Energy and carbon management

Gold Fields' operations depend on consistent energy supplies. In 2022, our total energy spend amounted to 21% of our total Group operating costs (2021: 18%).

Gold Fields' Energy and Carbon Management Strategy addresses our key energy priorities: security of supply, cost-effective electricity, reducing energy consumption and carbon emissions. This is supported by energy management systems aligned to the ISO 50001 standard. Our Cerro Corona, Damang and Tarkwa mines have been certified to ISO 50001 and we aim to have all our operations certified by the end of 2023.

The key initiatives to achieve our energy objectives are:

• Increasing the use of renewables
• Improving energy efficiencies
• Training and awareness programmes for our workforce

• Trialling and use of zero-emission vehicles

Several of our initiatives assist us to reduce our carbon footprint, such as switching fuel from diesel to gas, or from gas to renewable sources. Energy efficiency initiatives have the dual benefit of improving energy productivity and reducing our carbon footprint, including:

• Optimising compressed air systems and new ventilation fans and controls
• Using high precision drill rigs to minimise rework
• Using fuel additives and other business improvement initiatives to optimise equipment energy consumption
• Using larger trucks to move more material with better fuel efficiencies

Energy and climate change performance

Energy performance

Overall, our energy spend increased by 24% during 2022 to US$424m (2021: US$341m), mainly due to higher oil prices.

Total energy spend, which combines the Group's electricity and fuel spend, amounted to 21% of total operating costs in 2022, up from 18% in 2021. This represents 16% of AISC (2021: 14%) and translates to AISC of US$165/oz (US$110/oz).

Gold Fields made a net gain of US$22m on oil price hedges during 2022 (net gain of US$21m in 2021), as the oil price increased by 7% during the year. There are no further oil price hedges in place (read more in Financial performance).

Total energy consumption increased by 1% to 14.1PJ compared with 13.9PJ in 2021, as gold production was marginally higher during the year. The energy mix was made up almost equally of haulage diesel and electricity.

During 2022, Gold Fields spent US$45m on energy and emission savings initiatives (including renewable investments), which resulted in energy savings of 1.08PJ in 2022 (2021: 1.21PJ), and a cost saving of US$53m – equal to US$21/oz. Since the launch of our Energy and Carbon Management Strategy in 2017, Gold Fields has realised cumulative energy savings of 5.46PJ, resulting in cumulative cost savings of approximately US$231m.

The investment in energy savings is also reflected in the decline in energy intensity, which reduced to 5.49GJ/oz in 2022 (2021: 5.66GJ/oz). This has been achieved despite more energy-intensive mining over the past few years as we mine deeper at our underground mines and have to travel longer haulage distances at many of our open-pit operations.

Emissions performance

Our carbon emissions performance mirrors our operations' energy use trends. Total Scope 1 and 2 CO₂e emissions during 2022 were marginally higher at 1.72Mt (2021: 1.71Mt), in line with increased gold production and amid the delay in commissioning of the two solar plants.

Emission intensity dropped to 0.67tCO₂e/oz in 2022 from 0.70tCO₂e/oz in 2021. Emissions reductions from savings initiatives totalled 302kt CO₂e3 during 2022 (2021: 306kt CO₂e), in line with internal targets.

1	Electricity includes direct and indirect electricity including diesel for power
2	Other includes Petrol, LPG, Pipeline Natural Gas (2021) and Acetylene
3	Group emissions avoided from the installation of gas turbines supplied by a pipeline for Tarkwa and Damang (166kt CO2e or 55% of the Group total emissions avoided) are included in site, region and Group reporting, and recognised as an exceptional continuous project as approved by the Gold Fields Group Head of Energy and Carbon. This project is of strategic importance to the Tarkwa and Damang operations and the Group as it is a major change, with significant capital investment, impact, complexity, and stakeholder involvement

It is envisaged that overall emissions and emissions intensity will continue to decline during 2023 as the South Deep and Gruyere plants will be operational for a full year.

As illustrated in the adjacent graph, we foresee that our Scope 1 and 2 carbon emissions will decline from 1,715kt CO₂e in 2022 to 1,671kt CO₂e in 2023. This will decrease to 1,111kt CO₂e as we roll-out renewable energies, implement energy efficiency initiatives and gradually replace diesel in our fleet. This is just below our 2030 target of 1,185kt CO₂e, a net emissions reduction of 30% from our 2016 base. Without these programmes, Gold Fields' emissions would rise to just under 2,395kt CO₂e by 2030.

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RENEWABLE ENERGY

In our quest to strengthen security of affordable energy supply, reduce costs and decarbonise our energy sources, we have successfully started integrating renewable energy into our energy supply mix. We are currently operating large-scale renewable energy plants at four of our eight mines. All our mines are evaluating renewables plants, carrying out trials on battery-electric or low-carbon vehicles and exploring options to increase the renewable energy portion of their energy consumption.

The Group obtained 14% of its electricity from renewable sources in 2022. This includes hydroelectricity used by Cerro Corona, which was certified as 100% renewable during 2022. Based on our current estimates, we expect this to increase to 22% by 2025, with renewable microgrids anticipated to come on-stream at St Ives and Salares Norte, and additional renewable capacity set to be added to the existing microgrids at Granny Smith, Agnew, Gruyere and South Deep by then.

Most of our renewable plants are, or will be, managed by IPPs, who recoup their capital investment via a long-term supply agreement with our mines. Where funding from Gold Fields is required, this is largely from operational cash-flows. This was the case with the R715m (US$46m) solar plant at South Deep.

We envisage that renewables will account for approximately 70% of the Group electricity mix by 2030 and, by 2050, this will increase to 100%. The remaining emissions savings will stem from further energy efficiency initiatives, as well as the gradual replacement of our diesel-powered fleet with zero-emission equipment. We are piloting some of these vehicles at various mines while also working with our peers in the ICMM to ensure rapid progress in rolling out safer and cleaner vehicles.

Our decarbonisation roadmap

In Australia, we are teaming up with peers in the Electric Mine Consortium to explore ways of eliminating emissions at mine sites.

Australia

Agnew is our flagship renewables mine, and one of the first gold mines in the world to generate over half of its electricity requirements from renewable sources, namely wind and solar. Agnew averaged 57% overall renewable electricity in 2022, with up to 85% in favourable weather conditions. We are exploring additional opportunities to increase this percentage by reducing gas engine constraints, introducing renewable energy storage and adding more solar panels.

Granny Smith's hybrid system – comprising 8MW on-site solar, 2MW battery power systems and a gas power plant – generates 10% of its electricity supply from renewables. Finally, at the Gruyere mine, a 12MW solar plant was commissioned in Q3 2022, accounting for approximately 10% of its electricity consumption. 

At St Ives, a feasibility study continues to evaluate alternative power sources for when the current power supply agreement ends in 2024. Community engagements have been successfully concluded and a feasibility study is in progress, with a project proposal likely to go to our Board later this year. We are targeting 75% – 85% energy from a solar and wind microgrid and other options.

During 2022, 12% of the region's electricity requirements were met through renewables, up from 10% in 2020. The investment in renewables and energy efficiency initiatives were responsible for the region's 2022 carbon emissions savings of 90kt CO₂e.

South Africa

In South Africa, the mining sector has been hard hit by extensive "load-shedding" by the sole power supplier, state-owned Eskom. This has required the mine to curtail certain operational activities at times and utilise diesel-powered generators.

The completion of the 50MW Khanyisa solar plant in Q4 2022, with commissioning finalised in Q1 2023, has already alleviated some of the pressures to curtail activities during load-shedding. The cost of the plant was R715m (US$46m) in line with the approved capital.

The solar plant will provide approximately 24% of South Deep's electricity needs and is expected to save the mine R125m (US$8m) a year, or more, depending on the tariffs charged by the state provider Eskom. Estimated emissions reductions a year are 110kt CO₂e.

South Deep is looking to add an extra 10MW in solar capacity in due course and is also studying the use of wind power and battery storage.

To supplement solar electricity, and possibly provide additional energy at night, the mine commissioned a meteorological mast in Q4 2022 to evaluate wind as a source of energy. A decision on the viability of wind turbines will be made later once sufficient data has been collected and analysed. The Environmental Impact Assessment commenced in December 2022.

Chile

We are developing a 26MW hybrid solar and thermal power solution for the Salares Norte project. Diesel generators will provide 16MW, which will be functional once the operation starts production, with a 8MW solar plant to be added in early 2025. Once fully operational, it will be the highest solar plant in the world at over 4,500m above sea level, and provide approximately 20% of electricity to the mine.

The plant, which applied for its environmental approval in February 2023, is set to save the mine over US$7m in energy costs over the first 10 years, and reduce its carbon emissions by 10kt CO₂e a year.

Peru

Cerro Corona is the Group's mine with the lowest carbon emissions, due to its reliance on hydro-power for its electricity supply, which has been certified as 100% renewable since 2021.

Climate change

Gold Fields is acutely aware of the severity of climate-related risks, as well as societal expectations that companies should play their part in reducing carbon emissions.

Failure to implement climate change adaptation measures is among the top 15 Group risks. Adequately addressing this risk requires understanding of likely future climatic conditions.

The impacts of climate change on Gold Fields and its stakeholders are real and immediate, mainly due to:

• The long-term risks posed by climate change to the Group's operations and surrounding communities
• Increasing efforts to regulate carbon emissions in most of our jurisdictions
• Taxes on non-renewable energy consumption are increasingly being imposed by governments

We conduct regular climate risk and vulnerability assessments to understand the risks and vulnerabilities for our people, communities and operations and to implement appropriate adaptation measures.

Critically, this includes work – as part of our conformance to the GISTM – to ensure our tailings dams can withstand the higher rainfalls and more frequent and stronger storms resulting from climate change.

Mining and processing of gold is an energy-intensive process. This is increased by changing geology, declining grades, longer haulage distances and increasing mine depths requiring additional cooling and ventilation infrastructure.

Managing energy usage enables us to reduce our carbon footprint and costs.

Climate change headlined our Group 2030 ESG priorities. The targets include:

• Reiterating our commitment to net-zero emissions by 2050 in line with our signature of the Paris Agreement
• Reducing our total (net) Scope 1 and 2 carbon emissions by 30% by 2030 against a 2016 baseline, despite planning to grow attributable gold production from 2.20Moz to approximately 2.80Moz over the period
• Over the same period, reducing these (absolute) emissions by 50% compared with what they would have been under business-as-usual operating conditions
• Gold Fields plans to announce its Scope 3 targets by the end of 2023

The investment in decarbonising Gold Fields is estimated at approximately US$1.2bn until 2030. A significant share of the capital will be funded through power purchasing agreements (PPAs) with independent power producers (IPPs), though increasingly we also seek to self-fund some of these projects. All projects are expected to be net present value positive. To date, we have invested close to US$500m in renewable energy projects, at South Deep and our Australian mines, the latter largely funded through PPAs.

Details of our energy management and climate change approach, policies and guidelines can also be found at
https://www.goldfields.com/energy-and-climate-change.php