place to help to ensure we conduct our business ethically, adhere to compliance requirements and entrench good governance within the business.

 

LOGO

 

IAR-37


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

OUR BUSINESS MODEL

 

LOGO

 

IAR-38


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

Gold Fields has firmly positioned itself as a global diversified gold producer with a quality portfolio of mechanised underground and open-pit mines. Our business model explains how we aim to fulfil our strategic objectives, as well as how we create, preserve or erode value for our stakeholders over time.

 

LOGO

 

IAR-39


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

VALUE CREATION FOR OUR STAKEHOLDERS

The sustainability of our operations depends on mutually beneficial relationships with our key stakeholders. We therefore focus on constructive, transparent and open engagement which, we believe, will create enduring value for our stakeholders and the Company.

TOTAL AND NATIONAL VALUE DISTRIBUTION BY REGION AND TYPE 2020 (US$M)

 

     Employees             SED spend1     

Capital

        providers

    

        Business

partners

         Governments          National value
distribution
 

Australia

     145       1        7        716        143        1,013  

Americas

     42       3        4        167        58        273  

South Africa

     86       32        2        190        23        283  

West Africa

     80       10        12        615        171        887  

Corporate

     60       0        229        98        7        394  

Total Gold Fields

     412 4      17        253        1,786        381        2,849  

 

1 

Socio-economic development spend in host communities

2 

This includes US$1m from the South Deep trusts

3 

South Deep does not yet pay income tax as it is in a loss-making position

4 

This excludes benefits paid to employees working on capital projects

 

 

LOGO Employees

 

 

VALUE DISTRIBUTION PER REGION

 

LOGO

 

 

 

  

 

KEY CONCERNS AND EXPECTATIONS

  Learning and development

  Performance management

  Competitive remuneration and benefits

  Job security amid Covid-19

  An inclusive and enabling culture with opportunities for innovation

  Safe and healthy working environments

  A company that is ethical and sustainable

 

VALUE CREATED FOR EMPLOYEES IN RESPONSE TO THEIR KEY CONCERNS AND EXPECTATIONS

  Paid competitive salaries with a strong performance-based component

  Optimised business processes and operational efficiencies

  Continued to implement modern working practices to facilitate greater work-life balance

  Cultivated a stringent safety and health culture

 

LOGO For more information, refer to p56 of the IAR and our Report to Stakeholders.

 

HOW WE SUPPORTED OUR EMPLOYEES DURING COVID-19

  Paid all our employees their base salaries

  Provided testing and quarantine facilities

  Enabled office and administrative staff to work from home

  Enabled older employees and those with comorbidities to work from home at all times

  Instituted flexi-time working arrangements

  Reduced international and regional travel

  Implemented standard operating procedures once employees started returning to offices

  Imposed mandatory social distancing, sanitation and mask-wearing practices at our sites and offices

  Established a dedicated Covid-19 information portal

  Offered mental health support programmes

 
 
 
 
 

 

PAYMENTS INCLUDE

 

salaries and wages, benefits and bonuses.

 

US$412m

 

paid in salaries and benefits

 

53%

 

host community employment

 
 
 
 
 
 
 

 

IAR-40


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

 

LOGO  Host Communities     

Number of engagements in 2020: 658 (2019: 364)

 

 

TOTAL COMMUNITY VALUE

DISTRIBUTION PER REGION1

 

LOGO

 

 

 

  

 

KEY CONCERNS AND EXPECTATIONS

  Employment and procurement opportunities

  Skills and enterprise development

  Environmental rehabilitation

  Community investment

  Protection of heritage sites

 

VALUE CREATED FOR COMMUNITIES IN RESPONSE TO THEIR KEY CONCERNS AND EXPECTATIONS

  Roll-out of Shared Value projects and host community initiatives have increased the percentage of value distributed to host communities to 28% of total value created by Gold Fields

  Created jobs and business opportunities through host community procurement

  Unlocked opportunities for host community employment in the mines, their contractors and suppliers, their suppliers, and non-mining sectors

  Invested in integrated community development, including health and wellbeing, environment and infrastructure

  Expanded skills base in host community by unlocking education and training opportunities

 

LOGO For more information, refer to p81 of the IAR and our Report to Stakeholders.

 

HOW WE SUPPORTED OUR COMMUNITIES DURING COVID-19

  Donated to government and industry response funds

  Donated medical equipment to local hospitals and clinics

  Distributed personal protective equipment to host communities

  Distributed food to vulnerable people

  Donated sanitising materials and equipment to local government to curb the spread of Covid-19

  Launched radio and television campaigns to raise awareness and dispel myths around the virus

 
 
 
 
 

 

PAYMENTS INCLUDE

 

procurement, employee wages and investment in SED.

 

US$17m

 

invested in SED

 

US$536m

 

spent on host community procurement

 

 

US$123m

 

spent on host community employee wages

 
 

Total: US$676m

 
     

 

LOGO Capital providers         

Number of engagements in 2020: 508 (2019: 481)

 

 

VALUE DISTRIBUTION PER REGION

 

LOGO

 

 

 

  

 

KEY CONCERNS AND EXPECTATIONS

  Sustainable returns on investment

  A strong balance sheet

  Execution of Gold Fields’ strategy

  Sound and ethical leadership

  Succession planning for executive management

 

VALUE CREATED FOR CAPITAL PROVIDERS IN RESPONSE TO THEIR KEY CONCERNS AND EXPECTATIONS

  Developed and maintained a strong portfolio of mines

  Damang Reinvestment project and Gruyere provide solid returns

  Identified and appointed new CEO

  Continued to fund the development, maintenance and growth of our operations

  Improved share price and increased dividends

  Reduced net debt and maintained strong balance sheet

 

LOGO For more information, refer to p74 of the IAR and our Report to Stakeholders.

 

HOW WE SUPPORTED OUR CAPITAL PROVIDERS DURING COVID-19

  Limited the impact of the pandemic on our operational performance

 
 
 
 
 

 

PAYMENTS INCLUDE

 

interest and dividend payments.

 

US$253m

 

paid to the providers of debt

and equity capital

 

Reduced net debt by

 

US$595m

 
 

 

IAR-41


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

VALUE CREATION FOR OUR STAKEHOLDERS CONTINUED

 

LOGO    Business partners (contractors and suppliers)

 

 

VALUE DISTRIBUTION PER REGION

 

LOGO

 

 

 

  

 

KEY CONCERNS AND EXPECTATIONS

  In-country and host community procurement of goods and services

  Investment in enterprise and supplier development

  Sustainable materials and supply chain stewardship

  Sustainable and value-driven relationships

 

VALUE CREATED FOR BUSINESS PARTNERS IN RESPONSE TO THEIR KEY CONCERNS AND EXPECTATIONS

  96% of total procurement spend is from in-country businesses

  US$536m of total procurement spend by our mines – 29% of total – was spent on suppliers and contractors from our host communities

  Included all business partners in our health and safety management systems

  Provided suppliers in Australia with a toolkit on the Modern Slavery Act 2018

 

LOGO For more information, refer to p84 of the IAR and our Report to Stakeholders.

 

HOW WE SUPPORTED OUR BUSINESS PARTNERS DURING COVID-19

  Provided contractor employees with access to our testing and quarantine facilities

  Imposed mandatory social distancing, sanitation and mask-wearing practices at our sites and offices

  Included them in our communication campaigns around Covid-19 programmes

  Paid small, medium and micro-enterprise (SMMEs) providers and contractors during South Deep’s closure and salaries to mineworkers during the national lockdown (in South Africa)

  Committed to paying SMMEs within 30 days of delivery of goods and/or services (in South Africa)

 
 
 
 
 

 

PAYMENTS INCLUDE

 

operations and capital procurement.

 

US$1,786m

 

paid to suppliers and contractors

 

29%

 

of mine operational and capital spend (excluding utilities) is with host community firms

 
 

 

 

LOGO LOGO Governments      

Number of engagements in 2020: 1,011 (2019: 899)

 

 

VALUE DISTRIBUTION PER REGION

 

LOGO

 

 

 

  

 

KEY CONCERNS AND EXPECTATIONS

  Adherence to relevant legislation

  Compliance with safety, health and environmental regulations

  Protection of and respect for human rights

  Payment of taxes and other levies

  In-country employment and procurement

  Investments in SED projects in host communities

 

VALUE CREATED FOR GOVERNMENTS IN RESPONSE TO THEIR KEY CONCERNS AND EXPECTATIONS

  Over 96% of procurement is sourced from companies within the countries of operation

  Over 86% of employees are nationals of the countries of operation

  Paid royalties and taxes to host governments that, if utilised appropriately, can enable them to develop critical infrastructure

  Invested in SED projects that also grow and sustain non-mining jobs

 

LOGO For more information, refer to p92 of the IAR and our Report to Stakeholders.

 

HOW WE SUPPORTED GOVERNMENTS DURING COVID-19

  Adhered to all government regulations and protocols

  Donated to government or industry response funds

  Donated medical equipment to government run hospitals and clinics

  Engaged directly with host governments to raise awareness within host communities

  Assisted local government efforts such as street sanitation

 
 
 
 
 

 

PAYMENTS INCLUDE

 

mining royalties and land-use payments, taxes, duties and levies.

 

US$381m

 

paid in taxes and royalties

 

 

US$22m

 

paid to the Ghana government in dividends relating to its 10% stake in each of Damang and Tarkwa

 
 

 

IAR-42


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

MATERIAL MATTERS

 

Our materiality analysis identifies the significant economic, environmental, social and governance factors that could substantively influence the decisions our capital providers and other stakeholders make about Gold Fields’ ability to deliver on its strategic objectives and create value over the short, medium and long term. This analysis contributes to the development of the Group’s business plans and strategies.

Gold Fields conducts an annual materiality analysis, which is informed by our strategic and risk management processes, among others. Our 2020 materiality analysis expands our 2019 build-up of material topics or matters. In the 2019 exercise we focused on revising and updating our scope and boundaries in line with our changing business footprint, confirmed our economic, environmental, social and governance-focused material matters, and prioritised and ranked those

topics that are most important to Gold Fields and our stakeholders.

During our 2020 analysis, we revisited our 2019 material topics to confirm their continued relevance to Gold Fields. The impact of Covid-19 – to both Gold Fields and our stakeholders – was a new material topic introduced to this year’s analysis, and has been rated as the most material matter during the year. We separated stakeholder engagement and relations from direct and indirect socio-economic benefits in 2020, mostly due to the significance of this topic to our stakeholders. The ranking of other material matters did not change in 2020, and there were no significant inclusions or exclusions from the overall matters identified previously.

We identified opportunities to diversify our stakeholder engagements and widen the number of interviewees from different stakeholder groups.

We were not able to have as many face-to-face stakeholder interactions as originally planned, but through electronic interviews and engagements, as appropriate, we could conduct and supplement our engagements while navigating Covid-19-related restrictions. This enabled us to receive input from material stakeholders across the Group, including employees, host communities, governments, industry associations, media, third parties and traditional authorities.

In line with our revised 2019 presentation of the material matters, we categorised our material matters as economic, environmental, social and governance. The 2020 materiality analysis is concluded with an internal validation process to confirm strategic alignment with our business.

The map below graphically represents the outcomes of the 2020 materiality assessment:

 

 

MATERIALITY ASSESSMENT

 

LOGO

 

IAR-43


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

RISKS AND OPPORTUNITIES

Assessing the risks to Gold Fields’ sustainability is a collective effort by management at Group, regional and operational levels. This, along with identifying the appropriate mitigating actions, is a critical internal management tool to reduce the potential impacts of identified risks.

Risk mitigations are included in the annual Group performance scorecard and cascaded down to the performance scorecards of management employees at regional and operational levels. The formal risk review process starts during management’s annual strategic planning sessions, where strategic and emerging risks, as well as macro-trends, are analysed as part of developing the Company’s risk register and mitigating actions. These are reviewed and updated quarterly and presented to the Board’s Risk Committee twice a year for verification. As a global company, we continue to be shaped by the external dynamics in the regions where we operate. We discuss the impact of longer-term, emerging global trends in general and in Gold Fields on p45.

Top 20 Group risks in 2020

 

LOGO

 

 

IAR-44


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

 

LOGO

4 (2019: 3) 5 (2019: 4) 6 (2019: 5) 7 (2019: 6) 8 (2019: 8) 9 (2019: 9) 10 (2019: 10) 11 (2019: 12) RISK RESOURCE NATIONALISM Resource nationalism, regulatory uncertainty and government imposts Potential impact of Covid-19 The economic impact of the Covid-19 pandemic will likely be felt for the near future, and we expect that governments will eventually seek additional tax income from corporations. The gold industry could be a specific target, as governments perceived it to have benefitted from a higher gold price. MINERAL RESOURCES AND MINERAL RESERVES Replacing Mineral Resources and Mineral Reserves in Australia, Ghana, Peru and Chile MINING COSTS Rising mining costs, including those relating to ESG Potential impact of Covid-19 Mining companies were already exposed to higher inflation prior to the pandemic, and Covid-19 may lead to additional costs. SAFETY and health of our employees, including occupational illnesses ENERGY Security of power supply and cost of energy CLIMATE CHANGE Failure to implement climate change adaptation measures Potential impact of Covid-19 The focus on climate change issues was only temporarily abated because of the pandemic. While governments have prioritised Covid-19 recovery funding, investments in climate change programmes were generally not affected. CYBERCRIME Cybercrime/loss of information and communication technologies (ICT) data Potential impact of Covid-19 Cybercrime increased significantly during the pandemic, with cybercriminals taking advantage of employees working from home with limited ICT protection in place. SOCIAL LICENCE Impact on social licence and relationships with host community Potential impact of Covid-19 The pandemic escalated economic hardships in our host communities, who now have heightened expectations that our mines will provide financial and other assistance to alleviate their burden. MITIGATING ACTION Gold Fields, on its own and in conjunction with its peers, seeks to address the trust gap that often exists between government and miners. Our government action plants rely on strengthened engagement with governments at all levels, continued roll-out of Shared Value projects that benefit host communities and improved communication on the socio-economic benefits of mining for host countries and host communities. Legal actions are only considered as a last resort and then mostly with our peers in a country of operation. The Board is appointed of social and political risks annually through external reports. We continue to evaluate value-accretive opportunities to expand our business, including acquisitions, disposals, JVs, new mine builds and other strategic projects. The construction of our latest project, Salares Norte, is progressing against plan, and we have provided for additional exploration budget. Our regions all have comprehensive near-mine/on-site exploration programmes in place, and we monitor our performance against these programmes during our quarterly business reviews. Over the past 10 years, our Australian mines have consistently replaced depleted Mineral Reserves and more. We have business, productivity and cost improvement processes and programmes in place at all our operations, which are supported by the implementation of our innovation and technology strategy to reduce costs and enhance revenue generation. We have monthly and quarterly business cost and capital reviews in place to ensure spending remains in line with plans. Each mine provides cost guidance to the market at the beginning of the financial year. The safety, health and wellbeing of our employees is paramount. With safety as our number one priority, we continuously review and upgrade our safety systems, cultures and programmes. In 2019, we implemented our Courageous Safety Leadership programme throughout the Group, which is complemented by critical controls, behaviour-based safety and Visible Felt Leadership programmes in all our regions. All operations are certified to the leading ISO 45001 health and safety standard. Over the past five years, we have gradually replaced diesel with low-carbon gas as the main form of electricity at our Ghanaian and Australian mines. More recently, we have shifted to renewable energy, which not only secures stable and cost-effective supply but also reduces our carbon emissions. In Australia, we commissioned renewable microgrids, supported by battery systems, at Granny Smith and Agnew and advanced plans to install a similar microgrid at Gruyere. Most recently, South Deep received regulatory approval for its 40MW solar plant and, at Salares Norte, Aggreko signed a 10-year contract to provide a 26MW hybrid solar and thermal power solution once the mine is operational. Given the growing concern and uncertainty around extreme weather events, we are reviewing our climate change vulnerability risk assessments and, where necessary, adapting our approach in response to the changing environment. We continue to enhance the resilience of our operations – by, for example, rolling out renewable energy initiatives – while also improving our disclosure and implementing measures to adapt to climate-related changes at an operational level. We periodically assess and, where possible, mitigate the impact of climate change on our operations and our host communities. We continue to protect operational technology to decrease disruptions and ensure business continuity. Due to the dramatic increase in cybercrime globally, we implemented a software platform across the Group to safeguard infrastructure critical to our sustainability. Furthermore, we embedded additional software precautions at the onset of Covid-19 to protect our business against attacks as our people transitioned to home offices. All our mines and offices achieved ISO 27001 cybersecurity certification in 2020. We continue to strengthen the relationships with our host communities through enhanced stakeholder engagement and community relations programmes. Furthermore, we continue to invest in Shared Value projects that benefit our operations and host communities in Ghana, Peru, Chile and South Africa. This focuses on host community employment, procurement and SED investments. In Australia, we developed an Indigenous Peoples framework and strategy for approval and implementation, as well as a Reconciliation Action Plan (RAP) to guide relations with and create opportunities for Indigenous Peoples at our mines.

 

IAR-45


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

RISKS AND OPPORTUNITIES CONTINUED

 

LOGO

12 (2019: 7) 13 (2019: 13) 14 (2019: 14) 15 (2019: 15) 16 (2019: not ranked) 17 (2019: not ranked) 18 (2019: 17) 19 (2019: 19) 20 (2019: 18) RISK SKILLS Attraction and retention of skills Potential impact of Covid-19 For now, the negative global financial and business impacts of Covid-19 resulted in a decrease in our turnover rate in most of the regions where we operate. The longer-term impacts of the pandemic, such as remote working and reduced travel, will fundamentally change the way we work. WATER pollution, security and reduction in freshwater consumption GEOTECHNICAL Increased geotechnical risk underground and in open pits associated with mining at depth, ageing pits and evolving mining operations GHANA CONTRACTORS Challenges with local mining contractors in Ghana CHILE Delays and cost overrun relating to the Salares Norte project POLITICAL RISKS Political uncertainty in the areas where we operate INFRASTRUCTURE Ageing infrastructure Potential impact of Covid-19 The pandemic illustrated that automation and digitisation are going to be major themes in mining – not just as a way to lower costs and improve productivity, but also to support remote workforces and reduce on-site presence. INFORMATION AND TECHNOLOGY Failure to modernise operations EZULWINI AND COOKE 3, 2 AND 1 Ezulwini and Cooke 3, 2 and 1 rewatering impact on South Deep MITIGATING ACTION Gold Fields’ business depends on fit-for-purpose human resource (HR) structures to meet operational requirements. We focus on developing a high-performance culture through our performance management system and by having the appropriate succession plans and talent reviews in place. Above all, we seek to provide competitive and incentive-focused remuneration packages that attract and retain sought after skills. We have also developed and implemented a diversity and inclusion dashboard, to track our progress in building a more diverse workforce. All our operations are certified to the ISO 14001 environmental standard, which require sound water management and disclosure. Furthermore, we developed and integrated three-year regional water management plans with our 2021 business plans at all our operations. Finally, water recycling, reuse and conservation practices are in place in all regions, with targets achieved for 2020. Work conducted by the Geotechnical Review Boards, consisting of independent and in-house industry experts, continued at South Deep for all major projects, the Australian underground operations, when necessary, and for all pit cutbacks at our other operations in Australia, Ghana and Peru. We are working closely with the two Ghanaian mining contractors at our Tarkwa and Damang operations to ensure that they meet their contractual obligations to the mines while at the same time remaining financially sound. This has required renegotiations of their contracts and bringing in OEMs to provide technical assistance for fleet maintenance, as well as financial support to provide debt relief and to procure additional fleet. With construction starting at Salares Norte during 2020, our team implemented robust project control systems. Performance against our project plan is monitored weekly and monthly and is tracking against plan. We continue to adhere to government-related Covid-19 restrictions, rules and laws, and have increased camp capacity to accommodate the required workforce. The team also maintains a close working relationships with authorities, environmentalists and local communities on the Chinchilla relocation project. Our strategy of geographic de-risking towards mining-friendly jurisdictions ensures that we operate in countries in which political risks are limited in the first place. Continuous engagement with our host communities and governments, either directly or through industry associations, is a primary tool in seeking to address emerging political risks. We conduct political risk assessments on a regular basis in all the countries in which we operate. Planned on-site maintenance and condition monitoring, which is conducted by third-party specialists, is key to ensuring the integrity of our fixed assets. Critical and long lead-time spares are kept on-site, and maintenance of critical spares is ongoing. To complement this, we instituted a process of independent risk management, fire prevention and infrastructure audits, which are conducted annually by insurance risk engineers and third parties. However, some of the inspections could not be carried out due to Covid-19 restrictions. We have sought in-country expertise to carry out independent assessments, where necessary. We continue to implement our innovation and technology strategy in pursuit of a Gold Fields Mine of the Future. As part of this, we have real-time software and telecommunications in place to track movement of equipment, people and production. We also work closely with original equipment manufacturers (OEMs) and suppliers to ensure that we are fast followers of new, beneficial mine technologies. A shift to renewable energies as well as the roll-out of electrical machinery and equipment also helps to modernise operations, while at the same time improving costs and safety. The reinforced concrete water plugs between South Deep and Ezulwini are subject to robust inspections, regularly planned maintenance and a condition-monitoring programme to ensure their integrity. There is a legal process for Ezulwini’s closure in place, in which we participate as an interested party backed by a robust legal strategy. South Deep is also seeking to work with Ezulwini to find alternative solutions to use the mine water.

 

IAR-46


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

EMERGING GLOBAL TRENDS

 

As a global company, we continue to be shaped by the external dynamics in the regions where we operate. We closely observe these longer-term strategic and emerging risks, prioritising them as needed and adjusting our mitigating actions accordingly to protect the sustainability of our business. While many of our top 20 Group risks will remain relevant in the long term, we specifically monitor any developing any emerging trends that will inform adjustments to our strategy. This year we assessed, analysed and recommended ways to remediate the following five emerging (longer-term) trends that have been identified by the ICMM in partnership with Brodie Consulting:

 

 EMERGING

 GLOBAL TREND

   CONTEXT   

STRATEGIC RESPONSES TO STRENGTHEN OUR FUTURE

MARKET POSITION

LOGO

Ubiquity of

technology

   Tech-led mining will continue to disrupt business as we know it today, and while the expectation is that these disruptive technologies could make our lives easier, it also leads to new and emerging risks to our business.   

  Investing in data innovation to enable real-time decision control and decision making

  Integrating data across our value chain using real-time data platforms

  Retraining and reskilling our workforce across the Group – including those employees from our host communities

  Implementing Gold Fields’ innovation and technology (I&T) strategy to improve safety, productivity and lower cost

  Leveraging the opportunity to transition to a virtual working environment to attract employees in the technology field without the need for relocation

 

LOGO

Extreme climate

change impacts

  

 

The concern for global environmental degradation continues to increase significantly. Our impact on the planet are becoming more evident – heat records across the world are broken regularly, the effects of which are detrimental to native fauna and flora. The pressure to accelerate to a low-carbon economy is becoming increasingly important. Globally, 26 banks are no longer providing direct financing for new coal plant projects. Similarly, mining companies are recognising the importance of reducing their carbon emissions to slow down climate change.

 

  

 

  Setting time-bound (2030) targets with an accompanying roadmap for biodiversity

  Aligning conservation efforts with climate resilience

  Quantifying the financial value of natural resources, as well as our impact on them

LOGO

New barometer

of ethics

  

 

The Covid-19 pandemic, which led to high levels of joblessness, has substantially accelerated the erosion of trust around the world and raised increased attention on how companies treat their employees. Furthermore, stakeholders increasingly link being a good employer to being a good business overall, with a company’s treatment of its employees as a barometer of trust.

  

 

  Collaborating with key stakeholders to improve the general social perception of mining, and effectively applying the principles of a green and circular economy

  Integrating our social licence to operate and social performance into business decision-making, ensuring it becomes as important as protecting the health and safety of our employees

 

LOGO

Capitalism reforms

  

 

There is an increased urgency for businesses to be more responsible than ever before. This requires a renewed focus on purpose and a move away from maximising shareholder value to solving the problems of people and planet profitably. Corporate action is required to transform our current landscape into one that is more inclusive and cohesive by focusing on fairer market outcomes, investments that advance shared goals, and harnessing the innovations of the Fourth Industrial Revolution.

  

 

  Continue linking remuneration to environmental, social and governance (ESG) performance metrics to incentivise change

  More continuous stakeholder interactions, including nongovernmental organisations (NGOs)

  Open and transparent communication with our key stakeholders and the general public to further strengthen our reputation

  Enhancing the compelling narrative on the importance of ESG to attract the next purpose-driven generation

 

LOGO

Radical

transparency

 

  

 

The importance of risks relating to the regulatory landscape, including compliance, are expected to significantly increase over the next few years. Trust in all information sources is at a record low, and pressure from stakeholders is driving an enhanced focus on transparency and ethical supply chains. It is essential that companies embrace digital technologies to keep up with increasingly stringent regulations, as well as customers’ expectations for transparency and disclosure.

  

 

  Developing data platforms that provide real-time data accessible to outside stakeholders

  Reinforcing confidence in Gold Fields as a mining company by complying with all regulatory requirements

  Subscribing to transparency-focused initiatives, including EITI, Publish What you Pay (for taxation) and Transparency International

  Complying with best practice disclosure practices, including the Global Industry Standard on Tailings Management (GISTM)

 

 

 

IAR-47


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

TOP FIVE RISKS PER REGION IN 2020

 

AMERICAS

 

LOGO

  

AUSTRALIA

 

LOGO

 

LOGO

 

IAR-48


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

HOW WE OPERATE

   

    

 

 

SOUTH AFRICA

 

LOGO

  

WEST AFRICA

 

LOGO

 

LOGO

 

IAR-49


Table of Contents

LOGO

 

IAR-50


Table of Contents


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

LOGO

GOLD FIELDS 2021 BSC KPIs

 

 

Eliminate fatalities and serious injuries and remove people from risk

 

Improve the health and wellbeing of our workforce

 

       
2025 ESG CHARTER TARGETS             ASSOCIATED GROUP RISKS
                 
 

Strategic priority

 

   

Strategic intents

 

        No   

Risk

 

Covid-19

 

The impact of Covid-19 on our employees, communities and business plan

 

Safety

 

Safety and health of our employees, including occupational illnesses

Partnering to ensure the

safety, health and wellbeing

of our workforce and

alleviating such impacts on

our communities

 

 

LOGO   

 

 

Zero fatalities and serious injuries at our operations

       

LOGO

 

 

LOGO

  LOGO  

 

Eliminate vehicular incidents by implementing advanced collision avoidance technologies

 

    
  LOGO  

 

Significantly reduce underground exposure to Diesel Particulate Matter (DPM)

 

    
  LOGO  

Minimise health and environmental impacts on our host communities

 

       

 

  RELATED SDG

            LOGO   

Good health

and wellbeing

                        

TRADE-OFFS

Our trade-offs refer to the difficult decisions made during the year in the context of resource scarcity. Below are some of the significant actions taken during a difficult year to do so:

 

 

Funded Covid-19-related programmes and projects, which led to additional spend of about US$30m AIC

 

Invested substantially in environmental stewardship to mitigate any adverse environmental impacts on our employees and communities

 

Will invest significantly in implementing a gap analysis and aligning the Group with the Global Industry Standard on Tailings Management (GISTM) to prevent potential future catastrophic failings by one of our tailings dams

 

IAR-52


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

SAFETY

Our number one value – safety – drives our goal of achieving zero harm, as well as our target of eliminating all fatalities and serious injuries at our operations. Safety is critical to enabling performance across the Group, and is therefore a significant component of the annual performance bonuses of our executives, managers and broader workforce.

Tragically, we recorded a fatal incident at our South Deep mine in South Africa. On 3 June 2020, Abel Magajane, a shaft timberman, fell down a shaft ore-pass chute while doing repair work and subsequently succumbed to his injuries. Following the incident, South Deep further strengthened its safety systems, leadership and processes. Our sincere condolences go out to Abel’s family, friends and colleagues.

The number of serious injuries recorded during 2020 increased to six (2019: four). Since 2019, we have applied Gold Fields’ definition in classifying serious injuries at Group level. Prior to that, at South Deep, we applied a regulated definition of

 

serious injuries, which we continue to use in our reports to the authorities. However, by applying Gold Fields’ definition of what constitutes a serious injury, we are able to focus on those injuries our operations can address with a greater sense of urgency.

While LTIs and the LTIFR declined year-on-year, serious injuries, total recordable injuries and the TRIFR, severity of incidents and their duration increased in 2020 when compared with 2019. Relying only on these reactive indicators to provide an overview of our safety performance may drive undesirable behaviours and affect the transparency of our reporting. As such, we moved away from using injury frequency rates as the sole indicators of our performance. Instead, we use a mix of leading and lagging indicators. We have structured the leading indicators around incentivising desired leadership behaviours, while the lagging indicators provide insight into the outcomes of our safety initiatives. The leading and lagging indicators are captured in each regions’ environment, health and

safety scorecards, which, in turn, are included in our incentive programmes for senior employees.

Leading indicators use proactive measures to pre-empt future incidents, such as near-miss incident reporting, timely close out of corrective actions on serious potential incidents (SPIs), and the Safety Engagement Rate (SER)5. Encouragingly, all leading indicators improved against or maintained their respective annual targets.

SER5

    2020   2019   2018   2017  
    4.98   4.11   2.91   1.75  

There has been a strong drive to encourage managers and employees to engage on safety matters, which, as seen in the continued increase in the SER, are having a positive impact despite social distancing and other Covid-19-related measures. We are confident that, over time, this behaviour will lead to further improvement in our safety culture and positively impact our performance.

 

 

GROUP SAFETY PERFORMANCE (EMPLOYEES AND CONTRACTORS)

 

LOGO

 

1 

We also recorded non-occupational fatalities at our mines during 2017 and 2018. In 2017, a member of the protection services team at South Deep was shot and killed during a robbery at the mine while, in 2018, a member of Tarkwa’s Community Security Task Force drowned in a settling pond on the mine

2 

Since 2019, we have applied Gold Fields’ definition in classifying serious injuries. In terms of this definition, a serious injury is one that incurs 14 days or more of work lost and results in one of a range of injuries detailed at www.goldfields.com/safety.php

3 

LTI is a work-related injury resulting in the employee or contractor being unable to attend work for one or more days after the day of the injury. The employee or contractor is unable to perform any of his/her duties. LTIFR is per million hours worked

4 

TRIFR = (fatalities + LTIs + restricted work injuries + medically treated injuries) x 1,000,000/number of hours worked

5 

SER = safety engagements x 1,000/number of hours worked. Safety engagements are conversations between managers and the workforce to improve safety. Reporting of the SER commenced in 2017

 

IAR-53


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

SAFETY AND WELLBEING OF OUR PEOPLE CONTINUED

 

OUR APPROACH TO SAFETY

Group safety and health strategy

Our target of zero fatalities and serious incidents is supported by a Group safety and health strategy. The strategy – developed by the Group Safety Leadership forum, chaired by Stuart Mathews, Executive Vice-President: Australia, and approved by the Board Safety, Health and Sustainable Development Committee – rests on the following six core beliefs:

  Our leadership is responsible and accountable for the Group’s health and safety performance
  Living the Gold Fields values is fundamental to our health and safety performance
  All employees should return home safe and healthy every day
  Prevention is better than cure and, therefore, risk management is a key component of all systems
  All injuries and incidents are preventable and rely on good leadership, practical systems and positive employee behaviours
  Safety management should be seamlessly integrated into all activities

Furthermore, the strategy has three key objectives:

  Develop a culture of safety leadership within the organisation and firmly embed safety management as a line management responsibility
  Provide appropriate mechanisms to engage employees on safety and equip them with the necessary skills to consistently achieve safe outcomes
  Ensure the deployment of fit-for-purpose management systems that are aligned with a critical control management approach and are certified to ISO 45001

We continued to roll-out our Courageous Safety Leadership (CSL) programme in 2020, although Covid-19-related restrictions limited activities. The CSL programme equips our employees with practical tools to become safety leaders while also fostering an environment in which individuals feel empowered to speak out about unsafe behaviours. Improvements to our leading indicators are a positive sign of potential improvement. Training of employees and contractors in the Vital Behaviours programme, which entrenches the

right safety behaviours and choices, is planned for 2021 and beyond.

CSL training sessions were halted across all operations for much of Q2 2020. However, once Covid-19 restrictions eased in Q3 2020, sessions gradually started up again in Australia and West Africa. In South America, we transitioned to online CSL training sessions. Strict physical distancing measures in South Africa continued to affect the number of employees that could attend CSL training sessions. By year-end, 50% of our workforce had completed CSL training.

Improving safety management systems and controls

All our operations are now certified to ISO 45001, the leading health and safety management standard. South Deep was certified in February 2021, having previously operated under the OHSAS 18001 standard.

In 2017, we started to implement the ICMM’s critical control management approach, a process that is ongoing to date. After identifying and prioritising generic material unwanted events (MUEs), as well as the associated preventative controls and mitigating actions, regions identify the essential critical controls. External verification of the critical controls relating to the highest priority MUEs were completed in 2019, with the critical controls for lower priority MUEs being externally verified during 2020 and into 2021.

Innovation and technology to ensure greater employee safety

A key driver behind the further mechanisation of our operations is to improve the safety of employees. We have established dedicated innovation and technology leadership teams in all regions to drive initiatives that will improve safety, cost and productivity.

Gold Fields participates in the ICMM’s Innovation for Cleaner, Safer Vehicles (ICSV) programme, which was chaired until January 2021 by our CEO Nick Holland, to:

  Reduce or eliminate any injury through vehicle interactions
  Ensure a healthier underground working environment free of diesel emissions
  Reduce greenhouse gasses (GHGs) through electrification

The programme integrates with several of Gold Fields’ existing programmes that support this vision, including our:

  Modernisation programme
  Group energy and carbon management strategy, with regional subcommittees and plans, aimed at reducing energy costs and GHG emissions
  Group occupational health and safety strategy, which is underpinned by regional plans aimed at improving safety and health at our operations
  Regional I&T roadmaps and programmes.

Looking ahead, the following key initiatives are planned for 2021:

  Deploying collision avoidance at South Deep: Deploying Level 9 collision avoidance systems in vehicles is equivalent to having adaptive cruise control on underground equipment, and should enable pre-emptive accident avoidance between two vehicles and between machines and workers. It is also a legislative requirement in South Africa
  Improving wireless telecommunications: We are adopting wireless broadband telecommunication across our Australian surface operations, which enable real-time communication and data transmission. Salares Norte similarly selected this telecommunication system as their preferred network. Tarkwa and Damang in Ghana are currently designing their wireless backbone.
  Operating equipment remotely: South Deep established surface remote rock breaking as a business-as-usual practice. Tele-remote loading is also evolving into a standard operating practice. This is positive step in removing people from active mining areas and will be gradually rolled out at all operations
  Establishing remote operating centres: We are establishing integrated operating centres at South Deep, Granny Smith, Cerro Corona and Salares Norte. Importantly, these centres, which are located in the office blocks at our sites, will enable real-time monitoring and control of the working environment and thus speedier decision-making
 

 

IAR-54


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

    

 

HEALTH AND WELLNESS

Covid-19 dominated the Group’s occupational health and wellness efforts in 2020. The pandemic challenged our people and our business in many ways, and is set to continue to do so throughout 2021.

Gold Fields’ workforce may be exposed to a range of occupational health and wellness risks associated with, among others, Silicosis, Tuberculosis (TB), Noise-Induced Hearing Loss (NIHL) and Diesel Particulate Matter (DPM). The extent to which our employees are exposed to these risks differ from mine to mine because of the diverse nature of our operations, which includes both underground and open-pit mines.

We comply with all occupational health regulations and, in countries where regulations have not yet been promulgated, follow industry best-practice standards. We are further guided by our goal of zero harm, and consider the protection of employee health and wellness a fundamental human right.

Health programmes remain a key focus area at South Deep also because of the prevalence of many chronic diseases due to the relatively poor socio-economic conditions in South Africa. We are seeking greater collaboration on health within Gold Fields and, to this end, developed a strategic framework for occupational health during 2020, which is supported by Group guidelines that are being rolled out across our operations.

COVID-19

The second wave of Covid-19 infections, which started in late 2020, has taken a terrible toll at Gold Fields. As at 29 March 2021, 3,127 of our employees or contractors tested positive for Covid-19, while 10 had passed away after being infected with the virus. In addition, Galiano Gold, our Asanko JV partner, reported one death due to Covid-19.

The large number of positive Covid-19 cases reflects the high prevalence rate of the pandemic in the communities neighbouring our operations in Peru, Ghana and

 

 

South Africa. There have been no cases to date at our Australian mines.

Since March 2020, a Group Exco-level Covid-19 crisis management team has met regularly to coordinate actions and strategies to mitigate the impact of the pandemic on operations. Throughout the year, we focused on supporting our employees and contractors, with particular attention to their health and wellness. The Board’s Risk Committee has also held regular meetings to provide governance oversight, while regional and site-level committees have performed similar roles.

The Group spent approximately US$30m on Covid-19-related initiatives and interventions, such as specialised camp accommodation, testing equipment and facilities, additional labour costs and transport facilities. Where our mines had to close down or curtail activities due to government-imposed regulations, we continued to pay, at a minimum, all employees’ monthly base pay. Furthermore, no employee was laid off except for non-attendance of their duties. In South Africa, we also continued to pay our contractors and small and medium-sized enterprises (SME) suppliers during the national lockdown. In addition, our operations and employees have actively supported host communities and governments’ efforts to control the pandemic and assist people in need. These donations totalled over US$3m across the Group.

Our management teams were able to maintain sustainable and profitable production while safeguarding the health and safety of our employees. Key activities to ensure safe operations included:

  Strictly adhering to all government regulations and protocols
  Closing offices, implementing remote working arrangements and imposing travel restrictions
  Implementing standard operating procedures for those employees returning to work
  Implementing mandatory social distancing, sanitisation and mask-wearing practices
  Providing counselling and mental wellness support initiatives
  Regularly communicating to employees about Covid-19-related developments
  Maintaining a dedicated Covid-19 information portal
  Rolling out social media awareness and communication campaigns for employees, communities and others

In all regions where we operate, except Australia, our mines have facilitated polymerase chain reaction (PCR) tests for our employees and contractors to enable us to swiftly isolate and assist those affected. (In Australia, the Covid-19 prevalence rates among the population have been so low that it has not been necessary to supplement government testing.)

 

 

COVID-19 TESTING AND RESULTS AT GOLD FIELDS

 

LOGO

 

 

IAR-55


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

SAFETY AND WELLBEING OF OUR PEOPLE CONTINUED

 

Covid-19 will undoubtedly continue to disrupt our operations and people during 2021. Our teams are developing strategies to assist our employees in dealing with the impacts of a prolonged pandemic, particularly as it relates to mental wellness. We are also working with governments, industry forums and advisors on the best solution for vaccine roll-outs. For more details on how we are supporting our employees, see p57.

DIESEL PARTICULATE MATTER

Employees working with machinery in confined underground spaces, as well as those operating diesel-powered vehicles, are at risk of being exposed to DPM.

The South African regulator has not yet promulgated an occupational exposure limit (OEL) for DPM, however, we align with an industry limit of 0.16mg/m3. At South Deep, measurements are undertaken over a time-weighted exposure as they impact nearby workers. We aim to have 95% of all samples measure below 0.16mg/m3 by 2024. Pleasingly, DPM levels exceeding this limit decreased to 10% in 2020 from 13% in 2019.

South Deep completed its evaluation of DPM filters, which are being

fitted to those vehicles that emit the highest levels of DPM – load haul dumpers (LHDs), dump trucks and utility vehicles. By year-end, the mine had fitted seven LHDs with DPM filters, with a further 25 LHDs and dump trucks scheduled for 2021. Furthermore, South Deep continuously reviews ventilation layouts to ensure optimal dilution in all working places.

In Australia, equipment filtration is a key part of our strategy to manage DPM in our underground mines. Our strategy also requires a number of additional controls to be in place, including maintenance schedules, ventilation requirements, operator training, monitoring protocols and corrective action processes for any exceedances of the OEL. Exceedances of the current OEL of 0.07mg/m3 per 12-hour shift in the Australian mines are rare, indicating the appropriateness and effectiveness of our current strategy.

Open-pit mines in Ghana and Peru pose a lower risk to DPM exposure. Sampling at these mines shows that the effects of DPM exposure to personell is insignificant, though it still has an environmental impact.

As part of our drive to improve how we manage DPM exposure, we are working with the ICMM and its member companies on the ICSV programme. This initiative engages original equipment manufacturers (OEMs) to accelerate the development of mining vehicles that minimise DPM, reduce GHG emissions and minimise vehicle incidents. For details see page 73.

NOISE-INDUCED HEARING LOSS

Noise from machinery and equipment puts employees at risk of developing NIHL. We did not record any cases of NIHL in Ghana, Australia or Peru during 2020. However, three new cases of NIHL were reported at South Deep (2019: six), and 1.5% (2019: 1.3%) of personal noise samples registered above the regulated occupational exposure limit of 85 dB(A). All new equipment has noise emissions below 107dB(A) to meet the 2024 industry targets.

To reduce the risk of NIHL, South Deep continued its programme of providing employees with personally moulded hearing protection. All new auxiliary fans purchased are sound attenuated and we continued to retrofit existing fans to ensure fan

 

LOGO

 

IAR-56


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

noise levels do not exceed 107dB(A). We continue to work through the Minerals Council of South Africa to encourage OEMs to produce quieter equipment.

HIV/AIDS

Managing HIV/Aids remains an important issue at our South Deep mine and, to a lesser extent, our Ghanaian operations.

At South Deep, the prevalence rate of those living with HIV/Aids increased to 17% of the workforce (2019: 6%). This increase is mainly due to employees and contractors self-declaring as part of the screening process following the reopening of the mine after the national Covid-19 lockdown during March and April 2020. Furthermore, the increased attention to chronic diseases and the risks they pose in combination with Covid-19 led to an increase in employees disclosing comorbidities. Voluntary counselling and testing (VCT) is offered to prospective and permanent employees, including contractors, and 70% of the workforce underwent VCT during 2020. Free highly active anti-retroviral therapy (HAART) is provided to HIV-infected employees, and there are currently 657 employees enrolled in this programme (2019: 204). Our employees’ dependants can also receive HAART via the Company’s medical aid schemes.

In Ghana, where the national HIV/Aids rate is approximately 2%, employees and contractors have access to a free, confidential VCT programme. During 2020, 21% of the workforce participated in this programme – the low participation was due to employee wellbeing resources being dedicated to fighting Covid-19. No new positive HIV/Aids cases were identified among employees. At year-end, Ghana had 10 employees on HAART (2019: 10).

DUST, SILICOSIS AND TUBERCULOSIS

South Africa’s mining industry regulations for silica dust exposure require that 95% of all personal silica dust samples taken must be below a time-weighted exposure of 0.05mg/m3 by 2024. By the end of 2020, 13% of the personal silica dust

samples at South Deep still exceeded this level, the same as in 2019. Although we saw an improvement at the start of 2020, the lockdown period caused a deterioration in underground conditions, as we were unable to maintain and sustain engineering controls. Following a thorough review, we installed automated dust suppression units in all high-risk areas.

During 2020, the number of Silicosis cases submitted to the health authorities increased to 10 from five in 2019. These employees have all been working in the mining industry between 20 and 40 years. All employees diagnosed with Silicosis are initiated on a six-month course of TB prophylaxis. No South Deep employee who joined the mine after 2008 and who had not been previously exposed to silica dust has contracted Silicosis. All employees with Silicosis are allocated restricted duties to ensure they are not exposed to dust. The mine’s medical team continues to educate our workforce and provide counselling during medical reviews and screening.

Since 2014, Gold Fields, along with five other companies in South Africa, had been involved in negotiations with the legal representatives of former mineworkers suffering from Silicosis and TB in the so-called ‘Silicosis class action case’. In May 2018, the companies and legal representatives reached an historic settlement in this matter, whereby the gold companies contributed over R5.2bn (US$400m) towards a settlement trust fund. Gold Fields provided an amount of R297m (US$21m) for its share of the settlement cost.

The settlement agreement came into effect on 10 December 2019, when a settlement trust – known as the Tshiamiso Trust – was established. The Tshiamiso Trust is responsible for ensuring that all eligible current and former mineworkers across southern Africa with Silicosis or work-related TB (or their dependants where the mineworker has passed away) are compensated. Over the course of 2020, the Tshiamiso Trust endeavoured to create the capacity and establish the systems needed to

begin the execution of its mandate. However, the Covid-19 pandemic has had a significant impact on its work. In December 2020, the trust made its first payments of R250,000 (US$15,000) each to six claimants.

During 2020, South Deep recorded 13 employees with cardio-respiratory tuberculosis (CRTB), compared with 20 in 2019. Three employees at South Deep were reported with chronic obstructive airways disease during 2020 (2019: four).

MENTAL WELLBEING OF EMPLOYEES IN AUSTRALIA

Against the backdrop of the Covid-19 pandemic, along with the remote nature of our operations in the region, we continued to focus on the mental wellbeing of our employees in Australia.

The programmes at our four Australian mines seek to encourage employees to identify and assist colleagues who may be at risk of mental health challenges. Our efforts this year included:

  Ongoing participation in the national “R U OK?” programme, which provides practical tools on how to start a conversation with those who may be struggling mentally
  The “Mates in Mining” mental health and suicide prevention initiative
  The launch of a mental health movement at our Granny Smith mine
  Mental health first aid training across all operations, as well as the regional executive team. At Gruyere, over 20% of employees are trained mental health officers

Additional mental health initiatives launched across the region include monthly on-site professional support, psychological fitness-for-work assessments, motivational speakers, internal training programmes, meditation, and additional on-site counselling support services. The Australian region also includes mental health in its business risk assessments to ensure adherence to controls designed to prevent and mitigate associated risks.

We are also strengthening our focus on mental health in other regions.

 

 

IAR-57


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

    

LOGO

GOLD FIELDS 2021 BSC KPIs

 

 

Improve engagement levels of employees

 

Increase the number of women in the workplace

 

Deliver the people scorecard as per the plan

 

       
2025 ESG CHARTER TARGETS             ASSOCIATED GROUP RISKS
                      
 

Strategic priority

 

Build a diverse and inclusive workplace

 

 

LOGO   

 

Strategic intent

 

Increase the proportion of women in our workforce, including women in leadership and women in mining in all our operating regions

       

No

 

LOGO

 

 

LOGO

  

Risk

 

Covid-19

 

The impact of Covid-19 on our employees, communities and business

 

Mining costs

 

Rising mining costs, including those relating to ESG

           

LOGO

 

LOGO

 

LOGO

 

LOGO

  

Safety

 

Safety and health of our employees, including occupational illnesses

 

Skills

 

Attraction and retention of skills

 

Ghana contractors

Challenges with local mining contractors in Ghana

 

I&T

 

Failure to modernise operations

                         
           

 

  RELATED SDGs

    
            LOGO   

Good health

and wellbeing

  LOGO   

Decent work and

economic growth

                                 

TRADE-OFFS

Our trade-offs refer to the difficult decisions made during the year in the context of resource scarcity. Below are some of the significant actions taken during a difficult year to do so:

 

 

Increased investment in training and development to meet our objectives of employing from our host communities and targeted population groups

 

Reduced employment levels over time as our mines become increasingly modernised and automated

 

Increased spending to ensure the health and safety of our employees during Covid-19

 

IAR-58


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

OVERVIEW

In a year dominated by the Covid-19 pandemic, keeping our people safe, healthy and productive was our driving focus. We also advanced our diversity and inclusion strategy, implemented new ways of working as part of our drive to attract, develop and retain top skills, and continued to maximise the number of employees from our host communities.

Gold Fields’ workforce of 18,412 people comprises over two-thirds (69%) contractors – significantly higher than 2019 as a result of the construction of our Salares Norte mine in Chile, which is almost exclusively carried out by contracted firms. Beyond this, the composition of

the key demographic groups among our workforce remained stable during 2020 when compared with previous years. Women make up 20% of our total Group workforce and 21% of our leadership positions. In total, 73% of employees in South Africa are Historically Disadvantaged Persons (HDPs) and just 2.8% of employees at our Ghanaian mines are expatriates.

One of the most significant restructuring exercises in Gold Fields over the past two years was the reduction of South Deep’s workforce in 2018 and 2019 following section 189 retrenchments. This significantly changed the workforce profile, and South Deep now has a leaner team in line with the requirements of a

mechanised mine. Furthermore, as we continue to build the required skills set for a mechanised mine, there has been a marked improvement in productivity per employee to 303 tonnes/employee from 286 tonnes/ employee in 2019.

The Group’s focus on host community employment also changed our workforce profile, and host community members comprise 53% of our workforce (2019: 55%). Importantly, this aligns with our strategy of creating value for the communities in the regions where we operate. More information on host community employment is detailed on p85 – 86.

 

 

WORKFORCE BY GROUP AND REGION (END-DECEMBER)

 

    

 

Total

workforce

              Employees                  Contractors     

 

Proportion of

Nationals1

 
     2020                    2020                      2019                    2020                      2019      2020  

Americas

     4,268           568        545           3,700        2,862        98%  

Australia

     2,998           1,668        1,657           1,330        1,266        78%  

South Africa

     4,027           2,226        2,310           1,801        1,674        84%  

West Africa

     7,003           1,063        1,046           5,940        6,198        99%  

Corporate

     116                 116        97                        1        75%  

Total

     18,412                 5,641        5,655                 12,771        12,001        86%  

1 Employees only

KEY HUMAN RESOURCES (HR) METRICS (END-DECEMBER)

 

 Category    2020                  2019                  2018                  2017                  2016  

 Total workforce

     18,412        17,656        17,611        18,594        18,091  

 HDPs employees (%)1

     73        59        72        71        72  

 HDPs employees – senior management (%)1

     51        52        43        57        55  

 Minimum wage ratio2

     1.71        1.97        2.40        2.43        1.97  

 Female employees (%)

     20        20        19        16        15  

 Ratio of basic salary men to women

     1.31        1.14        1.25        1.25        1.31  

 Employee wages and benefits (US$m)3

     412        395        442        506        482  

 Average training spend per employee (US$)

     1,211        1,912        2,469        2,258        1,896  

 Employee turnover (%)

     6        16        354        6        12  

 

1

Excluding foreign nationals but including white females. Percentages are of South African workforce only

2

Entry level wage compared with local minimum wage. This ratio excludes Ghana, as the region only employs management-level employees with the transition to contractor mining

3

This excludes benefits paid to employees working on capital projects

 

SUPPORTING EMPLOYEES DURING COVID-19

The Covid-19 pandemic continued to challenge our people and operations, and is set to continue doing so during 2021. It has taken a terrible toll on our employees – as at mid-March 2021, almost 3,000 of our

colleagues have tested positive for Covid-19, and 10 employees or contractors unfortunately passed away after contracting the virus. We implemented an extensive testing programme at all but our Australian mines which, to date, have not reported a single positive case.

The high number of cases at our operations in South Africa, Peru, Chile and Ghana reflects the high prevalence rate of Covid-19 in our mines’ neighbouring communities. We detail the extensive health and educational programmes we put in place to test, protect and inform

 

 

IAR-59


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

DEVELOPING A FIT-FOR-PURPOSE WORKFORCE CONTINUED

 

our employees, as well as how we assisted those employees who did contract the virus, on our website at www.goldfields.com/covid-19.php.

During 2020, our operations spent approximately US$30m on Covid-19-related initiatives and interventions, such as specialised camp accommodation, testing equipment and facilities, additional labour costs to cover key positions, and transport facilities. Critically, Gold Fields paid all employees their salaries during Covid-19 pandemic. This includes employees who were unable to work during the various stages of lockdown at our Cerro Corona mine in Peru and South Deep in South Africa, which was completely closed for three weeks and only partially opened for a further three weeks.

Gold Fields responded quickly to the outbreak of Covid-19, closing offices and operations and implementing strict lockdown protocols in line with government-imposed regulations in all our jurisdictions. We already had a comprehensive Flexible Work Policy in place, enabling a relatively seamless shift as employees transitioned to remote working wherever possible. Once restrictions eased and employees could return to our sites, we ensured they followed our strict return-to-work policies and procedures, as well as on-site testing, social distancing and sanitation measures. In Peru and Chile, we introduced the concept of “team cells”, whereby employees worked within dedicated teams to limit their contact with other employees. This also made contact tracing easier in those cases were an employee became infected.

Communication was central to keeping employees safe, informed, connected and motivated. We set up a dedicated public Covid-19 portal on our website, which provided a central repository for all information and communication material. Leadership videos and virtual communication guides, published in multiple languages, helped employees to continue work remotely and productively. We also enhanced the Company’s information technology (IT) systems to make remote work easier while ensuring we effectively managed cybersecurity risks.

The mental health of our employees during lockdown and isolation was also a key consideration during the year. All employees have access to free, confidential counselling and support services all hours of the day. These services provided them with additional material on mental health issues during lockdown and isolation, as well as how to deal with balancing the dual demands of family and working from home. We augmented this messaging by additional mental health awareness communication distributed to our employees.

While some employees found remote work challenging, others embraced it. We updated Gold Fields’ Flexible Work Policy during the year to prepare the Company for an expected increase in flexible work applications.

Covid-19 will undoubtedly continue to disrupt our operations and people during 2021. Our teams are developing strategies to assist our employees in dealing with the impacts of a prolonged pandemic, particularly as it relates to mental wellness.

NEW WAYS OF WORKING

Human resources (HR) management is a key component of managing environmental, social and governance (ESG) issues, which have become an increasingly critical consideration for our stakeholders, including our capital providers. As part of developing Gold Fields’ nine ESG priorities – to be included in our ESG Charter with 2025 delivery targets, which will be made public later in 2021 – three relate directly to managing of our workforce. These are:

  Building a diverse and inclusive workplace
  Adopting new ways of working
  Enabling cultural transformation

Adopting to new ways of working is central to our ability to attract, retain and develop the right skills. While embracing new technology is an important part of this ESG priority, it is by no means our only focus area. Gold Fields embraces a broad definition of modernisation that also includes shifts in culture, processes and systems.

Our training and development efforts focus on equipping our people with the skills required by an evolving mechanised, modernised and automated mining industry. In 2020,

we invested US$1,211 per employee in training (2019: US$1,912). The decrease was the result of fewer face-to-face training sessions in light of Covid-19 lockdowns and social distancing regulations. In response to increased virtual working, we raised the number of online training courses to enable our employees to access learning content easily. We will continue to enhance this service offering in 2021.

Our leadership competency framework forms an important part of our talent attraction and leadership development strategy. It focuses on leadership’s ability to create an inclusive and enabling culture, demonstrating leadership excellence and building a credible brand.

Our recruitment process relies on comprehensive data and analytics, and utilises systems to track the time it takes to fill critical roles. Critical role turnover for the Group was 2.4% against a target of 5%. Attracting the next generation of workers to the mining industry is a key focus, and we therefore continue to track the age profile of our workforce. Competitive benefits, flexible work arrangements and opportunities for growth, development and mentorship are, inter alia, aimed at attracting a younger skills set.

At the moment, only 29% of our people are younger than 35. We see this changing as we modernise our operations.

We continued to move HR processes to digital platforms that allow for employee self-service, enhanced mobile systems for engagement and performance management, and e-learning and big data analytics to track people-related metrics.

ENHANCING ORGANISATIONAL CULTURE

Our ESG priority to enable culture transformation requires extensive employee engagement to ensure we build a culture of trust and leadership, while identifying what needs to change. We have completed around 80% of the programmes we initiated following employee climate surveys conducted in 2018 and 2019. These include initiatives to improve communications, learning and development, creating an enabling environment and recognition of employees.

 

 

IAR-60


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

On the back of these programmes, the Company conducted several pulse surveys and focus groups to determine the efficacy of the plans we are implementing, and to gauge whether we improved the scores of previously low-ranking areas. These areas were leadership, communication, recognition, and learning and development. The outcome showed that engagement levels have improved over the past year. Employees also responded positively to Gold Fields’ prioritisation of the safety and wellbeing of its people during the current Covid-19 pandemic.

BUILDING A DIVERSE AND INCLUSIVE WORKFORCE

Our diversity and inclusion strategy includes three areas of focus – workforce diversity, workplace inclusion, and sustainability and accountability – and presents a roadmap for how we can achieve our business and people goals over a five-year period.

In setting targets for diversity and inclusion, Gold Fields focused on representation across all aspects of the employee lifecycle, including attraction, development, promotion and attrition. In doing this – as opposed to setting blanket targets across the business – we can ensure we identify our diversity gaps at a more comprehensive level. This allows us to target actions specifically at those areas and employee lifecycle points where we need to improve.

We have developed a diversity and inclusion dashboard that captures and measures all aspects of representation across the employee lifecycle, including:

  Diversity workforce profile
  Retention
  Talent management
  Inclusive mindset (cultural aspects that foster a diverse and inclusive workplace)

The dashboard seeks to encourage diversity and inclusivity beyond a focus on gender targets. We believe this is a more comprehensive approach towards achieving a workforce that reflects the demographics of the countries in which we operate, while at the same time addressing the skills needs of modern, automated gold mines.

We will continue to focus on increasing female representation during 2021. This decision is based primarily on the fact that we have sufficient baseline data in this area to accurately identify where we need to focus our attention, and to measure performance over time. In the year ahead, we will develop sufficient baseline data for diversity workforce profile, retention, talent management and inclusive mindset.

All our regions have been tasked with comprehensively reviewing and setting targets for:

  Percentage of our workforce classified as women
  Percentage of women in leadership roles (D-band and above)
  Percentage of women in core mining roles

Importantly, these targets will be used to determine long-term incentive awards.

Across our global workforce, 20% of Gold Fields’ employees are women (2019: 20%). Some 54% work in core mining activities, while 21% hold management positions (2019: 20%). The ratio of basic salary for men to women is 1.31 (2019: 1.14). Three out of our eight Board members are women, including the Chairperson. The turnover of women during the year was 22%, compared with the male turnover rate of 78%, both unchanged from 2019.

Gold Fields was also included in the Bloomberg Gender-Equality Index (GEI) for the third year in a row – achieving an average score of 69%, which exceeded the general 66% average achieved across other companies included in the index. We were one of 380 companies across 11 sectors included in the 2021 GEI. We believe that being included in this index reflects the appropriateness of our measures to, among others, promote female leadership, cultivate an inclusive culture and ensure gender pay parity, as well as our commitment to disclosure on these issues.

ORGANISED LABOUR

We remain committed to engaging with our workforce on all material issues that affect them. We uphold employees’ rights to freedom of association and collective bargaining,

and ensure that our contractors also abide by these standards.

Union membership among our employees is 73% at South Deep, and 0% in Ghana due to our transition to contractor mining at Tarkwa and Damang. Contractor union membership in Ghana is estimated to be 6%. In Australia, an estimated 3% of employees belong to unions, while in Peru 25% of our direct workforce and 29% of contractor workforce are unionised. In Chile, 9% of our workforce is unionised.

While union relationships have historically been strained at South Deep, we continue to foster a positive working relationship with union leaders and members since the completion of the section 189 retrenchment process in 2018. This is particularly evident in our joint efforts to mitigate the impacts of Covid-19 on our workforce.

REMUNERATION POLICY

Our remuneration structures are designed to stimulate and incentivise high performance through market-related base pay and benefits, attractive performance-driven incentives, as well as recognition and retention programmes. The core objective of our Remuneration Policy is to attract, retain and motivate top talent to deliver superior results.

The Company is acutely aware of the global concern around excessive executive remuneration, fair and responsible remuneration between management and junior-level employees, as well as pay disparities between genders. We believe that our approach to short and long-term remuneration is substantively fair and consistently applied throughout the Group.

Gold Fields’ Remuneration Policy drives and incentivises the achievement of our strategy, and continuously supports the creation of stakeholder value by aligning performance with commensurate levels of reward. In this way, we align stakeholder interests.

 

LOGO   For details of our Remuneration Policy and 2020 remuneration and incentive payments to executives and directors, refer to our Remuneration Report on p26 – 54 of our 2020 Annual Financial Report (AFR), which can be accessed at https://www.goldfields. com/integrated-annual-reports.php
 

 

IAR-61


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    
   

    

 

    

LOGO

GOLD FIELDS 2021 BSC KPIs

 

 

Improve the strategic planning process

 

Future strategy decision with regard to the investment in Asanko to be made by August 2021

 

Improve our process as it relates to allocating and managing capital

 

Advance Salares Norte Project

 

Improve South Deep people and processes

 

 

ASSOCIATED GROUP RISKS

 

                       
 

No

 

LOGO   

 

LOGO   

 

LOGO   

  

Risk

 

South Deep

Loss of investor confidence due to non-achievement of the mine’s business plan

 

Resource nationalism

Resource nationalism, regulatory uncertainty and government imposts

 

Mineral Resources and Mineral Reserves

Replacing Mineral Resources and Mineral Reserves in Australia, Ghana, Peru and Chile

       

 

LOGO

 

LOGO

 

LOGO

 

LOGO

  

Mining costs

Rising mining costs, including those relating to ESG

 

Chile

Delays and cost overrun relating to the Salares Norte project

 

Infrastructure

Ageing infrastructure

 

I&T

Failure to modernise operations

    
             
                              
       

    RELATED SDGs

 

     
                   LOGO   

Decent work and    

economic growth

   LOGO   

Industrial innovation

and infrastructure

 

TRADE-OFFS

Our trade-offs refer to the difficult decisions made during the year in the context of resource scarcity. Below are some of the significant actions taken during a difficult year to do so:

 

 

Continued investment in near-mine exploration required to ensure life-of-mine extension at our operations

 

Investments in less-risky geographies precludes Gold Fields from accessing potentially rich ore bodies in other countries

 

Focus on sustainable and organic growth without the need of expensive corporate activity, in particular mergers and acquisitions

 

IAR-62


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

OVERVIEW

Despite the elevated gold price and buoyant gold market in 2020, we maintained our focus on delivering on the recent investments we made into our portfolio and, ultimately, increasing free cash-flow (FCF) per ounce of gold produced. Over the years, the Group has built a high quality, global production base by specifically focusing on low-cost, longer-life assets in a limited number of mining-friendly jurisdictions.

The Company employed various elements to refine our production base into one that will maintain production of 2.0Moz – 2.5Moz per year for the next 10 years at costs that are competitive with or lower than our global peers. Our approach to mergers and acquisitions focuses on acquiring or developing lower-cost (than Group average), longer-life assets and disposing of higher-cost, shorter-life assets that management believes can be better served by a company with more time and resources to commit. We continue to invest significant funds in near-mine brownfields exploration to extend the life of our current asset base and capitalise on in-country opportunities to leverage off our existing footprint, infrastructure and skills set.

Our overriding strategic objective is to generate an FCF margin of 15% at a gold price of US$1,300/oz. This is the principal criteria that drives our portfolio management process, and we will only invest in new assets if we meet this hurdle. In addition, we focus strongly on improving the longevity of our production base, and therefore endeavour to allocate our capital to projects or organic opportunities that will ultimately increase the life-of-mine across the Group. To this end, over the past three to four years, Gold Fields significantly invested in developing Gruyere in Western Australia and the major cutback of the Damang pit in Ghana. We will continue to invest heavily throughout 2021, with US$508m budgeted for the development of Salares Norte in Chile, which will materially improve Group AIC and extend mine life when it comes into production in 2023.

Gold Fields remains committed to its strategy of generating cash

to pay dividends to shareholders, reduce debt and share the value we create with our employees, host communities, governments and capital providers. Our capital allocation priorities will remain largely unchanged in 2021, namely:

 

  De-gearing the balance sheet

 

  Funding the Salares Norte capital expenditure (capex)

 

  Maintain our policy of paying dividends between 25% – 35% of normalised earnings

 

  Increasing capex to sustain production at some of our key assets

GROWING OUR GLOBAL FOOTPRINT

Over the years, Gold Fields has established an attractive, geographically diversified portfolio with nine mines and one project in five countries. While our strategy targeted expansion outside of South Africa since the unbundling of our legacy, conventional mines to Sibanye Gold in 2013, we remained very selective in choosing the countries in which to invest.

The Group continued to enhance its global footprint during 2020 by advancing the Salares Norte project in Chile to construction, with first production expected in Q1 2023. This project will add 450koz of gold-equivalent production per annum once it achieves steady state. Importantly, this production will come online at extremely competitive costs, further enhancing the quality of our portfolio.

With 20.5Moz of attributable gold-equivalent Mineral Reserves (excluding Asanko) being outside South Africa at 31 December 2020, our mines in Australia, Chile, Ghana and Peru are well positioned to produce 2Moz – 2.5Moz per year for eight to 10 years.

Encouragingly, the performance of our South Deep mine in South Africa continued to improve in 2020, despite the impacts of the Covid-19 pandemic and the government-imposed shutdowns during Q2 2020 – which effectively lost the mine 52 days of production. The mine took advantage of higher gold prices to generate R558m (US$34m) in net cash-flow even with Rand gold hedges that capped the upside at an average price of R727,000/kg.

DAMANG

INTO THE HEART OF THE ORE BODY

Gold Fields reinvested almost US$370m in our Damang mine in Ghana over the past four years to extend the life-of-mine to 2025. The Damang Reinvestment project commenced in December 2016 and entailed a major cutback to both the eastern and western walls of the Damang pit.

Since commencement, the project has steadily outperformed plan, with the Amoanda pit providing a high-grade source of ore during early production years. At the end of December 2020, 48 months into the project, total material mined amounted to 149Mt, 14% ahead of the project schedule. Gold produced for the same period amounted to 756koz, exceeding the planned 647koz by 17%. Total project capital incurred as at 31 December 2020 was US$367m versus a budgeted US$345m, largely driven by the additional capital waste tonnes mined.

Project capex continued to decrease in 2020 with the bulk of the capital incurred during the first three years of the project. Non-sustaining capex decreased to US$6m in 2020 from US$71m in 2019, US$125m in 2018 and US$117m in 2017, in line with the project schedule.

From a production perspective, 2020 was a year of two halves. During H1 2020, production was impacted by lower grades as mining transitioned through the Huni sandstone lithology, which exhibited more variable grades than anticipated. The bulk of the Huni sandstones were mined out by mid-year, at which point mining activities moved into the higher grade (and more consistent mineralised) Tarkwa phyllites deeper in the Damang pit. As a result, both production and costs improved markedly during H2 2020. We expect this trend to continue over the next three years.

Encouragingly, Damang generated net cash-flow of US$66m in 2020 after turning net cash-flow positive in 2019 (generating US$24m) for the first time since the start of the Reinvestment project. The mine is expected to produce 275koz in 2021 at AISC

 

 

IAR-63


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

CREATING A GLOBAL, SUSTAINABLE PORTFOLIO CONTINUED

 

of US$730/oz and AIC of US$790/oz. It is anticipated that Damang will maintain similar production levels with healthy cash-flows over the next three years to 2023, at which point production begins to tail off. As such, the team has commenced studies on a further pit cutback, which has the potential to extend the life-of-mine beyond 2025 by a further four years.

SALARES NORTE

PROGRESSING TO PLAN

The Salares Norte project is a 100% Gold Fields-owned, gold-silver deposit. It is located between 3,900m and 4,700m above sea level in the municipality of Diego de Almagro in the Atacama region of northern Chile. Mineralisation is contained within a high-sulphidation epithermal system, offering high-grade oxides. The project is currently in its construction phase, and is expected to meaningfully change the future profile of Gold Fields by accelerating growth in production and reducing Group AIC.

Land easement for the project was granted for 30 years on 30 May 2016. We obtained water rights in December 2016, with the regulator granting Gold Fields access to more than double the amount of water that the project requires. The Atacama Environmental Assessment Commission approved Salares Norte’s Environmental Impact Assessment (EIA) on 18 December 2019. As a result, an updated feasibility study (FS) was presented to the Board in February 2020, which subsequently approved the construction and development of the project.

The estimated project capex of US$860m (in 2020 terms), to be spent over the 33-month construction period, will be funded from a combination of the US$250m equity raised in February 2020, the strong operational cash generation of the Group and existing debt facilities, if required. First production is planned for Q1 2023, with life-of-mine production of 3.7Moz gold-equivalent over an 11.5-year period. Average annual production is forecast to be 450koz gold-equivalent for the first seven years, decreasing to 355koz

gold-equivalent for the next three years. AISC over the life-of-mine is anticipated to amount to US$552 per gold-equivalent ounce.

Construction activities were relatively unaffected by the Covid-19 pandemic during 2020, and the project remains on schedule. US$151m was spent on Salares Norte in 2020, including exploration and project expenses of US$30m, initial capex of US$97m and prepayments accounting for the majority of the balance. At the end of December 2020, engineering progress was 97% complete, construction progress 16% complete and total project progress 27%, all ahead of plan. The mining contractor began pioneering works on 1 October, as planned. Pre-stripping of the pit and construction of the processing plant commenced during January 2021, in line with the project’s construction schedule. At the end of December, 87% of the project’s scope of work had been committed to and priced, including 99% of plant and infrastructure orders and 95% of contracts, significantly reducing the risk of price escalations.

In addition to the Agua Amarga and Brecha Principal ore bodies, which will be mined over the initial 10-year period, there is significant exploration potential within the surrounding area. Salares Norte controls 84,000ha of mineral rights in the Salares Norte district and has carried out extensive district-wide exploration within a 20km radius of the plant site. During 2020, a total of 17,504m were drilled, focusing on the Horizonte Project, while additional work was done at the Agua Amarga North and Brecha West targets near the Salares Norte pit. We will continue to invest in exploration within the area to add to the production pipeline from 2025 onwards.

While there are no indigenous claims or community presence on the concession or the dedicated access routes, Salares Norte embarked on an extensive engagement programme with three indigenous communities within its wider vicinity and entered into long-term agreements with them. The project’s principal area of social influence – and potential

labour-sending area – is the Diego de Almagro municipality, approximately 125km away.

A critical element of the EIA approval was the relocation of endangered Short-tailed Chinchilla in the area. This work, which is carried out by independent environmental experts, is ongoing and we are in close contact with the regulator on the relocation programme. For details see p98.

SOUTH DEEP

CONTINUED IMPROVEMENT

South Deep continued to show operational improvements in 2020 despite the impacts of the Covid-19 pandemic, which included a government-imposed shutdown. In compliance with country-wide restrictions, we placed South Deep on care and maintenance during April 2020. While the mine operated well below its full labour complement for the remainder of the quarter, the workforce gradually ramped up to its full complement towards the end of Q3 2020.

Despite this interruption, South Deep continued to improve in most production metrics during 2020 as a result of several initiatives we implemented following the restructuring at the end of 2018, including:

 

  Purposeful Visible Felt Leadership

 

  Reinvigorating our leadership system

 

  Improving face time and increasing the effectiveness thereof

 

  Enabling logistics

 

  Implementing innovation and technology

The Siyaphambili intervention, a management and leadership programme focusing on the capacity and capability of our front-line supervisors and middle managers, continued to bear fruit during 2020. As a result, we reached the following key mining achievements during 2020:

 

  Destress square metres mined increased by 34% to 35,545m² in 2020 from 26,606m² in 2019. Longhole stoping volumes mined increased by 11% to 697,501 tonnes in 2020 (2019: 631,281 tonnes) as a result of improved stope availability, equipment
 

 

IAR-64


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

productivity and increased stope extraction quality. Encouragingly, stoping compliance to plan increased to an average of 90% in 2020 from 79% in 2019

 

  After placing a record 426,338m3 of backfill in 2019, a total of 322,823m3 was placed in 2020 as the backlog was eroded. With this, we further improved stope turnaround time to an average of 4.8 months in 2020 from 5.5 months in 2019 and 7.8 months in 2018

 

  The mine’s overall productivity improved to 303 tonnes per employee costed (TEC) in 2020 from 286 tonnes per TEC in 2019.

Machine productivity decreased slightly to 72m/rig in 2020 from 78m/rig in 2019, but is still up from 59m/rig in 2018

The key improvements in production efficiencies over the past three years are depicted in the table below.

 

Activity    2020      2019      2018  

Development

(m/rig)

     72        78        40  

De-stress

(m/rig)

     72        40        23  

Longhole

stoping (t/rig)

     12,968        11,966        6,708  

Despite the impacts of Covid-19, South Deep’s gold production increased by 2% to 7,056kg (226.9koz) in 2020 from 6,907kg (222.1koz) in 2019. Encouragingly, the mine generated net cash of US$34m in 2020, which was more than double the US$15m generated during 2019. For 2021, we expect a strong increase in production (+28%) to 290koz. Furthermore, we are reasonably confident that we can increase production volumes between 15% – 20% over the next three to four years.

 

 

STRATEGIC INVESTMENTS

Over the years, Gold Fields has acquired strategic interests in a number of smaller mining companies. Taking advantage of favourable equity market conditions, we have steadily reduced these non-core equity holdings over the past two years. In 2019, we raised US$179m through these sales, with the proceeds being used to pay down a portion of our debt. In 2020, we sold our 16.4% stake in ASX-listed Cardinal Resources, which holds exploration rights in northern Ghana, to Norgold for A$37m (US$23m).

 

Gold Fields acquired a strategic 17% shareholding in Chakana Copper in 2019 for C$8m (US$6m). In February 2021, we participated in a rights offer that increased our holding to 19.9% for an additional C$3m (US$2m). Chakana Copper is currently advancing the prospective Soledad gold-silver project in central Peru.

Our current strategic shareholdings are shown in the table below.

 

 

GOLD FIELDS’ NON-CORE INVESTMENTS (31 DECEMBER 2020)

 

Investment  

Shareholding

%

   

Market value

(US$m)

 

Galiano Gold (formerly Asanko Gold)

    9.8       25  

Rusoro Mining

    25.7       4  

Chakana Copper1

    16.8       7  

Magamatic Resources

    10.9       3  

Lefroy Exploration

    18.0       4  

Orsu Metals

    6.1       1  

Woodjam Copper

    16.3       3  

Maverix Metals warrants

            13  

Total value

            60  

 

1

This shareholding was increased to 19.9% in February 2021

    

FAR SOUTHEAST

There were no material developments relating to the Far Southeast (FSE) project in the Philippines during 2020. The project is held by Far Southeast Gold Resources, 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 Company of the Philippines holds the remaining 60% interest and manages the existing mining operation.

FSE’s mining licence was up for renewal for 25 years in 2015. The Philippine government ruled that Free Prior and Informed Consent was required for the renewal, however, this requirement was overturned during independent arbitration and, in 2018, by the country’s Court of Appeals. The government is appealing that ruling in the Supreme Court, where the case is currently pending.

Gold Fields reversed previous impairments of its investment in FSE, resulting in a carrying value of US$144m at end-2020, based on the fair value less cost of disposal of the investment, which was indirectly derived from Lepanto’s market value on the Philippine Stock Exchange. Gold Fields’ holding costs in FSE are approximately US$0.1m, related mainly to staff and administrative costs, managing existing drill core, environmental monitoring, community relations work, as well as activities to support the permitting process.

 

 

IAR-65


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

    

   

    

 

CREATING A GLOBAL, SUSTAINABLE PORTFOLIO CONTINUED

 

 

LIFE EXTENSION THROUGH NEAR-MINE EXPLORATION

Near-mine (brownfields) exploration is key to Gold Fields’ strategy as it offers one of the lowest-cost opportunities for adding ounces and growing cash-flow, particularly on a per share basis. The value in near-mine exploration lies in:

 

  Knowledge of the ore bodies, which enables our 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

We believe that brownfields exploration provides a robust platform for regional growth. In addition to growing Gold Fields’ Mineral Resource and Mineral Reserve base, near-mine exploration also extends the life of the Group’s existing assets and ensures that each region can continue leveraging its infrastructure.

In 2020, Gold Fields spent US$76m on near-mine exploration (2019: US$73m), which supported a total of 367,600m of near-mine drilling

(2019: 428,980m). We incurred the majority of this spending – US$50m (A$72m) (2019: US$58m (A$84m)) – at our Australian mines. We spent US$6m in Ghana, which is lower than the US$13m spent in 2019. Amid a renewed focus on extending Tarkwa’s life-of-mine, and further resource definition drilling at the Damang cutback project we have budgeted US$9m for the region (excluding Asanko) in 2021. Asanko is scheduled to spend US$5m on exploration in 2021.

Looking ahead, we have budgeted US$101m for near-mine exploration during 2021 (excluding Asanko), of which US$63m (A$84m) will be at our Australian operations, US$9m at Tarkwa and Damang, and US$27m at Salares Norte.

Following are details of the near-mine exploration activities at our Australian and Ghanaian mines during 2020. South Deep and Cerro Corona do not undertake exploration on their properties.

ST IVES

At St Ives, total 2020 exploration spend amounted to US$24m. A total of 130,625m were drilled during the year, increasing Mineral Reserves by 17% to 2.7Moz, net of depletion.

Key outcomes:

 

  17% increase in Mineral Reserves

 

 

  Extended Invincible complex both laterally and at depth

ST IVES MINERAL RESERVES RECONCILIATON Gold (Moz)

 

LOGO

AGNEW

We spent US$14m on exploration at Agnew during 2020, with a total of 59,967m drilled during the year. Encouragingly, Agnew managed to replace Mineral Reserves after depletion again. Mineral Reserves increased by 19% to 917koz. Agnew is now in the strongest position it has been since December 2013.

 

 

LOGO

 

IAR-66


Table of Contents

Gold Fields Integrated

 

              Annual Report

  2020    

 

OUR PERFORMANCE

   

    

 

 

The enhanced focus on exploration over the past few years is starting to yield extremely encouraging results, and Agnew’s outlook is increasingly positive. The Waroonga North ore body continued to grow laterally and at depth during 2020. We are also seeing further extensions of Genesis and Sheba at New Holland.

Key outcomes: