Gold Fields

Environmental stewardship

Introduction

As a mining business, our operations have a material impact on the surrounding environment. To manage this, we remain committed to responsible environmental stewardship. Internally, Gold Fields has recently revised a number of policy statements and four Group-level guidelines, which reflect our environmental priorities. These concern energy and carbon management, water management, tailings management and mine closure.

Our approach to environmental stewardship is guided and informed by several external standards as well as local legislation, supported by risk management, internal policies and priorities. Additional local priorities are identified through stakeholder consultation.

All of Gold Fields' eligible operations are certified to the International Cyanide Management Code (ICMC). The certification, which prescribes how to manage, treat, transport and store cyanide, is renewable every three years. Gold Fields remains committed to Code compliance and our operations work to ensure recertification by identifying and addressing potential gaps in advance. Granny Smith and St Ives were successfully recertified during 2017. The next recertification audits due in the Group are at South Deep, Tarkwa and Damang in 2018. Gold Fields does not use mercury for the beneficiation of gold or in any of its processes.

While all Gold Fields' operations are currently certified under ISO 14001, we are in the process of recertifying our operations in terms of the new ISO 14001 (2015) standard. A significant highlight for the Group is that St Ives, Granny Smith, Cerro Corona and South Deep secured the new certification in 2017. Agnew, Tarkwa and Damang are scheduled for recertification in 2018. The adoption of the critical control management approach promoted by the ICMM here, will also assist with the identification and mitigation of adverse environmental impacts.

Environmental incidents

Gold Fields reports environmental incidents using a Level 1 (most minor) to 5 (most severe) scale. During the year, our environmental incident reporting process was updated to include clear deadlines for reporting incidents to our CEO and Board to ensure oversight at the highest levels.

We have not recorded any Level 4 or 5 environmental incidents in the past ten years, thereby achieving our target of zero Level 4 and 5 incidents. During 2017, we did, however, experience 83 Level 2 environmental incidents (2016: 131) and two Level 3 environmental incidents (2016: three), which took place at our St Ives and Tarkwa operations.

• In Q2, a contractor at the St Ives mine released diluted, hypersaline ground water onto undisturbed land during drilling activities. Sumps had not been prepared to contain any run-off water. The area was immediately rehabilitated and the regulator notified. The environmental impact was low as the water released was a small quantity and had low salinity levels
• In Q4, seepage from a tailings embankment wall at Tarkwa flowed into an adjacent control wetland on the mine's property. Levels of cyanide in the seepage resulted in fish in the wetland dying. Cyanide levels in the wetland quickly fell below prescribed regulatory limits and the seep from the embankment wall was contained. The contaminated water did not go beyond Tarkwa's boundary or into any water courses. The regulator was notified

Supporting biodiversity

Our Biodiversity Conservation Practice Guide ensures that we integrate 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 Peru and have strict controls to protect local water bodies. Because of this, our operations enjoy high levels of biodiversity compared to their surrounds.

At our Salares Norte project in the Atacama desert of northern Chile, we have invested US$2.2m in our environmental programmes, which includes a project to protect the endangered Short-tailed Chinchilla, which is found in the area. During 2017, with the help of environmental experts, we captured a number of Chinchilla and relocated them. Some of them were equipped with GPS collars to allow for further studies.

At our Cerro Corona mine in Peru we have a biodiversity management programme, as part of which we evaluate terrestrial and aquatic biodiversity twice a year (during the dry and wet season) and, where necessary, ask biologists to relocate sensitive flora and fauna species from the operating area.

As part of our Beyond 2018 project at the St Ives mine, we delayed submission of final documentation to the Environmental Protection Authority (EPA) to further study the fauna on the Lake Lefroy salt lake, on which much of the future mining activity will take place. The documentation was submitted in February 2018.

Climate change management

Climate change affects the availability of natural resources, with water and energy most affected. Our operations and our host communities are and could be further impacted, due to:

• Extreme weather events such as severe rainfalls, heavy snowfalls, severe winds, extreme temperatures and prolonged droughts
• An increasing number of climate-related regulations, carbon emissions taxes, stringent water regulations, the impact of new technologies and investor perception

During 2017, the Board adopted an updated Group Climate Change Policy, which advances and communicates a balanced mitigation and adaptation approach to achieving our climate change objectives. The policy contains a set of commitments that include:

• Conducting climate change vulnerability assessments utilising Group risk guidelines and International Council on Mining and Metals (ICMM) tools and guidelines
• Annual reporting and disclosure via a number of reporting frameworks including the Carbon Disclosure Project (CDP) and the Dow Jones Sustainability Index
• Mitigating the effects of climate change by increasingly investing in renewable energy and low-carbon energy sources, energy efficiency initiatives and water use optimisation initiatives
• Supporting research, development and innovation to assist our operations to cope with climate change
• Factoring in a regional carbon price for both costing and as a potential revenue stream
• Participating in industry forums, including the ICMM climate change and energy working group, stakeholder and NGO engagements

In 2017, the Taskforce on Climate Financial Disclosures (TCFD), formed by the global Financial Stability Board, published its climate change-linked disclosure recommendations for corporations. Given our long running energy, water security, carbon emissions management and climate change programmes and performance disclosures, we are able to align these with the TCFD recommendations as follows:

Governance

The Board approved the Climate Change policy statement in 2017 and the Safety Health and Sustainable Development Committee of the Board reviews performance of energy and climate change programmes every quarter.

Strategy

Our climate resilience strategy focuses on understanding climate-related risks that affect our operations and neighbouring communities and building safeguards to strengthen climate resilience against these risks. We also assess climate-related opportunities, such as: the use of financial incentives, investing in improving security and efficiency for water and energy, remaining committed to using 20% renewable energy in all new operations and switching from high to low-carbon energy sources.

Risk management and mitigation

Company-wide risk assessments are conducted and reviewed twice a year by the Audit and Risk Committee of the Board. In 2017, our Group risk register included the impact of global climate change and water pollution, supply and cost among the top 20 Group risks.

Gold Fields' approach

We assess climate change-related risks, develop mitigation and adaptation plans, implement the plans and review our vulnerability every five years. Apart from operation-specific interventions see here we have also developed Group-wide strategies and programmes. In 2016 and 2017, Gold Fields' Ghana mines piloted use of an ICMM climate-data viewer tool, which gives insight into physical changes in precipitation, temperature, wind and water stress levels. The tool provides climate projections covering a 20-year period from 2025 to 2045, from a 1986 to 2005 baseline1. The outcomes were used in developing adaptation plans, such as reviewing design flood lines, inclusion of climate change risks in our tailings and waste facilities management guidelines and inclusion of climate change impacts in our project standards see here.

Regulatory risks and opportunities

Climate change-related regulations have increased across our regions.

In Ghana, the Renewable Energy Act of 2011 requires 10% renewable energy requirement across the grid by 2020, with mines expected to take the lead. Our mines have started exploring ways to achieve this target.

In South Africa, the second carbon tax bill with taxes levied on companies' Scope 1 CO₂ emissions, is set for implementation in early 2019. South Deep's exposure to the tax is minimal as its Scope 1 emissions, largely related to diesel usage, were only 8,000 tonnes CO₂-eq. At an estimated tax rate of R60/t this would amount to around R500,000 (US$37,000), after discounts. However, should Eskom decide to pass on the cost of the tax on its Scope 1 emissions to customers, the costs could rise significantly. New national greenhouse gas emissions regulations were also promulgated in 2017. We are currently studying their potential impact.

In Australia, we already report under the National Greenhouse and Energy Reporting scheme. In 2016 a safeguard mechanism was introduced, with penalties for exceeding emissions baselines; in the year to 30 June 2017 our St Ives mine has exceeded the baseline by 1,590 tonnes CO₂-eq as increased mining volumes drove up our diesel-linked emissions. This was 1.6% above the baseline and required the mine to trade carbon credits to that amount. We have successfully converted our abated carbon emissions at our Granny Smith mine in Australia into A$127,000 in carbon credits and auctioned these off to the Australian government, with the excess used to offset the safeguard mechanisms exceedances at St Ives.

Chile's carbon tax scheme, at US$5/t CO₂-eq, became effective in 2017, targeting large grid connected generation facilities. Our Salares Norte project in the Atacama Desert is a remote operation, with no grid access and will not be affected.

Weather-related physical risks

Severe weather events have impacted and have the potential to further impact our operations. Heavy rains in Australia and Ghana have resulted in production stoppages and damage to properties. In 2017, Peru experienced heavy rainfalls which affected the road from the Cerro Corona mine to the port of Salaverry, from where we ship our ore concentrate. As a result there were some delays in shipping the concentrate. Last year also saw heavy snowfalls at the Salares Norte project in Chile, which impacted our exploration activities. South Africa has been experiencing drought conditions in some areas.

Metrics and target

Gold Fields has been disclosing emissions, risks and opportunities for more than 10 years through the CDP, which has consistently ranked us as one of South Africa's top performers. Our key energy and carbon emissions data are assured externally.

In 2018 we will complete the process of revising our short and medium-term climate change and emissions targets, aligned with our corporate strategy and the regulatory requirements in our jurisdictions.

Gold Fields disclosures cover all three carbon emission scopes (Scope 1 - 3), both in absolute figures and intensities. Total Scope 1 - 3 CO₂-eq emissions during 2017 amounted to 1.96Mt (2016: 1.96Mt). From 2017 to 2020, our aspirational target is to reduce cumulative carbon emissions by 800kt CO₂-eq.

Given the water security impact of climate change to our operations, we also closely monitor our water usage and spending and invest in water security and efficiency initiatives. More details can be found on Environmental stewardship.

1	Determined using the RCP 8.5 baseline scenario (representative concentration pathway). Gold Fields has noted the nationally determined commitments from Australia, Peru, Chile and South Africa. We further expect the two-degree scenario to put pressure on energy costs in the medium term.

Rehabilitation of waste dumps at Damang

Regional climate change risks and mitigation plans

		High/medium risks		Plan
Australia		Adequacy of flood management measures		Review flood management capabilities and adjust management plans, if necessary
		Declining availability of water		Develop LoM water balances that are dynamic, probabilistic and predictive
		Increased cooling costs		Implement energy and cost management plans
		Legislative changes including aggressive taxation regimes and abatement requirements		Participate in carbon abatement projects Continue to engage governments
Americas		Water shortages during drier months		Obtain permits to abstract water from the Tingo river in wet seasons Seek approval for water abstraction in regular EIA updates
		Ability to deliver concentrate for shipping during severe weather events		Ensure that an alternate route to the port is ready for use Increase storage capacity at the port and at the mine
West Africa
		Increased operational costs linked to maintenance of roads, more frequent replacement of tyres and increased dewatering		Provision made for rain delays in 2018 operational plan Pit floors to be staggered where possible to aid drainage Catchment mapping to be reviewed against a one in 100-year rainfall event
		Increased volumes of contaminated water requiring treatment		Review water treatment option updates for contaminated water Direct surface water flow away from operations to reduce contaminated volumes Adaptive water balance models
		Heat stresses on mine employees		Heat stress management programme, including training, to be rolled out in 2018 Accelerate heavy machinery automation opportunities across the fleet
		Favourable conditions for vector borne diseases during high rainfall periods		Review mosquito spraying programme and adjust, if necessary Investigate potential collaboration with neighbouring mines on community spraying
South Africa		Variability in rainfall intensity increasing costs of alternate water sources		Adaptation programme completed in 2018 Dynamic, probabilistic and predictive water balances in place Reduce freshwater withdrawals Reduce potential Scope 1 emission through improved diesel efficiencies
		Temperature increases affect surface cooling plant efficiency and causes heat stress for surface employee
		Climate change-related regulatory uncertainty

Water management

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

Regional performance

		Key risks		Strategic responses
Americas		Poorly developed public water infrastructure Ongoing or perceived water quality pollution by neighbouring mines Water-related activism at both a local and regional level		Cerro Corona has a water management strategy that includes: Permits for water use and effluent discharge Water balance to control the volume of run-off water stored in the TSF Rainwater storage and recycling Community water supplies Water monitoring Proactive engagements with community organisations and local governments Develop post-closure water management plans

2017 key developments

In Peru we invest in water supply projects in our host communities

		Key risks		Strategic responses
Australia		The aridity of Western Australia is a risk to water security of our mines and the Gruyere project		All our mines in Australia have water management strategies that include appropriate water balances, linked to operating strategies, and post-closure water management plans that have been incorporated into our environmental management systems with protocols governing: Water monitoring and reporting Storm water management Recycling of water Groundwater management Surface water management Water storage inclusive of freeboard requirements Associated legislative requirements Water management at the sites forms an integral consideration within our mine closure plans that are reviewed on a three-year cycle and submitted to the regulator for approval. A stakeholder engagement strategy has been implemented for the region which includes water management activities.

2017 key developments

		Key risks		Strategic responses
West Africa		Intense periods of precipitation during south-western Ghana’s two rainy seasons requires active management of positive water balances at the mines Water pollution affecting adjacent communities Tarkwa mine’s significant footprint is a large watershed to manage The impact of illegal mining on water bodies is often blamed on large-scale mining Permitting delays		The West Africa operations have well-developed water management strategies that include: Water storage and reuse Water volume and quality monitoring Controlled water releases to external receptors New water balance software introduced in 2017 New water treatment facilities being designed and trialled Engagement with regulators and communities 2017

2017 key developments

		Key risks		Strategic responses
South Africa		Growing concerns around water scarcity in South Africa Increasing levels of acid drainage (AD) in groundwater plume from tailings dam		To ensure its water security, South Deep uses a number of water sources, including recycling and conservation initiatives, RO plants, boreholes and access to the public water system. In times of severe droughts, as in 2016, it also accesses water supplied from neighbouring mines. To mitigate against water pollution, including AD, South Deep undertakes ongoing water monitoring, containment in storage facilities, water treatment and purification. It has also constructed plume interception wells at its TSF.

2017 key developments

Waste and tailings

The most significant waste materials produced by our operations are tailings, waste rock, chemical waste and hydrocarbon waste. By carefully managing these wastes, we minimise the environmental and potential social impact.

All of our operations have tailings management plans in place, including closure and post-closure management plans. In total, our operations have 27 tailings storage facilities (TSFs), of which 16 are active.

All TSFs, as well as associated pipeline and pumping infrastructure, are subject to a Group audit every three years - or more frequently where required by local circumstances or regulations - as well as regular inspection and formal annual reporting.

In December 2016, the ICMM published its Tailings Position Statement following high-profile tailings failures in preceding years. Our Group guidelines were updated in 2017 to be fully compliant with the ICMM's framework. Group-wide tailings audits were completed by independent, external experts during 2017 to ensure Gold Fields meets the ICMM's new framework as well as having critical controls in place to manage potential risks. There were no significant findings. All gaps identified will be closed out by the end of 2018, in accordance with our commitments as an ICMM member.

Group mining waste
(Million tonnes)

Total Group waste rock volumes mined increased to 171Mt in 2017 from 148Mt in 2016, largely as a result of the 40Mt of waste rock moved as part of the Damang Pit Cutback Project in 2017. There was a 5% increase in tailings depositions from to 41Mt in 2017 from 39Mt in 2016.

Gold Fields has set a target to maintain the general landfill waste mass (non-hazardous waste other than tailings and waste rock) at 2015 levels of 11.2Mt, by ensuring a reduction in the waste that reaches landfill through greater use of on-site waste separation and recycling. During 2017 the Group reduced landfill waste by 5% to 11Mt.

Regional performance

Americas region

During 2017, the Cerro Corona TSF was raised 4m to 3,780m above sea level. The construction of the dam is approved by the regulator up to level 3800m; this level will be reached by 2021 in line with the mine plan. To achieve the 2017 raise the mine reached agreement previously with the Manuel Vazquez Association (MVA), a community organisation, to relocate the point of catchment of water of the nearby Las Tomas spring from 3,771m to 3,800m above sea level with better water quality and slightly more flow. The engagement with the MVA continues as we raise the TSF to that level.

Australia region

At Agnew the rehabilitation of the Lawlers TSF and the former Lawlers camp was completed during 2017, under budget and ahead of schedule, resulting in a reduction of the mine closure liability.

Also at Agnew, final approvals for the Songvang in-pit TSF were received from the regulator and the facility commissioned in December 2017. This will save the mine around A$10m (US$8m) in TSF construction and closure liabilities over the mine life.

West Africa region

The Tarkwa mine has raised the embankment walls at its TSF 1 and TSF 3 and deposition of material has begun.

During 2017, construction of TSF 5 at Tarkwa continued after approval was received from the Ghana Minerals Commission. As per an Environmental Protection Agency (EPA) request, the mine will be submitting a compensation plan for residents of the nearby Abekoase community.

At Damang, the Far East Tailings Storage Facility (FETSF) was commissioned in Q1 2018, on time and within budget. The FETSF will provide tailings capacity of 44Mt, which will cover the mine's new life. The transition of tailings deposition to FETSF and the decommissioning of the East Tailings Storage Facility commenced during Q1 2018.

Mine closure management

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

Conveyor belts feeding the crushing and metallurgical plant at Tarkwa