Media releases

Update on recent fatalities at South Deep and outcome of Safety Review

Thursday, 29 May 2014
Download conference call transcript (PDF - 199 KB)

Johannesburg, 29 May 2014: Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) hereby advises that, further to the announcement issued on Tuesday, 27 May 2014, regarding the two recent fatal accidents at South Deep in South Africa, the Department of Mineral Resources (DMR) on Tuesday evening completed an in-loco inspection of the scene of the second accident on the mine.

Following the inspection the DMR issued a Section 54 order, placing a moratorium on all workshop-related activities across the mine, pending the completion of a report back to the DMR in terms of Section 11(5) of the Mines Health and Safety Act. This has effectively stopped all production on the mine.

Management is working closely with the DMR to identify and mitigate the causes of the accidents and to ultimately have the Section 54 order lifted.

It is estimated that, as a consequence of the Section 54 imposed on the mine due to the two fatal accidents, there will be a deferral of approximately 300 kilograms (9,645 ounces) of gold production by the end of this week. It is estimated that a further 200 kilograms (6,430 ounces) will be deferred due to the reassessing of working practices in all workshops and safety control systems on the mechanised mining fleet, in order to improve safety at South Deep.

The new management team, appointed at the beginning of this year, has concluded a comprehensive review of all safety protocols, procedures and standards across the mine. This is in line with the team’s mandate to improve the mechanised mining culture on the mine, with specific emphasis on introducing international best practice standards on equipment availability and utilisation as well as the mechanised mining skills of employees.

The safety review has indicated that approximately 1,000 meters of legacy ground support in some of the ramps serving production areas in the older part of the mine, are below the international best practice standards at our international mines and present a safety risk. At this stage of the build-up process, approximately 70% of the mine’s production comes from these older areas of the mine above 95-level. 

Nick Holland, CEO of Gold Fields, said: “After personally inspecting the affected areas, and after consultations with the new mine management team as well as the Gold Fields Board, I have concluded that it would be unsafe to continue working in these areas without remediation. As a consequence it has been decided to immediately stop production and destress activities in these areas and to start with remedial work.”

“A safe working environment on all of our mines is our first priority and, in line with our first value – ‘If we cannot mine safely we will not mine’ - this was the right decision to make. We are now paying the price for the skills deficit at South Deep, which contributed to this outcome. In addressing these issues we will not only ensure the safety of our people, but also the long-term integrity and sustainability of the mine,” he added.

The remediation will take approximately four months to complete (June to September). The impact on production for this year is expected to be a deferral of approximately 1,500 kilograms (48,225 ounces).

Despite the production declines at South Deep, the Group’s production guidance of 2.2 million attributable ounces for 2014 is maintained, based on the current and anticipated outperformance of Cerro Corona, Granny Smith and Tarkwa relative to guidance.

At this stage it is not expected that the stoppages will require a re-assessment of South Deep’s build-up plan to full production of between 650,000 ounces and 700,000 ounces per year by the end of 2017, as previously advised.

“However, we cannot at this point in time guarantee that there will not be other issues identified by the new management team, which may further impact guidance for the year,” said Holland.

He added: “Central to the new management team’s efforts to rebase the mine, is the need for the introduction and enforcement of greater levels of accountability and responsibility at all levels in the organisation and to improve skills levels across the board. In addition, the team has concluded that the mine has more equipment and people than is required. Both of these are prerequisites for an improved safety culture and improved productivity, which are deemed critical to de-risk the mine’s build-up to full production and ensure that South Deep achieves its full potential. Discussions have commenced with the trade unions to agree on the way forward on these issues.”

A telephone conference call has been scheduled at the times indicated below:

Johannesburg: 16:00 hours
For United Kingdom: 15:00 hours (GMT)
For North America: 10:00 hours, (EST)

Country Toll Number Toll-free Number  
Australia   1 800 350 100  
South Africa 011 535 3600 0 800 200 648  
United Kingdom   0 808 162 4061  
USA & Canada   1 855 481 5362  

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