Risks and materiality

Top 20 Group risks and opportunities in 2018

How Gold Fields manages risk

The approach to assessing risk in Gold Fields is a collective effort by Group, regional and mine management of the risks facing the business. The assessments of the risks and their mitigating actions are a critical internal management tool, which reduce the identified risks significantly. Risk mitigations are included in the annual Group Performance Scorecard and cascaded down to the performance scorecard of management employees at regional and operational levels. The formal risk review process starts during management's annual strategic planning sessions where strategic risks and macro-trends are analysed in developing the Company's risk register and mitigating actions. These are updated quarterly, and presented to the Board's Risk Committee twice a year for verification.

Risk tables and heat maps have been published in the IAR on this basis for the last nine years.

						OUR MATERIAL ISSUES   Gold Fields Group materiality score for GRI standards (where 1 = critical to Gold Fields and 10 = not material at all)   Direct and indirect economic impacts 1.85   Health and safety 2.62   Public policy / corporate governance 2.75   Environmental compliance 3.09   Employment 3.23   Water management 3.36   Energy / emissions 3.66   Indigenous people 3.85         For how we determine our risks and materiality, see www.goldfields.com/risk-management-and-materiality.php

Top five risks and opportunities per region in 2018

		Americas region				Australia region
		RISK AND MITIGATING ACTIONS				RISKS/OPPORTUNITY AND MITIGATING ACTIONS
1		Life-of-mine extension at Cerro Corona		1		Reserve life
		Accelerate mining and stockpiling to facilitate early in-pit tailings Pre-feasibility study for 2030 life-of-mine extension finalised, and feasibility study to be completed in 2019				Commissioning of the Gruyere project planned for mid-2019 Significant near-mine exploration to delineate further reserves Accelerating exploration intervention at Agnew Acquisition of JV ground near St Ives and assessing toll-treatment options
2		Salares Norte project, Chile – Potential delay in Environmental Impact Assessment (EIA) approval		2		Gruyere project delivery
		Close interaction with the authorities and building sound relations in terms of baseline studies Assurance of project information, engineering design, scope and timetable Proactive and timely community engagement programme				Stronger management team appointed at the construction contractor Increased room capacity at onsite camp facility to facilitate larger labour component Night shift implementation Stricter expenditure approval process
3		Lower copper and gold grades		3		Turnover of key personnel
		Continuous monitoring of grade reconciliation Drilling programme to target deeper ore resources Additional stockpile build-up to reduce risk of ore shortages due to higher cut-off grade				Review and enhancement of employee development programmes Flexible working arrangement to facilitate greater work-life balance Market-related salary increases Quarterly talent discussions held at leadership level
4		Increasing hardness of ore impacting processing throughput		4		Volatility of Australian gold price
		Ongoing blasting engineering project to optimise ore fragmentation Implementation of optimisation projects in the process facility to deal with increased hardness				Ongoing portfolio of business improvement projects Continued focus on cost controls Hedges in place for gold, currency and oil
5		Local social pressures, conflicts and community expectations		5		Native title legislation
		Proactive community and stakeholder relationships and engagement Crisis management plans to deal with potential conflict Stringent follow-up and feedback on all community commitments Involvement of government authorities in our social projects				Stakeholder engagement strategies and programmes in place Extend business opportunities and job placement to Indigenous groupings, where feasible Finalisation of a holistic strategy for Indigenous Engagement Development of a Reconciliation Action Plan Ongoing legal and specialist support

		Americas region				Australia region
		RISKS/OPPORTUNITY AND MITIGATING ACTIONS				RISKS/OPPORTUNITY AND MITIGATING ACTIONS
1		Fiscal and government policy changes		1		Loss of investor confidence due to non-achievement of the business plan
		Frequent engagement with relevant government departments Intensive engagement via the Chamber of Mines Ensure adherence to principles and conditions in the Development Agreement (DA) Back-up legal strategies				South Deep workforce has been restructured through the Section 189 process – ensure the right people in the right roles Frontline leadership, productivity and ways of working intervention Effective and sustainable management operating system Identify business improvement initiatives and drive implementation Improvement of fleet reliability and utilisation Adaptation to Eskom supply constraints and developing longer-term strategies for power self-sufficiency
2		Under-performance of contractor mining at Tarkwa		2		Poorly defined execution strategy
		Updating and monitoring key contract milestones Implementation of continuous improvement initiatives Dedicated team to address and mitigate shortfalls in contractor performance				Develop and roll out key visual control standards Organisational restructuring frontline coaching Implementation of a business improvement process Improved fleet utilisation Ore pass/tip/discharge chute rehabilitation Roadway and footwall (water) management
3		Execution of Damang mine Reinvestment project		3		Inappropriate organisational structure
		Implementation and delivery of milestones under the reinvestment plan Fit-for-purpose organisational structure and continuous improvement initiatives Ongoing monitoring of contract mining milestones Pit-wall control implementation				Embed new HR structure Fit-for-purpose organisational structures with the right people in the right roles Robust talent management system Identity, develop and recruit successor for critical roles
4		Reserve depletion at Tarkwa – inadequate organic growth and life-of-mine extension		4		Ageing infrastructure
		Bringing the Asanko JV ounces to account and aligning processes and systems Continued brownfields exploration to test for further potential at Tarkwa I&T programme to improve operational and processing efficiencies Ensure utilisation of DA benefits for long-term exploration potential				Replacing ageing infrastructure based on an inventory of our assets Utilise South Shaft for mining services only to enable extended maintenance Implementing infrastructure and maintenance improvement projects Independent risk engineering audit conducted on infrastructure and fire risks with a five-year remedial action plan developed
5		Optimisation of Independent Power Producer (IPP) arrangements		5		Health and safety of our employees
		Continuous monitoring of IPP performance Full commissioning and expansion of power plants at both Damang and Tarkwa Completion of the gas pipeline to supply plants with natural gas replacing the road trucked liquid gas				Roll out and effective monitoring of the safety management systems Implementing behaviour-based safety programmes and the Courageous Leadership programme Effective baseline risk management process identifying major unwanted events and verification of effective critical controls Strengthen systems for effective reduction of dust and noise exposure levels Implementation of South African mining industry’s occupational safety and health initiatives