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South Deep Project

Thursday, 2 August 2012

Johannesburg, 2 August 2012: Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) announces that its South Deep Joint Venture ("South Deep") has entered a formal consultation process with the National Union of Mineworkers ("NUM") and other affected employees who are not members of a recognised trade union ("affected unaffiliated employees") at South Deep via a Section 189 (3) notice.

South Deep management has been engaged in negotiations with trade unions for several months to reach agreement on a proposed new operating model, which, if implemented, would improve productivity and performance at South Deep in line with international best practice to the benefit of all stakeholders.

During these negotiations South Deep made several offers to the trade unions which included attractive remuneration and benefit packages linked to the adoption of the new operating model. The productivity measures that South Deep is striving for will not only secure current jobs but allow the mine to create an additional 400 full-time positions at South Deep in the immediate short term.

This proposed new operating model defines strategic choices on labour productivity, equipment and maintenance, mine design and infrastructure. To implement this model, there are six changes which benefit employees:

  • Changing the shift arrangements to allow for 3.5 hours more face time a day to achieve improved production results and provide employees with 43 more days off per year
  • Introducing a new Total Rewards System, which appropriately incentivises employees who meet and exceed their targets safely 
  • Adjusting the grading system to bring it into line with the rest of the mining industry
  • Achieving greater mining flexibility through selective outsourcing arrangements
  • Providing for improved maintenance through working arrangements with Original Equipment Manufacturers (OEMs)
  • Aligning policies and procedures to Gold Fields and industry best practice
 Peter Turner, Executive VP for the Gold Fields South African Region, said: "Unfortunately, no agreement could be reached with the NUM on the implementation of these changes. We believe this operating model is in the best interests of the vast majority of employees. South Deep is in a growth phase and with these changes we can create an additional 1500 jobs when the mine is in full production."

Agreement was reached with UASA, whose members will not be affected by this process. About 330 employees have accepted the final offer by South Deep and approximately 2,384 underground workers are affected by the Section 189 notice.

South Deep is an important and strategic growth asset for Gold Fields and the South African mining industry, with gold reserves to run beyond 2070. Gold Fields is committed to a process that ensures that South Deep is managed optimally and adheres to the principles of good governance and sound labour practice to create best-in-class operating conditions.

Turner concluded: "Our proposals not only create new jobs but secure existing ones at South Deep We have developed an operating model that will be beneficial to the mine and we require employees to work within this framework. We remain hopeful that during the 60 day consultation process we will be able to agree on a way forward that will be in the best interests of all stakeholders."








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