SUSTAINABILITY Energy and climate change

Energy and climate change

CLIMATE CHANGE

Gold Fields is acutely aware of the severity of climate-related risks. Furthermore, we also understand the value of the opportunities available in a low-carbon future. The impacts of climate change are real and immediate, 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 imposed by governments

We are committed to the Paris Agreement and the journey towards a net-zero carbon future by limiting global warming to well below 2°C, preferably 1.5°C, by 2050. In 2018, Gold Fields became the first South African mining company to endorse the recommendations of the Financial Services Board’s TCFD. We published our first TCFD Report in 2019, which serves as our baseline to monitor our climate change-related performance. This report replaced previous submissions to the CDP (formerly the Carbon Disclosure Project), while we continue to submit an annual CDP Water report.

2020 energy and carbon emission targets   Performance  
Ensure that energy security is not one of the top 10 Group risks   Security of power supply and cost of energy is risk number eight in our Group risks  
Realise 5% – 10% energy savings off our annual energy plans each year   2,077TJ of energy savings for the period 2017 to 2020, equal to 4% of energy consumption for the period  
Achieve 80% of 800kt CO2e of cumulative carbon emission reductions between 2017 and 2020, equivalent to a 17% reduction in carbon emissions each year   639kt CO2e in carbon emissions reductions from 2017 to 2020  

The risk of failure to implement climate adaptation measures remains among Gold Fields’ top 10 Group risks. We review our vulnerability to climate change every five years, and update Group-wide strategies and programmes in response. The next review is scheduled for 2021.

Together with our 2020 IAR, we are publishing our second climate change report that is aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) Report. The report provides details on our climate change risks, opportunities, strategies, policies and performance trends.

Climate Change Report 2020 - PDF 4MB
ENERGY AND CARBON MANAGEMENT

Gold Fields’ operations are highly dependent on consistent energy supply. Our total energy spend during 2020 amounted to 16% of our Group operating costs. Appreciating the importance of energy security and cost management, in 2017 our updated Energy Management Strategy set out a number of aspirational goals for 2020.

Gold Fields has an Energy and Carbon Management Strategy in place, supported by operational plans and targets that are aligned with the global ISO 50001 energy management standard. The purpose of these plans is to reduce energy consumption, energy costs and carbon emissions by, among others:

  • Switching from diesel-generated to cleaner gas-generated electricity
  • Increasing the use of renewables by our operations
  • Improving energy efficiencies and eliminating wastage
  • Rolling-out training and awareness programmes
  • By March 2020, our Cerro Corona, Damang and Tarkwa mines were certified to the ISO 50001 standard. We aim to have all our operations certified during 2021.

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

  • Switching from diesel electricity to gas-generated and renewable energy
  • 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
  • Retrofitting old light fittings with light-emitting diodes (LEDs)
RENEWABLE ENERGY

In our quest to strengthen security of affordable energy supply, reduce costs and decarbonise our energy sources, we successfully started integrating renewable energy into our energy supply mix. Two of our Australian mines, Agnew and Granny Smith, installed renewable microgrids and storage solutions during 2020. Our other mines are also exploring options to increase the renewable energy portion of their energy consumption.

Gold Fields has a long-term commitment of 20% renewables at all its new projects. This is being realised at our most recent mine, Gruyere, and the Salares Norte project in Chile, both of which signed contracts with independent power producers to provide solar energy.

The percentage electricity from renewable sources for the Group was 3% at the end of 2020 (10% including a portion of hydro power at Cerro Corona). Based on our current estimates, we expect this to increase to 15% (21% including hydro power) 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 independent power producers, who recoup their capital investment via a longterm supply agreement with our mines. Where funding from Gold Fields is required this is largely from operational cash-flow.

Australia

Agnew is our flagship renewables mine, and one of the first gold mines in the world to generate over half of its energy requirements from renewable sources. The mine completed its hybrid electricity plant during Q2 2020 after the commissioning of five wind turbines. The A$113m (US$85m) microgrid – which comprises a 3.5MW solar, 18MW wind and 13MW battery energy storage system – provides, on average, 55% of Agnew’s energy requirements. However, this can increase to 70% on a day with favourable weather conditions. We are in the process of evaluating further energy storage systems.

Granny Smith’s hybrid storage system, comprising 8MW on-site solar, 2MW battery power systems and a gas power plant, is fully operational with 10% of the energy supply sourced from renewables. We made good progress on Gruyere’s 12MW solar plant, with commissioning scheduled for the end of 2021. At St Ives, we commenced a scoping study to evaluate supply alternatives once the current power agreement lapses in 2024.

During 2020, about 8% of the region’s electricity requirements were met through renewables, with that percentage set to rise significantly over the next few years. Our investment in renewables was mostly responsible for the region’s 2020 carbon emissions savings of 75kt CO2e, which was well ahead of target.

South Africa

In February 2021, the National Energy Regulator of South Africa approved an electricity generation licence for a 40MW solar plant at South Deep. Once approved by the Board, construction of the plant is set to take a year. The solar plant will provide approximately 20% of South Deep’s electricity needs and could save the mine an estimated R120m a year.

GROUP ENERGY CONSUMPTION

GROUP ENERGY SPEND AND SAVINGS

GROUP SCOPE 1 – 3 CO2e EMISSIONS


Chile

We are developing a 26MW hybrid solar and thermal power solution for the Salares Norte project. We aim to have this functional once the operation starts production in early 2023. Diesel generators will provide 16MW and the solar unit 10MW of power, 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 reduced by 15% during 2020 to US$257m (2019: US$300m), mainly due to lower oil prices in response to decreased demand. Total energy spend, which combines the Group’s electricity and fuel spend, amounted to 16% of total operating costs in 2020, down from 20% in 2019. This represents 12% of AISC (2019: 17%) and translates to AISC of US$110/oz (US$136/ oz). Gold Fields made a net loss of US$12m on oil price hedges during 2020, as the price of oil on international markets decreased more than anticipated.

Total energy consumption increased by 5% to 13,129TJ compared with 12,498TJ in 2019. This is mainly due to increased on-site electricity generation in Australia, with Gruyere operating for a full year for the first time, higher gas consumption in Ghana and increased renewable energy generation in Australia. The energy mix is made up of 52% haulage diesel, 48% electricity and less than 1% of other fuels. Energy intensity remained largely unchanged at 5.64GJ/oz (2019: 5.67GJ/oz).

We achieved energy savings of 1,085TJ in 2020 (2019: 405TJ), resulting in long-term cost savings of US$25m, equivalent to US$11/ oz. Since the launch of our Energy and Carbon Management Strategy in 2017, Gold Fields has realised cumulative energy savings of 2,077TJ (4% of energy consumption during this period), resulting in a cost saving of US$144m.

Emissions performance

Our carbon emissions performance mirrors our operations’ energy use trends. Total Scope 1 – 3 CO2e emissions during 2020 amounted to 1.969Mt, an increase from 1.941Mt in 2019 – reflecting higher production at our Australian operations as a result of the inclusion of Gruyere for a full year. Emission intensity, which is measured using only Scope 1 and 2 emissions, remained static at 0.66t CO2e/oz for 2017 to 2019, and reduced to 0.62t CO2e/oz in 2020.

In 2016, we set ourselves an aspirational target of reducing cumulative carbon emission by 800kt CO2e between 2017 and 2020. We reached 80% of this target by the end of 2020, of which 230kt CO2e were achieved in 2020 as a result of the above mentioned energy savings initiatives.

TAILINGS MANAGEMENT

At end-2020, our 11 operations – including our three JV sites, being Asanko in Ghana, Gruyere in Australia and FSE in the Philippines – contained 37 TSFs, of which 12 were active and one under construction. Of the 12 active TSFs, we have two in-pit TSFs (Agnew and St Ives), six downstream/centre-line TSFs, and four upstream TSFs.

Our mines in Australia and South Africa are located in relatively dry regions, and limited amounts of supernatant water are stored in the facilities. This significantly improves their overall performance and integrity. In Ghana, the Tarkwa and Damang TSFs are designed in line with industry best practices. We have implemented critical controls and performance objectives to ensure that the TSF embankments remain stable throughout both the wet and dry seasons and over the life of the facilities. Our technical teams continue to work with Galiano Gold, which manages Asanko, to maintain the good operational performance of the lined and downstream-raised TSF.

The Lepanto TSF located in the Philippines is well managed, with no visible signs of instability and adequate freeboard. No safety incidents associated with the project have occurred to date. The TSF is located in a region prone to high seismic activity and frequent typhoons. As a result, Gold Fields and Lepanto Mining commissioned external consultants to develop a more reliable risk profile of the Lepanto TSF, along with potential risk control measures that could further improve the facility’s risk profile. We expect an independent summary from the consultant in Q1 2021.

Total tailings depositions increased by 20% in 2020 from 2019, totalling 59Mt. This increase is mostly due to our Gruyere mine producing for a full year for the first time.

Solar farm and wind turbines, Agnew, Australia

A detailed profile of Gold Fields’ TSFs can be found on our website at www.goldfields. com/environment-tsf.php