Integrated
Annual Report
2018
2018
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The quality of our relationships with our stakeholders, those individuals and organisations who have a substantial influence on our ability to create value, are integral to our licence to operate. We consistently balance the needs and expectations of our stakeholders with the best interests of Gold Fields, and therefore cultivate relationships that are open, transparent and constructive. Gold Fields has well established stakeholder engagement practices, and we actively engage our key stakeholders continuously on material issues and publicise these engagements. We consider the following to be our key stakeholders: shareholders and other investors, employees and contractors, communities, governments and business partners (suppliers).
Our Stakeholder Relationship and Engagement Policy, approved by the Board in February 2018, was rolled out during the year as part of the alignment with King IV "to adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the company". We further developed an internal portal to register material engagements with our key stakeholders. Our management teams have been incentivised to enhance the number and quality of their engagements with these stakeholders during 2019.
We create and distribute value for all stakeholders in the countries in which we operate. Our total value distribution, graphically depicted on p6, highlights the economic value we created at Group level during 2018, as well as value created in our individual regions. Gold Fields' total value distribution during 2018 amounted to US$2.71bn (2017: US$2.85bn), in the form of payments to governments, business partners, our workforce, host communities and capital providers.
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For details of our stakeholder relationship and engagement management approach, policies and guidelines go to www.goldfields.com/sustainability.php. |
Gold Fields has positioned itself as a globally diversified gold mining company with a portfolio that is characterised by mechanised underground and open-pit mining. Central to our vision of leadership in sustainable gold mining, is the objective of positioning the Group as a focused, lean and globally diversified gold mining company that generates significant free cash-flow, and provides investors with leverage to the price of gold.
Mining is a long-term game. As a business, we need to balance investing for future growth of our portfolio whilst generating cash today. Through our investment projects and strategic decisions, we aim to sustainably extend the life of Gold Fields' overall portfolio at lower costs than today. We believe that this is also a prerequisite for improving the confidence with which long-term investors as well as buy-side and sell-side market participants view Gold Fields.
For a full analysis of our stakeholder relationship with investors, see the Capital Discipline section on Summarised Remuneration Report and the Portfolio Management section on CEO Report
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Summaries of the stakeholder engagements held by corporate and each region in 2018 are available at www.goldfields.com/societal-stakeholders.php. |
Our workforce is critical to safe operational delivery. We remain focused on ensuring we have the necessary skills, culture and workforce profile required to meet our objectives and that our workforce is structured to support the delivery of immediate and long-term strategic objectives.
During 2018, the two most significant people-related developments were the restructuring exercise and related strike action at South Deep, as well as the transition from owner to contractor mining at Tarkwa. The key people-related balanced scorecard objectives were driving diversity and inclusion, managing the talent pipeline and ensuring succession planning for critical roles, and strengthening a values-based culture that drives delivery.
For a full analysis of our stakeholder relationship with our workforce see A fit-for-purpose workforce.
As the issuers of mining licences, developers of policy and implementers of regulations, host governments are among Gold Fields' most important stakeholders. This requires first and foremost good corporate citizenship from Gold Fields in terms of adherence to all relevant legislation, including the payment of taxes and other levies. We are committed to working with governments at national, regional and local level in establishing sound and transparent working relationships that benefit the countries and host communities.
Gold Fields does not provide financial contributions to political parties and lobby groups unless explicitly approved by the Gold Fields Board of Directors in accordance with the Company's Code of Conduct. No political donations were made in 2018.
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Gold Fields’ tax strategy is to proactively manage our tax obligations in a transparent, responsible and sustainable manner, acknowledging the differing interests of all our stakeholders. Our full tax strategy and policy can be found at www.goldfields.com/integrated-annual-reports.com |
A worrying development over the past few years has been a strong resurgence of resource nationalism in many leading mining jurisdictions. During 2018, these have been particularly pertinent in our South Africa and West Africa regions.
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Americas region |
Our engagement in Peru is focused at local, regional and national government levels to address operational, social and sustainable matters. A business-friendly national government is in power in Lima and our engagement with the relevant departments is largely carried out via the National Chamber of Mines, Oil and Energy, especially on regulatory matters. Gold Fields Peru’s legal stability agreement, signed with the Peruvian government in 1997 to facilitate the build-up of our Cerro Corona mine, expired during 2017 and Gold Fields is now subject to the same taxation regime as the rest of the mining sector.
Traditionally, regional and local level officials in the Cajamarca province, which is home to Cerro Corona, have adopted anti-mining strategies and policies, reflecting wider public sentiment among communities. During 2018 there were a number of socio-economic conflicts related to mining in the Cajamarca province, but a more business-friendly government was elected which has stressed the need to build trust between mines and communities. This will make it easier for our social and environmental policies as well as our extensive engagement with all stakeholders, to gain further traction and support not only from community members but also with regional and local authorities.
Our engagement activities will be intensified during 2019 following our tailings leak in December 2018 which, while having a negligible environmental impact, received wide publicity in Cajamarca province and led to same protest action at the mine. The extension of Cerro Corona’s life-of-mine to 2030 will also require more long-term community investment programmes and strategies.
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South Africa region |
From a regulatory perspective, Gold Fields' South Deep mine is guided primarily by the Mineral and Petroleum Resources Development Act (MPRDA) of 2002. In 2014, critical amendments to the MPRDA were tabled by the government in the MPRDA Amendment Bill, but the bill has still not been signed into law amid opposition to some of the proposed changes. Among other things, the proposed MPRDA grants the Minister of Mineral Resources discretionary powers which we believe go beyond the original intent of the Act and are unconstitutional, such as the ability to unilaterally set the terms of the Mining Charter at his/her discretion.
One of the key requirements of the MPRDA, which Gold Fields supports, is to facilitate meaningful and substantial participation of Historically Disadvantaged South Africans (HDSAs) in the mining industry. To provide guidance on this open-ended requirement, the Mining Charter, as revised in 2010, was published by the DMR, providing for a range of empowerment actions and a corollary time frame. In terms of the Mining Charter, all mining rights holders are required to submit an annual compliance assessment to the DMR on progress made against meeting the annual targets in the Charter. Gold Fields continues to comply with this process.
The DMR published Mining Charter 3 in September 2018 after consultation with the industry through the Minerals Council South Africa (MCSA, formerly the Chamber of Mines). The MCSA considers most aspects of the Charter a framework within which the industry can live. There are, however, critical areas over which Gold Fields and the industry has very deep concerns, namely that the Charter does not fully recognise the black economic empowerment (BEE) ownership credentials of previous BEE transactions. This is the case in respect of mining right renewals and transfers of these rights. Such a requirement has a severely dampening effect of the attractiveness of South African mining in the eyes of investors and appears also a breach of a Court declaratory order - handed down in April 2018 - which supported the so-called "once empowered, always empowered" principle. The MCSA continues to engage with the Minister and the DMR in an effort to resolve these concerns, and may also follow due process in this regard.
Gold Fields supports achieving a solution that is viable to support economic growth and economic transformation while at the same time fostering a sustainable mining industry in South Africa in which investment is encouraged and rewarded.
While the renewal of South Deep's mining licence is only due in 2040, we are concerned by the prospect of having to renegotiate our licence under completely different circumstances to those that prevailed when our licence was awarded in 2010. We believe that our current BEE ownership level of 35% meets the principles and spirit of the original Mining Charter, and has created the framework for the ongoing transformation of South Deep.
All mining rights holders in South Africa (including South Deep as the mining rights holder) are required to submit an annual compliance assessment to the DMR on progress made against meeting the annual targets in the Mining Charter.
Gold Fields has reviewed its 2018 performance against the 2014 Mining Charter. South Deep's 2018 scorecard is shown on this page and illustrates Gold Fields achievements against the provisions of an online scorecard created by the DMR in 2015. In aligning with Mining Charter 3, South Deep has conducted a gap analysis against the Mining Charter 3 scorecard guidelines released by the DMR in December 2018, though there are still some areas of uncertainty and ongoing consultations between the DMR and the MCSA.
As part of its obligations under its mining licence, South Deep also submits a five-year Social and Labour Plan (SLP). The SLP includes projects benefiting communities that are impacted by mining, both in host communities and labour-sending areas. An SLP requires the mining industry to develop and implement comprehensive local economic development, skills and human resource programmes (including employment equity plans and facilitated home ownership) and mine community development.
Under its 2013 to 2017 SLP, South Deep spent approximately R750m (US$53m) in terms of its various SLP commitments. A draft SLP for the period 2018 to 2022 was submitted to the DMR in December 2017 – and resubmitted in August 2018 – for approval. The draft SLP outlines future financial commitments of over R283m (US$20m), with the bulk of this – R258m (US$18m) – being dedicated to human resource development programmes, including learnerships, bursaries and skills development.
| Element | Description | Measure | 2018 Mining Charter compliance target | Progress against targets as at 31 December 2018 | |||||
| Reporting | Report on the level of compliance with the Revised Charter for the calendar year | Documentary proof of receipt from the DMR | Annually | South Deep annual submission | |||||
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| Ownership | Minimum target for effective HDSA ownership | Meaningful economic participation | 26% | 35% | |||||
| Housing and living conditions | Conversion and upgrading hostels to attain the occupancy rate of one person per room | Percentage reduction of occupancy rate towards 2014 target | Occupancy rate of one person per room | 0.49 person per room ratio | |||||
| Conversion and upgrading hostels into family units | Percentage conversion of hostels into family units | Family units established | 100% | ||||||
| Procurement and enterprise development | Procurement spent on BEE entity | Capital goods | 40% | 75% | |||||
| Services | 70% | 81% | |||||||
| Consumable goods | 50% | 91% | |||||||
| Multinational suppliers' contribution to the social fund | Annual spend on procurement from multinational suppliers | 0.5% of procurement value | 1.2% | ||||||
| Employment equity | Diversification of the workplace to reflect the country's demographics to attain competitiveness | Top management (Board) | 40% | 50% | |||||
| Senior management1 | 40% | 50% | |||||||
| Middle management | 40% | 45% | |||||||
| Junior management | 40% | 52% | |||||||
| Core and critical skills2 | 40% | 70% | |||||||
| Human resources development | Developing requisite skills, including support for South Africa-based research and development initiatives intended to develop solutions in exploration, mining, processing, technology, mining, beneficiation, as well as environmental conservation | Human resources development expenditure as a percentage of total annual payroll (excluding mandatory skills development levy) | 5% | 7.7% (R123m) | |||||
| Mine community development | Conduct ethnographic community consultative and collaborative processes to delineate community needs analysis | Implement approved community projects | Up-to-date project implementation | The two remaining 2013 - 2017 SLP projects, brought forward from 2017 - a poultry farm and a bakery - were fully implemented during 2018 with total spend of R4.8m. Regarding the 2018 - 2022 SLP, effective 1 January 2018, for which DMR approval is still pending -
project implementation commenced with a focus on project plans and Memorandums of Understanding with project partners. Actual implementation as at 31 December 2018 was therefore at 0%. This will accelerate once DMR approval has been received. R44.1m was spent on SED (including community trusts), with 0.05% spent on training 14 small medium and micro-sized enterprises (SMMEs). |
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| Sustainable development and growth |
Improvement of the industry's environmental management | Implementation of approved environmental management programmes (EMPs) | 100% | 100% An EMP performance assessment was undertaken in Q1 2018. The assessment was conducted by ECO Partners Consulting in terms of NEMA Regulation. The results of the assessment were submitted to the DMR in April 2018. South Deep is also ISO 14001:2015 certified, which assists tracking the implementation of the EMP commitments. In addition, the mine commissions annual reviews of the mine closure cost estimates, using independent experts. |
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| Improvement of the industry's mine health and safety performance | Implementation of tripartite action plan on health and safety | 100% | 96% The implementation of the two remaining programmes of the five culture transformation pillars (elimination of discrimination and risk management) is still in progress. |
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| Utilisation of South Africa-based research facilities for analysis of samples across the mining value chain | Percentage of samples in South African facilities | 100% | 100% | ||||||
| Beneficiation | Contribution towards beneficiation | Added production volume contribution to local value addition beyond the baseline | Section 26 of MPRDA (% of above baseline) | Current regulations and guidelines are not clear in relation to the baseline levels and targets. However, Gold Fields has made a capital intensive investment in our smelting facility at South Deep, which adds significant value to the gold being mined as well as creating jobs. Gold Fields also owns 2.76% of Rand Refinery, which has established the ''Gold Zone''. The aim is for the Gold Zone to become a major hub for precious metals fabrication in South Africa for global export, while at the same time assisting local communities with skills development (including beneficiation). |
| 1 | Includes members of the SA Regional Executive Committee and the South Deep mine Executive Committee |
| 2 | Core skills include A, B and C graded employees in the miner and artisan categories as well as officials with core skills for mining and/or working in a core mining area(s) |
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West Africa region |
In March 2016, Gold Fields Ghana entered into a Development Agreement (DA) with the government of Ghana for both the Tarkwa and Damang mines. The highlights of the agreement include a reduction in the corporate tax rate from 35% to 32.5% and a sliding scale royalty tax based on the gold price. The US$1,251/oz average gold price our mines received during 2018 attracted a royalty of 3%, the lowest in terms of the formula.
The DA applies if Gold Fields spends US$500m at each of the two mines for an 11-year period for Tarkwa and a nine-year period for Damang. The DA can be extended by a further five years should additional investments of US$300m each be made.
The DA was a critical consideration for Gold Fields Ghana to commence with the US$341m capital reinvestment programme at Damang during 2017. This investment has significant socio-economic benefits for communities around Damang. The DA will also lead to cost and cash-flow benefits for the Tarkwa mine. The mine has accelerated its near-mine exploration activities, which, if successful, will enable it to invest in future expansion when required.
Another DA commitment by Gold Fields was funding the construction of the 33km road between Tarkwa and Damang at an estimated cost of US$26m. This project is set to be completed in early 2019. The DA does not apply to the Asanko gold mine, in which we acquired a 45% stake during 2018, but our investment illustrates the confidence we have in Ghana's fiscal and regulatory framework.
The DA has cemented our status as one of the largest contributors to the country's fiscus. In 2018, Gold Fields paid US$90m in direct taxes, royalties and dividends to the government of Ghana (2017: US$105m). The government holds a 10% interest in the legal entities controlling our Tarkwa and Damang mines.
During 2018 the Ghanaian government issued a letter to the mining sector requiring all gold companies, including Gold Fields, to sell 30% of their gold production to the government with a view to refining it and adding value to the metal locally. The Chamber of Mines is continuing to engage with the government through a joint committee which is looking at mutually beneficial strategies to add value to the country's gold resources.
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Australia region |
During 2017, the gold industry twice managed to halt attempts by the Western Australian government to increase the gold royalty tax from 2.5% to 3.75%. Political pressures to boost state revenues from the sector remain. To garner ongoing public and political support for the industry Gold Fields, together with West Australian industry peers in the Gold Industry Group, will continue to highlight the positive social and economic contributions the sector makes and how this can be further enhanced through growth in gold mining rather than through higher taxes and royalties.
The commencement of the Native Title Act 1993 significantly changed the regulatory framework in Australia with respect to industry engagement with Indigenous People. Until recently, there has not been a legal requirement for Gold Fields to engage with Native Title groups, as our mines are located on mining tenements that were granted prior to the commencement of this legislation. This position has shifted significantly in the last few years, as Native Title claims have been lodged and determined over many areas in which Gold Fields operates. In addition, the entry into a joint venture with Gold Road Resources for development of the Gruyere project, has handed Gold Fields its first comprehensive agreement with a Native Title group for the development of a mine.
In response, Gold Fields has significantly stepped up engagements with Native Title groups in recent years and, during 2018, developed a comprehensive Indigenous Peoples strategy. The strategy, as well as our engagements, are discussed on Community relations in Australia.
In November 2018, the Modern Slavery Bill 2018 was passed by the country's House of Representatives. Companies with a turnover of A$100m a year will be required to report annually on their actions to ensure transparency in their supply chains, including the steps they are taking against modern slavery. A preliminary assessment of Gold Fields Australia's key human rights risks and the effectiveness of its control framework, including supply chain risks, has been undertaken. Gaps identified will now need to be addressed.
We recognise the importance of solid relations with our host communities to our social licence to operate. Host communities are identified by each of our operations for the purpose of securing our mining licences - both legal and social. These communities reside in the vicinity of our operations, have been directly affected by exploration, construction or operations, and have a reasonable expectation regarding the duties and obligations of the mining operator. We aim to avoid and minimise negative impacts of our operations on our host communities while maximising the positive benefits.
In 2018, all operations prepared community relations and stakeholder engagement strategies and three year plans focused on maintaining the social licence to operate in their host communities. The regions are progressing with implementation of their plans. Progress on highlights for all of our mines is outlined in the infographics .
We remain focused on social investment that results in a meaningful and sustainable impact on our host communities, and therefore strive to create Shared Value through host community employment and procurement.
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An infographic detailing how we create value for our communities. |
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For details of our community relations
and stakeholder engagement approach,
policies and guidelines go to www.goldfields.com/sustainability.php. |
Community investment drives integrated development. We focus on socio-economic development (SED) initiatives and Shared Value programmes to create and share value with our host communities. These projects create positive socio-economic impacts for host communities by targeting their priority needs, which we have identified as:
| Group and regional SED spend |
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| Group SED spend by type 2018 |
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We have invested US$25.7m (2017: US$17.5m) in SED projects in our host communities during 2018, mainly in the following areas:
These investments are detailed for each region.
We are committed to addressing community issues and concerns timeously and effectively. Therefore, we rely on a grievances system to maintain confidence and transparent communication with our stakeholders. Our grievance mechanism enables and encourages community members to freely put forward their complaints, while obligating our mines to address the grievances within an agreed period.
Not managing a complaint can lead to further conflict and discontent within our host community. In certain instances we engage members from our local communities to act as mediator should our teams not be able to resolve the grievance. During 2018, our operations dealt with 127 economic, social, and environmental grievances lodged by our host communities (2017: 76). 88 of these grievances were resolved and 39 are still being dealt with.
We conduct independent assessments to gauge the strength of our relationships with our host communities. In South Africa and Ghana, we use the ICMM Understanding Company Community Relations (UCCR) tool, while in Peru we have used the IPSOS research tool to assess our mine-community relationships.
Reflecting a positive upward trend in company community relationship at our operations, the headline findings of these assessments are reflected below:
| Region | Description | ||
| South Africa |  |
Community support rose from 33% in 2015 to 52% in 2017 | |
| Peru |  |
Community acceptance improved from 5% in 2012, to 7% in 2014, to 32% in 2016 | |
| Ghana |  |
Strong community support with a relationship index of 73% at Damang and 78% at Tarkwa in 2015 |
We plan to commission independent assessments of our community support again in 2019. Beyond the relationship assessment, Gold Fields has also instituted socio-economic impact assessments and piloted a social return on investment study of South Deep's community investment projects. These assessments focused on:
A presentation on the South Deep measures can be found at www.goldfields.com/presentations.php.
An SROI guide has been developed and we plan to roll it out at our other operations.
Shared Value is created when we take a proactive role in simultaneously addressing business and social needs, and benefit both communities and our mines. To achieve synergies of sustainable development with the communities, understanding Shared Value as an opportunity for mutual development is the generator of positive opinion for our work with the communities surrounding our operations, as well as the generator of solid ties of coexistence with our neighbouring communities.
Gold Fields continues to focus on maximising in-country and host community economic impact wherever it operates. In order to obtain this, we increase the proportion of sustainable host community procurement and employment to drive Shared Value. Group guidance on host community procurement spend and job creation, which are our most critical Shared Value projects, was developed during the year and was implemented in all our regions.
Both the communities and Gold Fields benefit from host community employment and procurement programmes.
We consistently strive to maximise local opportunities and employ host community members at our operations. We build a skills base in our communities through investments in education and skills development. We make our community a priority when employment opportunities arise and encourage our contractors and suppliers to also employ from the community. Job creation is further promoted through our SED initiatives.
A multi-disciplinary team at Cerro Corona works to increase host community employment by using host community employees for seasonal labour requirements.
Australia has a strategy to increase employment of Indigenous Peoples through growing a pipeline of work-ready persons, developing a culturally-inclusive workplace and creating broader opportunities for service provisions to the mines.
Both Tarkwa and Damang have community employment committees in place, comprising representatives from the community, to increase host community workforce employment - with a specific focus on youth employment. At Tarkwa, the community employment committee co-ordinated job vacancies with the mine contractors, who then recruited 130 youth from our host communities in 2018.
At South Deep, employment declined due to the restructuring process at the mine. Local economic development projects enabled 258 jobs.
In the table below we set out the number of host community members - including both employees and contractors - working at each of Gold Fields' regions in relation to our total workforce.
| Region | Host community workforce number - 2018 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||
| Peru | 633 | 27% | 28% | 23% | 29% | 24% | |||||||
| Ghana | 5,411 | 73% | 68% | 72% | 67% | 66% | |||||||
| Australia2 | 647 | 29% | 29% | 95% | 90% | 94% | |||||||
| South Deep3 | 2,568 | 55% | 16% | 13% | 14% | 12% | |||||||
| Group | 9,259 | 56% | 40% | 48% | 59% | 57% |
| 1 | Workforce comprises total employees and contractors |
| 2 | Australia's 2017 and 2018 performances are based on its new host community definition which is aligned with the Group's host community definition where communities are those living within an operations' direct area of influence. These numbers exclude the Perth head-office and the Gruyere project. Previous years' numbers have not been restated |
| 3 | South Deep's 2018 performance is based on its revised host community definition which is aligned with needs of the regulator, local government and community stakeholders as well as wit the Group's guidance. Previous years' numbers have not been restated |
In 2018, our operations set targets to increase their host community workforce employment. At the end of 2018, 56% of our workforce, or 9,259 people, were employed from our host communities. The sharp increase reflects the prioritisation of host community employment by our Ghanaian operations and the expansion of our South Deep host community to reflect the 2016 municipal boundary change. It now includes all individuals who reside in the Rand West City Local Municipality. The previous definition required individuals to own property in or have been born in the area. We seek to maintain the current levels of host community employment during 2019. Our management teams at the mines are incentivised to achieve long-term host community job creation targets.
We focus on host community procurement to create sustainable community jobs and supply opportunities. We achieve this by supporting areas where community suppliers can participate, identify community suppliers with the ability to supply the mine and providing skills development to close capability gaps. It is key that we procure goods and services from the countries and host communities, where feasible, given the remote locations of several of our mines.
The Group has made good progress on preferential host community procurement with all regions exceeding their 2018 targets. We spent a total of US$441m on host community procurement, which was 27% of our total spend.
Of our total procurement spend of US$1.81bn for 2018, 85%, or US$1.54bn, was spent by our mines on businesses based in countries where Gold Fields has operations (2017: US$1.62bn/88%). US$441m, or 27%, was spent on suppliers and contractors from the mines' host communities (2017: US$774m/45%). In 2019 we seek to sustain 2018 host community procurement spending levels.
| Local (in-country) spend | Host community spend | |||||||||||||||||||
| Region | 2018 | 2017 | 2016 | 2015 | 2014 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
| Peru | 96% | 90% | 89% | 87% | 88% | 16% | 7% | 8% | 7% | 5% | ||||||||||
| Ghana | 86% | 85% | 79% | 64% | 72% | 32% | 13% | 7% | 9% | 6% | ||||||||||
| Australia4 | 99% | 99% | 99% | 97% | 99% | 24% | 79% | 71% | 66% | 69% | ||||||||||
| South Deep5 | 100% | 100% | 100% | 100% | 100% | 29% | 18% | 14% | 10% | 9% | ||||||||||
| Group | 93% | 94% | 92% | 85% | 91% | 27% | 45% | 38% | 35% | 39% | ||||||||||
| 4 | Australia's 2018 performance is based on its new host community definition which is aligned with the Group's host community definition where communities are those living within an operation's direct area of influence. Previous years' numbers have not been restated |
| 5 | South Deep's 2018 performance is based on its revised host community definition which is aligned with needs of the regulator, local government and community stakeholders as well as with the Group's guidance. Previous years' numbers have not been restated |
West Africa
Both Tarkwa and Damang significantly exceeded their host community procurement targets of 15% by achieving 40% and 27% of total procurement spend respectively in line with the redefinition of host community procurement. The two mines spend a combined US$229m on procuring from host community suppliers. Following the transition to contractor mining at Tarkwa, the two mining contractors committed to the established procurement model, including procuring from established host community suppliers.
Americas
In Peru, host community procurement spend for 2018 was US$24m, 16% of total procurement spend, against a target of 9%. A steering committee was established to align host community procurement with Group guidance, deliver on spend targets and identify work opportunities to shift purchasing from non-host community companies to those enterprises within our host community, and to focus on host community employment by non-host community businesses.
Australia
In 2018, Australia invested a total of US$147m in host community procurement, 24% of total procurement spend, against a target of 18%, for the year. This region is implementing seven strategic initiatives for procurement processes to enable host community and Indigenous People participation in the value chain. We initiated a process of implementing the Host Community Vendor Programme, which is based on a three-phase approach aimed at identifying, engaging and mobilising local vendors.
South Africa
The definition of host community has been reworked in 2018 to include the Rand West City Local Municipality and all those that reside in it, and the 2018 host community procurement spend has been restated in line with the revised definition. South Deep's host community procurement spend for 2018 was R518m (US$39m), 29% of total spend and ahead of its 20% target for the year. In 2017 the spend was R448m (US$34m), 18% of total spend.
Beyond the relationship assessment, Gold Fields has also instituted socio-economic impact assessments and piloted a social return on investment study of South Deep's community investment projects.
These assessments focused on:
We plan to roll out similar studies at our other operations.