Gold Fields' approach to enterprise risk management (ERM) is based on the requirements of King
IVTM,
the South African Corporate Governance Code of Conduct and ISO 31000, the international guideline
on risk management. The Group also subscribes to the risk management requirements of the ICMM's
10 Principles.
Gold Fields' ERM process comprises the following three pillars, which are deployed intuitively
and form
part of our day-to-day operations:
Risk management is integrated into all business processes. Leadership teams at corporate, country
and mine level conduct formal quarterly risk management reviews, assessing risks to the business and
tracking and monitoring progress against mitigating actions. These reviews are then presented to the
Board's Risk Committee biannually for verification.
As a global company, we continue to be shaped by the external dynamics of the regions where we
operate. We discuss the impact of longer-term, emerging global trends on
Gold Fields and in general.
Understanding the relationship between our strategy and our approach to evaluating risks as a basis
for setting Risk Appetite and Tolerance (RA&T) is crucial. Firstly, RA&T does not relate to the risk itself,
but rather the consequences of such a risk – this distinction is important to establish a practical set
of
RA&T positions.
We use our strategic objectives as a starting point, the achievement of which is critical for setting our
RA&T levels. It follows that the consequences of the risks we are exposed to can create a variance
from where we aim to be in terms of our strategic objectives. The level of variance we are willing to
accept without making significant changes to the strategic objectives sets the variance point for our
risk appetite, while the level of variance we can accept in each of our top strategic risks before we
need to review our risk treatment plans determines our tolerance position.
To support the delivery of strategic objectives and business plans – and to monitor tolerance positions
– Gold Fields has a comprehensive monthly and quarterly business review process in place.
Performance is monitored and shortcomings are addressed swiftly and effectively. A colour-coding
system is used during presentations to alert executives if targets are being achieved, and enables
discussions around remediation measures.
Shortly after the quarterly business reviews are concluded, the Board conducts quarterly governance
and oversight meetings, as part of its annual Board cycle, during which significant aspects of the
business are comprehensively questioned and reviewed. Any misalignment with Company objectives
or good corporate governance is discussed and remedial action requested. This is in line with our
formal Approval Framework, which strictly defines decision parameters and risk tolerance.
Gold/currencies
Volatility of the gold price and currency exchange rates
MITIGATING STRATEGY
We design our business plans based on a conservative gold price and set FCF targets for our operations.
This
approach is reinforced by our Group strategy, which stresses the importance of asset optimisation as well
as
growth. These plans are monitored through monthly and quarterly cost, capital and production reviews,
during
which we discuss and implement any required remedial actions. Gold Fields does not hedge metal or foreign
exchange prices unless we seek to protect cash-flows at times of significant capital expenditure.
OPPORTUNITIES FOR VALUE CREATION
- Maximising the benefits of high gold prices while building resilience for market downturns
MITIGATING STRATEGY
We have business, productivity and cost improvement processes and programmes in place at all our
operations. This is supported by our Innovation and Technology Strategy to reduce costs and enhance
revenue through production increases. We conduct monthly and quarterly business cost and capital reviews
to
ensure spending remains within budget. Our mines provide cost guidance to the market at the beginning of
each financial year. Low costs are a critical criteria in assessing new investment opportunities.
OPPORTUNITIES FOR VALUE CREATION
- Improved margins
- Increased resilience through the cycles
- Positive impact on Mineral Reserves and Mineral Resources and lives-of-mines
Safety
The safety, health and wellbeing of our workforce, including occupational illnesses
MITIGATING STRATEGY
The safety, health and wellbeing of our employees are critical to the way we do business. With safety as
our
number one priority, we continuously review and upgrade our safety systems, culture and programmes. In
line
with this philosophy, we appointed external safety experts to perform a safety diagnostic assessment
across
the Group during Q1 2024, the results of which will inform our Safety Strategy until 2025. We also
appointed a
dedicated Group safety executive to oversee the review and the implementation of the recommendations.
OPPORTUNITIES FOR VALUE CREATION
- Improved cultural and psychosocial insights into our business
- Improved operational performance
Salares Norte
Delays to project completion and ramp-up
MITIGATING STRATEGY
Delays to the project during 2023 adversely impacted Group cost and production guidance. As a result, we
expect revised first gold by April 2024. To further ensure we meet these targets, we appointed additional
contractor support and a Group-level Commissioning Manager, implemented short-interval controls and
increased oversight and supervision. We intend to have Salares Norte's operational workforce on-site as
early
as possible to support production ramp-up once the project is completed.
OPPORTUNITIES FOR VALUE CREATION
- Early involvement of the operational workforce to support production ramp-up
Political risk/resource nationalism
Resource nationalism, regulatory uncertainty and government imposts, and elections in
several of our jurisdictions
MITIGATING STRATEGY
Our regional management teams regularly engage with the relevant government authorities to ensure
compliance with investment agreements. We undertake additional engagement through our regions' mining
associations in collaboration with our peers. More recently, we strengthened government engagement
through annually updated government action plans, which are informed by independent country risk
assessments. As a last resort, we review our legal options, particularly in terms of adherence to
investment
agreements.
OPPORTUNITIES FOR VALUE CREATION
- Ensuring our portfolio investment choices are informed by political risk assessments
Skills
Inability to attract and retain top-level, diverse talent and skills for high-impact and
mission-critical roles
MITIGATING STRATEGY
Gold Fields' business depends on fit-for-purpose human resource structures to ensure we meet operational
requirements while maintaining an increasingly diverse and inclusive workforce. 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 scarce skills.
OPPORTUNITIES FOR VALUE CREATION
- Refining our operating model to optimise and leverage key skills and provide broader development
opportunities for our people
Mineral Resources and Mineral Reserves
Failure to replace Mineral Resources and Mineral Reserves beyond mine depletion
MITIGATING STRATEGY
We continue to evaluate value-accretive opportunities to expand our business, including acquisitions,
disposals, JVs, new mine builds and other strategic projects. Our regions have comprehensive near-mine
exploration programmes in place, the performance of which is monitored during quarterly business reviews.
Over the past 15 years, our Australian mines have consistently replaced depleted Mineral Reserves and
more.
OPPORTUNITIES FOR VALUE CREATION
- Exploring how to leverage new approaches, relationships and technologies to grow our business
JVs
Successful completion and integration of the new JVs into Gold Fields' portfolio
MITIGATING STRATEGY
The Group developed a protocol for when we enter new JVs, as well as how these arrangements should be
governed, the joint communication process we follow and how we align cultures and values with different
parties. The Windfall project in Canada and proposed JV in Ghana are each managed by a JV Committee,
formed along functional lines, with oversight from a Steering Committee.
OPPORTUNITIES FOR VALUE CREATION
- Building better and more effective relationships with our JV partners
- Improved contractor JV to deliver Group objectives
- Additional opportunities to effectively apply the Group's JV model
Contractors
Failure to replace Mineral Resources and Mineral Reserves beyond mine depletion
MITIGATING STRATEGY
We continue to evaluate value-accretive opportunities to expand our business, including acquisitions,
disposals, JVs, new mine builds and other strategic projects. Our regions have comprehensive near-mine
exploration programmes in place, the performance of which is monitored during quarterly business reviews.
Over the past 15 years, our Australian mines have consistently replaced depleted Mineral Reserves and
more.
OPPORTUNITIES FOR VALUE CREATION
- Exploring how to leverage new approaches, relationships and technologies to grow our business
ESG
ESG-related stakeholder expectations and activism
MITIGATING STRATEGY
With our commitment to ESG as one of our three strategic pillars, we pursue a range of comprehensive 2030
targets devised after extensive work with our operations – including setting capital budgets –
to ensure that,
while ambitious in nature, they are achievable. We see this strengthened commitment to ESG as an
opportunity to build on our leadership position and reputation, and report annually on our progress
against all
targets.
OPPORTUNITIES FOR VALUE CREATION
- Leveraging our ESG performance and reporting as a competitive advantage to drive a stronger licence to
operate
- Attracting and retaining critical skills
- Accessing more affordable capital
Social licence
Loss of social licence to operate and stakeholder value creation
MITIGATING STRATEGY
We continue to strengthen our relationships with host communities through effective engagement and
prioritising
host community employment, procurement and investment. Furthermore, we started developing flagship
community
programmes in each region to ensure we have a sustainable impact on our communities beyond the
lives-of-mine of
our operations. In Australia, we have an Aboriginal Engagement Strategy – which is implemented
gradually to guide
relations with and create opportunities for Indigenous Peoples across our business.
OPPORTUNITIES FOR VALUE CREATION
- Effective community relations, which drive a stronger licence to operate
- Key lever to attract investors
Climate change
Failure to implement climate change mitigation and adaptation measures
MITIGATING STRATEGY
Given the changing environment and growing impact of rising global temperatures and extreme weather
events, we
are reviewing our climate change vulnerability risk assessments and adopted a comprehensive
Decarbonisation
Strategy. 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 have put in place a number of mitigation and adaptation measures to deal with the
impact of
extreme weather events, such as insurance cover and compliance with industry standards such as the GISTM.
OPPORTUNITIES FOR VALUE CREATION
- Greater resource and energy efficiency
- Ensuring energy and water security at our operations
- Greater mix of renewable electricity
- Leveraging new technologies toward the Gold Fields Mine of the Future
- Low-carbon preferred investee company
South Deep
Failure to maintain performance momentum and alignment with the build-up plan
MITIGATING STRATEGY
The South Deep team will continue to implement its management systems to drive disciplined execution of
the mine's plans while implementing business improvement initiatives across the value chain. Performance
against agreed targets and milestones is measured monthly and reported quarterly to the Corporate Office
and the Group's Board.
OPPORTUNITIES FOR VALUE CREATION
- Establishing a robust mine planning process as a fundamental driver of performance
Cybercrime
Cybercrime/loss of information and communication technologies (ICT) data
MITIGATING STRATEGY
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. All our mines and offices, except for those in
Chile, are
ISO 27001 cybersecurity certified.
OPPORTUNITIES FOR VALUE CREATION
- Improved identification and classification of data
- Rationalisation and standardisation of operational technology
Water security
Water pollution, security and reduction in freshwater consumption
MITIGATING STRATEGY
All our operations are certified to the ISO 14001 environmental standard, which requires sound water
management and disclosure. Furthermore, in 2021 we developed and integrated three-year regional water
management plans across our operations. Finally, water recycling, reuse and conservation practices are in
place in all regions, and we are on track to meet our 2030 targets.
OPPORTUNITIES FOR VALUE CREATION
- Ensuring water security for all catchment stakeholders
- Building sound relationships with communities and other catchment stakeholders
- Cleaner and more resilient catchments and their ecosystems, with improved ecosystem services
