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 2017 energy and carbon performance were:

Energy markets have been fundamentally redefined by the global drive to minimise contribution and build resilience to climate change. This has affected the types of energy sourced by business, the cost of energy, how energy is procured and how energy is finally used.

The gold mining industry is affected directly by these drivers, given the energy intensity of its processes. Mining and processing of gold is getting more energy intensive given a number of factors including:

• Declining grades
• Longer hauling distances
• Increasing mine depths requiring more pumping and cooling infrastructure
• Increased stripping to expose new ore bodies
• More challenging ore body geologies

At the same time, energy prices continue to increase.

For Gold Fields, energy spend accounts for a significant portion of our operating costs (2017: 17%, 2016: 19%), equivalent to 12% of AISC (2016: 13%). This reinforces the need for increased energy supply security, investing in continuous efficiency improvements, reducing our carbon emissions and adapting to the adverse effects of climate change. Successfully implementing these initiatives contributes to a number of our strategic objectives of operational excellence and demonstrates our commitment to responsible mining principles.

In 2016, we revised our Integrated Energy and Carbon Management guideline to align with ISO50001, the global energy management standard. We started the alignment with the standard in 2017 by integrating energy and carbon management into operational and strategic aspects of the business. Energy awareness and training is provided for relevant staff and contractors, while our energy and carbon emissions data is collated and assured by independent auditors.

The guideline informs our integrated energy and carbon management strategy, which is aimed at strengthening energy security, managing energy consumption and costs, reducing carbon emissions and building operational climate resilience. We have set our 2020 aspirational goals from 2018 to be:

• Maintain energy security outside the top 10 Group risks
• Achieve 5% to 10% energy savings off our annual energy plans each year
• Achieve 17% carbon emission reductions each year up to 2020, equivalent to 800,000t CO₂-eq of cumulative carbon emission reductions over the period
• Ensure that all our operations are ISO50001 ready or certifiable

Group energy consumption

Overall energy performance

• Group energy spend declined by 11% to US$258m (US$115/oz) in 2017 from US$289m (US$130/oz) in 2016, with energy initiatives having delivered just below 9% cost savings, at US$22m (US$10/oz), against an initial target of 8% in the 2017 energy plan
• Total energy consumption increased by 4% to 12,178TJ in 2017 from 11,697TJ in 2016, with 67% comprising fuel usage (8,175TJ) and 33% electricity (4,003TJ), compared to a 63%/37% split in 2016
• Fuel spend accounted for 44% (45% in 2016) of total energy spend, with electricity accounting for 56% (55% in 2016). The impact of lower oil prices kept our fuel spend lower relative to our electricity spend. A table showing Group and regional energy costs and volume impacts can be found on our website at www.goldfields.com/sustainability/environment.php
• Energy initiatives realised 176GJ in savings during 2017, equivalent to 1% of energy consumed (against an initial target of 3% in the 2017 energy plan)
• An estimated 8% of carbon emissions, totalling almost 116,000 CO₂-eq, (against an initial target of 8%) were abated
• Our energy intensity increased to 5.46GJ/oz (2016: 5.27GJ/oz), driven by increased fuel usage
• Our Scope 1, 2 and 3 carbon emissions decreased marginally to 1.959 Mt CO₂-eq from 1.964 Mt CO₂-eq in 2016 (see here)

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 is committed to responsible water stewardship, both for the benefit of host communities and for our own operations. Clean water is a basic human right, and a vital resource for our processing activities. Our approach to managing our impact on and access to water is essential to maintaining our licence to operate. Through careful management, we are able to reduce our environmental impact through responsible use, storage and release of water, while also reducing our costs, thereby benefiting all stakeholders.

All regions have conducted a gap analysis against the new ICMM Water Position Statement and have developed action plans to close the gaps, with the aim of aligning by the end of 2018. Independent verification of mines' adherence to the statement will be carried out afterwards. We have updated the Group Water Management Guideline by incorporating the following ICMM Water Position Statement commitments:

• Apply strong and transparent corporate water governance
• Manage water at operations effectively
• Collaborate to achieve responsible and sustainable water use

Predictive and dynamic water balances are in place at all operations, except Damang (which is planning to implement it during 2018), enabling them to account for their water inputs to and outputs for the flows within the system.

Group performance

During 2017, Gold Fields spent a total of US$29m on water management and projects (2016: US$16m).

Water withdrawal¹ across the Group increased to 32.9Mℓ (2016: 30,3Mℓ) and water recycled² or reused³ amounted to 43.3Mℓ (2016: 44,3Mℓ). Water withdrawal per ounce was higher at 14.8kℓ/oz in 2017 compared with 13.7kℓ/oz in 2016. The main reasons for the increase in water withdrawal (Graph 1) were the high rainfalls experienced at our Australian operations, at Tarkwa in Ghana and at the Cerro Corona mine in Peru. This is included in the determination of water withdrawal and we are required to dewater these mines to enable them to continue operating. As Group gold production was largely unchanged this reflected in higher water withdrawals per ounce of gold produced.

Our operations are investing heavily in improving water management practices, including pollution prevention, recycling and conservation initiatives.

The decline in the amount of water recycled or reused during 2017 also related to higher rainfall. At Cerro Corona all new water is rain water, which is collected and stored in the tailings pond even if the site does not need it. It gets used first, therefore reducing the need to treat and reuse waste water. A similar trend occurs at our other mines during periods of high rainfall.

The ICMM has recommended a recycling/reuse target of 60% for mining operations. Our Peruvian and Ghanaian mines have exceeded this level already and during 2018 the Group will set targets in line with this recommendation. At Group level, 57%4 of our water was recycled or reused during 2017 (2016: 59%).

We benchmark our water usage by participating in the CDP water disclosure programme. 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. During 2017, Gold Fields maintained an A- score for its 2016 CDP water assessment, a notch below the top performers.

Group water withdrawal		Water withdawal per ounce of gold produced
Group water recycled/reused		Total water recycled/reused4

¹ Water withdrawn is the sum of all water drawn into Gold Fields' operations from all sources for any use/impact

² Recycled water - refers to the act of processing used water/waste water through the same or another cycle at the same facility. The water/waste water is treated before    being recycled and reused

³ Reused water refers to water/waste water that is re-used without treatment at the same facility or at another of Gold Fields' operations

⁴ Percentage of water recycled or reused = (water recycled/reused ÷ total water used in process^{5 )} x 100

⁵ Total water used in process = water withdrawal + water recycled/reused

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.

Sustainable and integrated mine closure remains one of Gold Fields' five key sustainability focus areas. Through the careful planning of mine closures, we are able to:

• Reduce our environmental impact
• Reduce social and community impact
• Optimise financial liabilities
• Enhance our assets' values

All our mining operations have closure plans in place that are reviewed every year and closure liabilities are updated annually. During 2017, Gold Fields completed the adoption of the Standardised Reclamation Cost Estimator (SRCE) model, which provides consistency in preparation of liability cost estimates across the Group, flexibility in meeting operational and regional needs and ease of use.

During the year an Integrated Mine Closure Steering Committee was established to oversee alignment of closure plans with the guideline. Focus areas for the committee include social transitioning, progressive rehabilitation and full life-of-mine closure obligations. Continued participation in the ICMM Mine Closure Working Group and Social Guidance for Closure Taskforce is supporting the Gold Fields focus on social transitioning at closure.

We are committed to moving towards integrated mine closure planning. This will ensure that we design, plan and operate our mines with closure in mind. Our 2020 objective is to implement integrated mine closure management that in the long term will reduce the Group's closure liabilities. This means planning for post-closure long-term sustainability in consultation with our communities and other stakeholders.

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

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

The total gross mine closure liability for Gold Fields remained unchanged at US$381m in 2017. A breakdown is provided in the table below.

Group closure estimates 2017 (US$m)

			% of Group 2017		Total (US$) 2017			Total (US$) 2016
Australia region1			47%		179			182
Ghana region			26%		98			105
Americas region			16%		62			57
South Africa region			11%		42			37
Group total (US$m)			100%		381			381

1

Due to legislative changes introduced in Western Australia that came into effect in July 2014, there is no longer a legal obligation to have unconditional performance bonds in place for mine closure liabilities. Such liabilities for continuing operations are now self-funding. In addition, companies are now required to pay a levy to the state based on the total mine closure liability. This levy is 1% of the total liability per mine, paid annually. This levy goes into a state administered fund known as the Mine Rehabilitation Fund. Capital and interest from the fund will be used to rehabilitate legacy sites or sites that have prematurely closed or been abandoned

As part of its vision of responsible stewardship of the environment, Gold Fields commits to responsible management of waste and tailings deposits. We typically generate the following waste streams:

• Tailings
• Waste rock
• Hazardous wastes, such as chemical and hydrocarbon waste
• Non-hazardous waste, such as general landfill waste
• Recyclable waste, i.e. waste that can be reused or recycled

The most significant waste materials produced by our operations are tailings, waste rock, chemical waste and hydrocarbon waste. The highest volume of waste generated is tailings, which is placed in engineered tailings storage facilities, as well as waste rock (such as overburden), which is deposited on designated waste rock facilities. Our hydrocarbon and chemical wastes are classified as hazardous wastes. These are subject to strict controls for their handling, storage, transportation and recycling or where required, disposal in accordance with statutory requirements. By carefully managing these waste materials, we minimise their potential environmental and social impacts.

We manage waste in accordance with a waste management hierarchy through which we aim to prevent or reduce waste generation. Where we do generate waste, we aim to reuse, recycle or treat waste prior to disposal. One of the ultimate goals of our Innovation and Technology strategy, termed “Gold Fields Mine of the Future”, is to seek to significantly reduce the mining waste generated by our business.

Waste Management Hierarchy

Gold Fields has a Tailings Storage Facility Guideline and is preparing to be in full compliance with the ICMM’s Position Statement on Tailings Governance by the end of 2018. Refer to https://www.icmm.com/tailings-ps.

Refer to our 2017 Integrated Annual Report for more information on our focus on tailings and waste rock management: https://www.goldfields.com/reports/annual-report-2017/integrated/environmental-stewardship.php

Hazardous Waste

Hazardous waste typically consists of materials such as hydrocarbons (oil, grease, emulsions, hydrocarbon-contaminated materials, oily water), chemicals (packaging/ expired or unused chemicals/ solvents/ other), batteries, medical waste, etc. All Gold Fields’ mines and projects have risk based procedures and processes in place. These are part of their Environmental Management Systems, which ensure that hazardous waste is collected, stored, transported and disposed of in a controlled manner that prevents environmental impact. Our hazardous waste is managed in accordance with statutory requirements and hazardous wastes are disposed of at designated, specially constructed, controlled and permitted hazardous landfill sites. Where remote mine operations do not have access to hazardous landfill sites, hazardous wastes are stored and / or disposed of in designated hazardous waste management landfill cells that are engineered to safely contain the waste, prevent environmental and potential social impacts, are rigorously managed and are permitted by the regulator.

Non-Hazardous Waste

Non-hazardous waste includes general landfill waste, non-contaminated metal waste, plastic waste, timber waste and paper or carton waste. 

Recycled Waste

Recycled ‘waste’ typically consists of any hazardous or non-hazardous material that can be recycled, such as paper, plastic, glass, metal etc. Hydrocarbon waste from our operations can also be recycled. For reporting purposes, we also consider non-contaminated timber that can be reused for firewood as recycled waste.

Brine

From a waste management perspective, we consider ‘brine’ to be the by-product or precipitate of a water treatment process, such as reverse osmosis. Brine is classified and managed as a hazardous waste (on or off-site).

To prevent ambiguity, the term ‘brine’ does not include an effluent emission that is saline, hypersaline or has a high total dissolved or suspended solid content and which may be discharged under controlled and permitted conditions. This type of effluent is not hazardous and reported under GRI Standard 306-1 “Water discharge by quality and destination”. Refer to our 2017 GRI Context Index for further details: https://www.goldfields.com/sustainability-reporting.php.

Waste Management Performance

With our enhanced focus on waste management we have improved our data collection and have improved our hazardous waste management reporting as presented in the following table:

Gold Fields Waste Management – Types of Waste Generated 2014 - 2017

Tonnes ‘1000	2017	2016	2015	2014
Tailings to dams	41 274	39 145	37 387	38 361
Waste rock to dump	170814	147891	129951	100161
	212088	187035	167337	138521
Recycled/Reused
Metal recycled - Weighed	13.3	14.3	11.4	11.1
Plastic Recycled - Weighed	0.10	0.18	0.09	0.06
Timber as firewood - Weighed	0.00	0.06	5.76	0.06
Paper and Carton recycled - Weighed	0.09	0.08	0.07	0.06
Hydrocarbons (oil, grease)	1.15
Other recycled - Weighed (e.g. batteries, fluros, chemicals)	1.37	1.73	1.90	1.52
Non-Hazardous Waste - on or off site disposal
General landfill - Weighed	11.01	11.56	11.16	13.34
Hazardous Waste - on or off site disposal
Brine Precipitate and Other	2.81	3.34	4.11	5.74

Source: Gold Fields 2017 GRI Content Index

Waste Management Targets

Gold Fields aims to continually improve its waste generation and waste management in accordance with the waste management hierarchy for all types of waste.

In 2016, Gold Fields set a target to maintain non-hazardous general landfill waste at 2015 levels (11,160 tonnes), by ensuring a reduction in the waste that reaches landfill through greater use of recycling and on-site waste separation. Though we were not able to meet this target in 2016, we achieved it in 2017. The same target has been set for 2018.

Our 2017 target for hazardous waste generation was to generate and dispose of less hazardous waste than we did in 2016. This target was achieved through a reduction of 530 tonnes of hazardous waste when compared with 2016. For 2018 we are setting ourselves a similar target, namely to reduce  hazardous waste generation to less than the 2,810 tonnes generated in 2018.

Our group-wide waste management has shown steady improvements over the last four years (2014 – 2017), as reflected in the graph below:

Gold Fields Non-Hazardous and Hazardous Waste Management Generated 2014-2017