SUSTAINABILITY Energy and climate change

Energy and climate change

CLIMATE CHANGE

Gold Fields is acutely aware of the severity of climate-related risks, as well as societal expectations that companies should play their part in reducing carbon emissions. Furthermore, we also understand the value of the opportunities available in a low-carbon future. The impacts of climate change are real and immediate, mainly due to:

  • The long-term risks posed by climate change to the Group’s operations and surrounding communities
  • Increasing efforts to regulate carbon emissions in most of our jurisdictions
  • Taxes on non-renewable energy consumption increasingly being imposed by governments

Our stakeholders – investors, in particular – expect us not only to take concrete actions to limit our carbon emissions but also demand that we report comprehensively on the impact of climate change on our operations.

In response, Gold Fields announced a comprehensive set of 2030 targets for the most material of its environmental, social and governance (ESG) priorities in December 2021 (p62). These were headlined by our commitment to mitigate our impact on global warming by announcing three key targets:

  • Reducing our total (net) Scope 1 and 2 carbon emissions by 30% by 2030 against a 2016 baseline, despite planning to grow attributable gold production from 2.30Moz to approximately 2.80Moz over the period
  • Over the same period, reducing these (absolute) emissions by 50% compared with what they would have been under business-asusual operating conditions
  • Reiterating our commitment to net-zero emissions by 2050 in line with our signature of the Paris Agreement

The investment in decarbonising Gold Fields is estimated at approximately US$1.2bn until 2030. Further clarity on the costs, and savings will be provided once detailed studies on all relevant projects have been completed, but it expected that the largest share of the capital will be funded through power purchasing agreements (PPAs) with independent power producers (IPPs). All projects are expected to be NPV positive.

To date, we have invested close to US$400m in energy projects, mostly at our Australian mines, and largely funded through PPAs.

Failure to implement climate adaptation measures remains among Gold Fields’ top 10 Group risks. We review our vulnerability to climate change at least every five years, and update Groupwide strategies and programmes accordingly. We completed a review in 2021 and published relevant details in our 2021 CCR.

Details of our energy management and climate change approach, policies and guidelines can also be found at https://www.goldfields.com/energy-andclimate- change.php

ENERGY AND CARBON MANAGEMENT

Gold Fields’ operations depend on consistent energy supplies. In 2021, our total energy spend amounted to 18% of our total Group operating costs.

Gold Fields has an Energy and Carbon Management Strategy in place to address our key energy priorities: security of supply, costeffective electricity, reducing energy consumption and limiting the impact of our energy consumption on the climate. This is supported by operational plans and targets that align with the global ISO 50001 energy management standard. Our Cerro Corona, Damang and Tarkwa mines have been certified to the ISO 50001 standard. We aim to have all our operations certified by end-2023.

  • GROUP ENERGY CONSUMPTION

  • GROUP ENERGY SPEND AND SAVINGS1

     

  • GROUP SCOPE 1 – 3 CO2e EMISSIONS2


The key initiatives to achieve our energy objectives are:

  • Increasing the use of renewables by our operations
  • Improving energy efficiencies and eliminating wastage
  • Rolling out training and awareness programmes
  • Increasing the use of zeroemission vehicles

While energy efficiency initiatives have a dual benefit of improving energy productivity and reducing our carbon footprint, a number of our initiatives significantly reduce our carbon footprint without also necessarily reducing our energy usage – such as switching fuel from diesel to gas, or from gas to renewable sources. We continue to implement energy efficiency initiatives, including:

  • Optimising processes and systems
  • Optimising compressed air systems and new ventilation fans and controls
  • Using high precision drill rigs to minimise rework
  • Using fuel additives and other business improvement initiatives to optimise equipment energy consumption
  • Using larger trucks to move more material with better fuel efficiencies

RENEWABLE ENERGY

In our quest to strengthen security of affordable energy supply, reduce costs and decarbonise our energy sources, we have successfully started integrating renewable energy into our energy supply mix. Two of our Australian mines, Agnew and Granny Smith, have renewable micro-grids and storage solutions that are fully operational. All our mines are building or evaluating renewables plants, carrying out trials on battery-electric or low-carbon vehicles, or exploring options to increase the renewable energy portion of their energy consumption.

The Group obtained 4.3% of its electricity from renewable sources in 2021 (12.5% including hydro electricity used by Cerro Corona). Based on our current estimates, we expect this to increase to 15% (22%, including hydro) by 2025, with renewables coming on stream at St Ives, South Deep, Gruyere and Salares Norte by then.

Most of our renewable plants are, or will be, managed by IPPs, who recoup their capital investment via a long-term supply agreement with our mines. Where funding from Gold Fields is required, this is largely from operational cash-flows.

We envisage that renewables will account for about 70% of the Group electricity mix by 2030 and, by 2050, this will increase to 100%. The remaining emission savings in terms of our plans will stem from further operational energy efficiency initiatives, as well as the gradual replacement of our diesel-powered fleet with zero-emission vehicles. We are piloting some of these vehicles at various mines while also working with our peers in the ICMM to ensure rapid progress in rolling out safer and cleaner vehicles.

In Australia, we are also teaming up with our mining peers in the Electric Mine Consortium to explore ways of eliminating emissions at mining sites.

Australia

Agnew is our flagship renewables mine, and one of the first gold mines in the world to generate over half of its electricity requirements from renewable sources, namely wind and solar. Agnew averaged 57% overall renewable electricity in 2021, with up to 85% in good weather conditions. The mine achieved a 42% net Scope 1 and 2 carbon emission reduction in 2021. We are exploring additional opportunities to increase this percentage by reducing gas engine constraints, introducing renewable energy storage and adding more solar panels.

Granny Smith’s hybrid storage system – comprising 8MW on-site solar, 2MW battery power systems and a gas power plant – generates 10% of its electricity supply from renewables. We are making good progress on Gruyere’s 12MW solar plant, with commissioning scheduled for Q2 2022.

At St Ives, a feasibility study continues to evaluate alternative power sources for when the current agreement ends in 2024. We are targeting 75% – 85% renewable energy from a solar and wind microgrid and other options.

During 2021, 10% of the region’s electricity requirements were met through renewables, up from 8% in 2020. This is set to rise significantly over the next few years. Our investment in renewables was mostly responsible for the region’s 2021 carbon emissions savings of 90kt CO2e.

South Africa

The South Deep solar project is in progress and will be commissioned during Q3 2022. South Deep has received in principle approval to increase the solar plant’s capacity from 40MW to 50MW, raising the cost from R660m (US$42m) to R715m (US$46m).

The solar plant will provide approximately 24% of South Deep’s electricity needs and could save the mine an estimated R125m (US$8m) a year, or more, depending on the tariffs charged by the state provider Eskom. Estimated emission reductions a year are 110kt CO2e. The mine is also studying the use of wind power and battery storage.

Chile

We are developing a 26MW hybrid solar and thermal power solution for the Salares Norte project. Diesel generators will provide 16MW, which will be functional once the operation starts production in early 2023. The solar plant will add 10MW in Q1 2024, which is set to save the mine over US$7m in energy costs over the first 10 years, as well as US$1m in carbon tax offsets.

ENERGY AND CLIMATE CHANGE PERFORMANCE

Overall, energy spend increased by 25% during 2021 to US$341m (2020: US$257m), mainly due to higher oil prices.

Total energy spend, which combines the Group’s electricity and fuel spend, amounted to 18% of total operating costs in 2021, up from 16% in 2020. This represents 14% of AISC (2020: 12%) and translates to AISC of US$139/oz (US$110/oz).

Gold Fields made a net gain of US$21m on oil price hedges during 2021 (US$15m loss in 2020), as the price of oil on international markets increased substantially. These oil price hedges at our Ghanaian and Australian operations remain in place until the end of 2022.

Total energy consumption increased by 6% to 13.9PJ compared with 13.1PJ in 2020. This is mainly due to a 10% Group increase in tonnes mined. The energy mix is made up of 51% haulage diesel, 48% electricity and less than 1% of other fuels. Energy intensity was little changed at 5.66GJ/oz (2020: 5.64GJ/oz).

During 2021, Gold Fields spent US$3m on energy and emission savings initiatives, which resulted in energy savings of 1.21PJ in 2021 (2020: 1.09PJ), and long-term cost savings of US$34m – equal to US$14/oz. Since the launch of our Energy and Carbon Management Strategy in 2017, Gold Fields has realised cumulative energy savings of 3.3PJ, resulting in combined cost savings of approximately US$140m.

Emissions performance

Our carbon emissions performance mirrors our operations’ energy use trends. Total Scope 1 and 2 CO2e emissions during 2021 amounted to 1.71Mt, a 7% increase from 1.61Mt in 2020, despite mining 10% more tonnes. Emission intensity increased marginally to 0.70t CO2e/oz in 2021 from 0.69t CO2e/oz in 2020. Emissions reductions from savings initiatives totalled 306kt CO2e during 2021 (2020: 253kt CO2e), 7% higher than the 287kt CO2e targeted.