Government

As the issuers of mining licences, developers of policy and implementers of regulations, host governments are among Gold Fields' most important stakeholders. This first and foremost requires our full 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 levels to establish sound and transparent working relationships that benefit the countries and host communities. This is particularly relevant during the Covid-19 pandemic, where our mines and project have actively assisted governments in managing and mitigating the impacts thereof.

Gold Fields does not provide financial contributions to political parties and lobby groups unless explicitly approved by the Board of Directors in accordance with the Company's Code of Conduct. No political donations were made during 2020.

Gold Fields' tax strategy is to proactively manage 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.php

Resource nationalism

Many governments, particularly in developing countries, view the mining industry as an easy target for higher taxes and other fiscal and regulatory imposts, especially during tough economic times. This has been exacerbated during the current Covid-19 crisis, as governments have faced declining tax revenues while metal prices in general, and gold in particular, have recorded healthy gains over the past two years. Gold Fields, on its own and in conjunction with its peers, seeks to address the trust gap that exists between government and miners in a number of ways, including the following:

• Consistently creating between US$2bn and US$3bn in total annual value for our wide range of stakeholders, including governments and communities
• Actively promoting host community value creation through host community employment, procurement and investment
• Working with our peers in the ICMM to promote industry-wide best practice and demonstrate the benefits of a responsible and fairly regulated industry

During 2020, we conducted independent desktop resource nationalism assessments in Ghana, Australia, Peru and Chile, which provided valuable input on how to increase trust and confidence among governments and communities. The key proposals reinforce many of the key strategies already being implemented by our operations, namely strengthened engagement with governments at all levels, community value creation and improved communication on the socio-economic benefits of mining.

Our regions are acting on these recommendations through the implementation of government action plans, and are seeking to work with our mining peers in these countries on enacting others.

The Covid-19 pandemic has also served as a catalyst to work more cooperatively with governments. With Covid-19 threatening the tax income of governments, we found more common ground with them. In most of the countries where we operate, governments declared mining an essential service, allowing us to continue operating when other sectors' activities were curtailed. At the same time, we and other mining companies actively supported governments by providing facilities, health resources and much-needed funding. During 2020, our mines donated well over US$3m in medical and sanitary equipment and other goods to host communities and governments.

Americas region

Our engagement in Peru is focused at local, regional and national government levels to address operational, social and sustainability matters. Over the past two years, Peru has seen three changes in its national government. Still, the new administrations have by and large been business-friendly and respecting private sector investment. Our engagement is largely carried out via the National Chamber of Mines, Oil and Energy, especially on regulatory matters.

The industry enjoys good working relationships with various ministries. Traditionally, regional and local-level officials in the Cajamarca province, where our Cerro Corona mine is located, have criticised extractive companies' environmental and social standards and adopted anti-mining strategies and policies. We are seeking to build trust between mines and communities and have entered into a number of formal agreements with state entities.

As a result of the Covid-19 pandemic we have again intensified our engagement activities in our areas of influence, which is primarily the Hualgayoc community but extends to communities downstream of our mine, including the Bambamarca municipality. The extension of Cerro Corona's life-of-mine to 2030 will also require more long-term community investment programmes and strategies.

In Chile, most political and social stakeholders have welcomed our decision to proceed with the construction of the Salares Norte mine in northern Chile. Albeit in a Covid-19 impacted low investment environment, Salares Norte was one of Chile's largest investment projects during 2020 and was identified by the government as a key project for economic upturn in the Atacama province.

During 2020, engagement in Chile, focused on supporting communities, in coordination with regional and local governments to scope the economic and social impact of the pandemic, and on the implementation of a tight permitting plan for Salares Norte. We have been able to obtain all the permits required for construction of the mine as planned, and no delays were registered.

The decision to build the project was taken in the run-up to the constitutional referendum in October, where the large majority of voters decided to begin the process of drafting a new constitution, formally set to commence in April 2021 and lead to new elections later this year. This is not expected to result in policies that could potentially disrupt the construction of the mine.

Australia region

Our engagements in Australia are primarily focused at state and local government levels to address economic and sustainability matters.

The Labor government in Western Australia, which increased its majority after state elections in March 2021, has pursued broad-ranging legislative reforms aimed at streamlining regulation to encourage investment in the region. A key component of this agenda is the 2020 reform of the Environmental Protection Act 1986. While not representing wholesale reform, the changes serve to modernise the Act and make its regulatory processes more "efficient, risk-based and flexible".

The state government also progressed a comprehensive reform of workplace safety laws, with the new Work Health and Safety Act replacing the existing parallel regimes for general workplaces and mine sites. Specific regulations for general industry, mining and petroleum will supplement the Act, and are expected to be passed in late 2021. We continue to participate in the consultation process through the Chamber of Minerals and Energy.

The current framework for the protection of Aboriginal cultural heritage in Western Australia has also been the subject of an extensive review and public consultation process over the current term of the state government, with this framework subjected to intense scrutiny during the Parliamentary Inquiry into the destruction of ancient caves at Juukan Gorge in 2020. The new proposed legislation, which will replace the Aboriginal Heritage Act in its entirety, is expected to significantly expand existing protection for Aboriginal cultural heritage by introducing a risk-based, layered approach of due diligence and approvals for activities that may harm cultural heritage values, as well as significantly increasing the range of offences and penalties for any breaches. Gold Fields has provided feedback through its involvement in the CME. The new legislation is expected to pass and come into effect during the course of 2021.

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, which comes into effect if we spend US$500m at each of the two mines – over an 11-year period for Tarkwa and a nine-year period for Damang – 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$1,760/oz average gold price our mines received during 2021 attracted an average royalty of 4.1% in terms of the formula.

The DA does not apply to Asanko, in which Gold Fields acquired a 45% stake in 2018. However, this transaction and our US$340m investment in Damang illustrate 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 2021, Gold Fields paid over US$215m in direct taxes, royalties and dividends to the government of Ghana (2020: US$171m). The government holds a 10% interest in the legal entities controlling the Tarkwa, Damang and Asanko mines.

We continue to engage the government, through the Ghana Chamber of Mines, on the proposed requirement to sell a portion of gold produced in Ghana to a local refinery for value-addition purposes. The Chamber has presented government with a number of options on how this could be implemented without financial detriment to local mining companies. These are being reviewed by the government.

The national elections held on 7 December 2020 were largely peaceful and the government under President Nana Addo Dankwa Akufo-Addo was returned by a slim majority, though the outcome has been formally contested by the opposition party. The outcome of the election has no material impact on Gold Fields.

South Africa region

From a regulatory perspective, Gold Fields' South Deep mine is guided primarily by the Mineral and Petroleum Resources Development Act No 38 of 2002 (MPRDA). 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 provides for a range of empowerment actions and community investment programmes with a corollary timeframe and all mining rights holders are required to submit an annual compliance assessment on progress made against the annual targets in the Charter. Gold Fields continues to comply with this process.

The Department of Mineral Resources and Energy (DMRE) published Mining Charter 3 (MC3) in September 2018. The Minerals Council South Africa (MCSA), which represents the industry, considers most aspects of the Charter a framework within which the industry can operate. There are, however, critical areas over which Gold Fields and the industry have concerns, namely that the Charter does not fully recognise the Black Economic Empowerment (BEE) ownership credentials of previous BEE transactions. This is applicable to new mining rights applications, renewals and transfers.

The MCSA continues to engage with the DMRE to resolve the concerns around the MC3 and has filed an application in March 2019 for a judicial review and setting aside certain clauses of the Charter. The judicial proceedings are ongoing.

Gold Fields supports achieving a solution that is viable to support economic growth and transformation while, at the same time, fostering a sustainable mining industry in South Africa in which investment is encouraged and rewarded.

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.

Mining Charter Scorecard

All mining rights holders in South Africa are required to submit an annual compliance assessment to the DMRE on progress made against the annual targets in the Mining Charter. South Deep's performance against the Charter scorecard in 2020 scorecard is displayed below.

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 employees and 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 skills and human resource development, employment equity plans and facilitated home ownership as well as mine community development.

The SLP for the period 2018 to 2022 was submitted to the DMRE in December 2017 and approved for implementation in 2019. The SLP outlines financial commitments of over R283m (US$20m) over the five-year period, with the bulk of this – R258m (US$18m) – being dedicated to human resource development programmes, including learnerships, bursaries and skills development, for both the workforce and members of our host communities. Of the mine community development commitments, R17m (US$1.2m) is targeted at our host communities in Greater Westonaria and R8m (US$0.6m) at communities in labour-sending areas, particularly the Eastern Cape. Nine projects are included in the approved SLP and seven projects were active during 2020.

Our housing plan was resubmitted in Q4 2020 and allows for home ownership investment decisions to be driven by employees themselves. The housing policy is aimed at facilitating affordable home ownership and access to decent accommodation options by providing for a housing allowance, a living-out allowance, the provision of mine owned accommodation for rental, and financial support for home ownership. Home ownership can include purchasing new or existing homes, upgrading a home or purchasing houses from South Deep. Implementation of the new policy started in Q1 2021.

South Deep MC3 2020 Scorecard