INTEGRATED ENERGY AND CARBON MANAGEMENT STRATEGY

Through its Integrated Energy and Carbon Management Strategy, Gold Fields integrates energy and carbon management into all aspects of its business to ensure energy security, improved management of energy costs, improved energy efficiencies and sustainable reduction of its carbon footprint. Full details of our Group and operational energy consumption and carbon emissions data is contained on our website at www.goldfields.com>sustainability Some of the salient features of the Group’s 2016 energy and carbon performance were:

• Group energy spend declined from US$312m (US$139/oz) in 2015 to US$289m (US$130/oz) in 2016
• Total energy consumption increased by 4% to 11,696,446GJ from 11,240,369GJ in 2015. Of total energy consumption during 2016, 57% comprised diesel (6,607,770GJ) and 43% electricity (5,041,518GJ) similar to the split in 2015
• Group electricity consumption was 1,400,422MWh, a 6% increase on 2015. This reflected higher gold production (up by 47%) at South Deep, increased tonnes mined throughout the Group, the addition of ventilation shafts at our Australian operations and increased dewatering due to heavy rains at the Australian and Ghanaian mines
• Diesel consumption reduced by 4.7% from 192,518kℓ in 2015 to 183,498kℓ due to the commissioning of the gas plant at Granny Smith, reduced usage of diesel power generators at Damang, optimised mining operations and fuel management initiatives implemented at our mines. Diesel consumption increased at the Tarkwa and St Ives mines
• Diesel spending reduced by 13% to US$129m (2015: US$149m) amid a stagnant oil price and reduced diesel usage at the operations; with a 1.2% modest decline in our electricity spend to US$160m (2015: US$162m)
• Commissioning of gas-powered power generation technologies at Granny Smith, Tarkwa and Damang as part of our ongoing switch to low-carbon, alternate and renewable energy sources
• Continued commitment to using 20% renewable energy on all new projects over the LoM of these projects. Salares Norte in Chile is currently undergoing an evaluation
• Total carbon emissions increased by 12% to 1,963,758t CO₂-eq from 1,753,163t CO₂-eq emissions in 2015. Our scope 1 emissions rose due to higher diesel consumption, while our scope 2 increased due to country-specific emissions factors

In 2016, low global oil prices and a stagnant gold price made some of our fuel-switching energy initiatives not economically viable. Despite the difficult economic and tough physical conditions of gold mining, Gold Fields still managed to achieve some energy savings and carbon emissions reductions in 2016.

These include

• Energy savings of 323TJ – 3% of our 2016 energy budget
• Financial savings of US$11m from energy initiatives – our target was US$21m
• Avoidance of carbon emissions totalling 56,005t CO₂-eq as a result of the energy and carbon reduction initiatives

Group energy budgets, energy savings and carbon reduction target estimates are determined at the beginning of each year, against the annual production plan. Thus, changes in the production will directly affect ability to reach the target estimates.

Most critically though is that our average energy spend per ounce of gold produced declined by 6.3% to US$130/oz in 2016 (2015: US$139/oz, 2014: US$158/oz). Energy efficiency initiatives reduced energy spend by an equivalent US$5/oz. This is despite the fact that the actual energy usage per ounce of gold produced increased by 5.0% to 5.27GJ/oz in 2016. Reflecting slightly lower grades throughout our operations, the tonnage mined by Gold Fields during 2016 was up by 12%, however, mining energy intensity improved to 0.06GJ/t mined (2015: 0.07GJ/t).

Energy optimisation savings initiatives take time to make an impact – we calculate that the effect of various energy efficiency and business optimisation initiatives introduced across Gold Fields over the past five years have resulted in cumulative energy savings of 1,098TJ between 2012 and 2016. This has led to US$41m in cumulative cost savings and avoidance of 165,005t CO₂-eq in emissions.

In 2016, Gold Fields updated its Group Energy and Carbon Management Guideline to align with ISO 50001, the global energy management standard. The guideline entrenches a systematic approach to our energy management as a business optimisation continual improvement programme and shifts our focus from individual energy efficiency initiatives.

Gold Fields remains committed to responsible water stewardship – both for the benefit of host communities and for our own operations. This means delivering enhanced operational security through innovative technologies with optimal water conservation and demand management practices.

This involves

• Measuring and reporting on water management performance
• Integrating water management into mine planning
• Complying with regulatory requirements and, where feasible, going beyond compliance requirements
• Leaving an enduring, positive legacy that extends beyond mine closure

Each operation implements an Environmental Management System (EMS), through which it assesses, manages, monitors and reports on water use and the quality of any discharges. During 2016, Gold Fields spent a total of US$16m on water management and projects. Water withdrawal across the Group decreased to 30,321Mℓ (2015: 35,247Mℓ), and, amid stable Group gold production, water withdrawal per ounce produced was down from 15.77kℓ in 2015 to 13.67kℓ in 2016. Total water recycled or reused remained steady at 44,274Mℓ (2015: 43,120Mℓ).

The main reasons for the change in water withdrawal were:

• A change in the internal definition of water withdrawal to align with the Mineral Council of Australia’s water accounting framework
• Significantly reduced water withdrawal at Cerra Corona, largely due to drought conditions
• During 2015 St Ives had high water withdrawals from opening up three new pits. This was not repeated in 2016
• Increased water withdrawal at South Deep due to the refiling of South Deep’s water storage dams and increased production demand

We also benchmark our water usage by participating in the CDP water disclosure programme. During 2016, Gold Fields achieved an A- for its 2015 CDP water assessment, which is an improvement from the previous year’s score of B. The CDP’s water score is an indicator of a company’s commitment to transparency around its water risks, and the sufficiency of its response to them.

As a member of the International Council on Mining and Metals (ICMM), Gold Fields subscribes to the ICMM’s new commitments on water stewardship, which were released in January 2017. The ICMM’s position statement is binding on all members within two years and requires them to apply strong and transparent water governance; manage water at operations effectively; and collaborate to achieve responsible and sustainable water use.

Our Biodiversity Conservation Practice Guide provides guidance on the integration of biodiversity conservation into all aspects of mine life, from pre-feasibility to closure. We subscribe to the ICMM Position Statement on Mining and Protected Areas, which includes a commitment to respect protected areas and an undertaking not to explore or mine on World Heritage properties. For example, we implement a total ban on hunting on our land holdings at our mines in Ghana and have strict controls to protect local water bodies. Because of this, our operations enjoy high levels of biodiversity compared to their surrounds.

Sustainable and integrated mine closure remains one of Gold Fields’ five key sustainability focus areas. In 2016, we continued to increase our efforts aimed at improving mine closure planning, management and financial provisioning processes. This was necessitated by changing legal requirements in South Africa and Australia, updated business plans as well as growing societal expectations.

Gold Fields’ 2013 Group Mine Closure Guideline was reviewed in 2016, with the aim of commencing the roll out of the revised guideline from 2017. This review was largely necessitated by the need to move towards more integrated mine closure planning and processes. Key changes to the guideline include:

• Care and maintenance planning
• Broadening closure planning aspects to include long-term business planning and community socio-economic requirements, in addition to the environmental aspects
• Aligning closure risks with Group risk processes and mitigation plans

Our 2020 objective is to implement fully integrated mine closure management that in the long term will reduce the Group’s closure liabilities

Mine closure liabilities

The total gross mine closure liability for Gold Fields has increased by 8% from US$353m in 2015 to US$381m in 2016. This can be mostly attributed to:

• A significant increase in the net area disturbed at the Damang mine in Ghana in line with the reinvestment plan
• An increase of over a third for the waste storage and TSF areas at Cerro Corona in Peru to support assessment of expansion opportunities
• A change in how the TSF plume pumping costs are calculated and uploaded survey data compiled at the South Deep mine

The funding methods used in each region to make provision for the mine closure cost estimates are:

• Australia – existing cash resources¹
• Ghana – reclamation bonds underwritten by banks along with restricted cash
• Peru – bank guarantees
• South Africa – contributions into environmental trust funds and guarantees

We conduct environmental and social impact assessments (ESIAs) for all new projects or when changes are made to our operational footprint that may require an amendment to the existing ESIA.

As a minimum these are aligned with prevailing legislation in the country in which the project or operation is located. However our overriding ethos is to go beyond compliance. For each new project we engage with community members to understand their concerns and needs, many of which are related to environmental impact. Our community engagement practices are guided by our community engagement handbook and our group community and stakeholder engagment guideline, based on best international practices.