Far Southeast project - Social licence to operate

For Gold Fields to obtain a further 20% interest in the project, a Financial or Technical Assistance Agreement (FTAA) will be required from the Philippines Government. This is dependent on obtaining the free, prior and informed consent (FPIC) of the local Kankana-ey indigenous people. In mid-2013, the Kankana-ey indigenous people voted in favour of the project and a Memorandum of Agreement was signed with the Council of Elders in February 2015. The Agreement, together with supporting documentation, is currently being considered by the National Commission on Indigenous Peoples (NCIP) before issuance of a formal certification precondition, which will complete the FPIC process.

In June 2014, LCMC and FSGRI jointly applied for the renewal of Mineral Production Sharing Agreement 001 (MPSA 001), which is the mineral tenement jointly held by the two companies in which most of the FSE deposit occurs. The initial 25-year term of MPSA 001 was due to expire in March 2015. In February 2015, LCMC and FSGRI commenced arbitration proceedings against the Philippines Government regarding whether FPIC is also required for the renewal of the MPSA. In November 2015, the arbitration panel issued an award that FPIC may not be imposed as a requirement for the renewal of MPSA 001 and that the MPSA should be renewed under the same terms and conditions. In December 2015, the Republic of the Philippines filed a petition to vacate the arbitral award with the court. The court rendered a decision in May 2016 to vacate the arbitral award. After the court denied a motion for reconsideration, LCMC and FSGRI subsequently filed a petition for review with the Court of Appeals in July 2016.

Environmental baseline monitoring continued throughout the year as part of FSGRI's Environmental and Social Impact Assessment.

Following a review of the country's 40 metallic mines by the Environment and Natural Resources department in 2016, operations at 10 of the mines have been suspended due to environmental violations. These actions increase the overall risk for any mining operation in the region.