Risks and opportunities

Gold Fields' approach to enterprise risk management (ERM) is based on the requirements of King IV Report on Corporate Governance for South Africa 2016 (King IV^TM)¹, the South African Corporate Governance Code of Conduct and ISO 31000, the international guideline on risk management. The Group also subscribes to the risk management requirements of the ICMM's 10 Principles.

Gold Fields' ERM process comprises the following three pillars, which are deployed intuitively and form part of our day-to-day operations:

Risk management is integrated into all our business processes. Leadership teams at corporate, regional and mine level conduct formal quarterly risk management reviews, assessing risks to the business and tracking and monitoring progress against mitigating actions. These reviews are then presented to the Board's Risk Committee twice a year for verification.

As a global company, we continue to be shaped by the external dynamics of the regions where we operate. We discuss the impact of longer-term, emerging global trends in general and on Gold Fields on Catastrophic risks.

RISK APPETITE AND TOLERANCE

Understanding the relationship between our strategy and our approach to evaluating risks as a basis for setting Risk Appetite and Tolerance (RA&T) is crucial. Firstly, RA&T does not relate to the risk itself, but rather the consequences of such a risk - this distinction is important to establish a practical set of RA&T positions.

We use our strategic objectives as a starting point, the achievement of which is critical for setting our RA&T levels. It follows that the consequences of the risks we are exposed to can create a variance from where we aim to be in terms of our strategic objectives. The level of variance we are willing to accept without making significant changes to the strategic objective sets the variance point for our risk appetite, while the level of variance we can accept in each of our top strategic risks before we need to review our risk treatment plans determines our tolerance position.

To support the achievement of strategic objectives and business plans, and to monitor tolerance positions, Gold Fields has a comprehensive monthly and quarterly business review process in place. Performance is monitored and shortcomings are addressed swiftly and effectively. A colour-coding system is used during presentations to alert executives if targets are being achieved, and enables discussions around remediation measures.

Shortly after the quarterly business reviews are concluded, the Board conducts quarterly governance and oversight meetings, as part of its annual Board cycle, during which significant aspects of the business are comprehensively questioned and reviewed. Any misalignment with Company objectives or good corporate governance is discussed and remedial action requested. This is in line with our formal Approval Framework, which strictly defines decision parameters and risk tolerance.

For a more detailed assessment on how we determine our risks and materiality, see www.goldfields.com/risk-materiality.php

Top 15 Group risks in 2022

	RISKS AND OPPORTUNITIES		Mitigating strategies
(2021:1)	Gold/currencies Volatility of the gold price and currency exchange rate		We design our business plans based on a conservative gold price and set free cash-flow targets for our operations. This is reinforced by our new strategy, which stresses asset optimisation as well as growth. We monitor these plans through monthly and quarterly cost, capital and production reviews, during which we discuss and implement remedial actions, if required. We only use foreign exchange, oil or metal price hedges in line with our hedging policy.
(2021:3)	Inflation/mining costs Rising mining costs		All our operations have business, productivity and cost improvement processes and programmes in place. These are supported by our Innovation and Technology Strategy to reduce costs and enhance revenue generation. We conduct monthly and quarterly business cost and capital reviews to ensure spending remains in line with plans. Our mines provide cost guidance to the market at the beginning of each financial year.
(2021:6)	Salares Norte Delays and cost overruns relating to the Salares Norte project		During 2022, the Salares Norte project was hampered by the continued impact of Covid-19 and severe weather, exacerbated by the serious skills shortages in the Chilean mining sector. The latter resulted in a suboptimal performance by the main contractor. As such, Gold Fields delayed first gold production to Q4 2023, resulting in additional costs and a revised Group production guidance. Further delays would require a revision in the longer-term guidance and undermine management's credibility.
(2021:2)	Political risk/resource nationalism Resource nationalism, regulatory uncertainty and government imposts, including the Ghanaian economic and fiscal crisis, political uncertainty in Peru and Chile, and South Africa's poor economic performance		Our regional management teams seek to regularly engage with relevant government authorities to ensure compliance with investment agreements, where they are in place. Further engagement is undertaken through the countries' mining associations, where we work with our peers. More recently, we strengthened government engagement through annually updated government action plans, which are informed by independent country risk assessments. As a last resort, we review our legal options, particularly in terms of adherence to investment agreements - during late 2022 and early 2023, this particularly included the Development Agreement we have with the government of Ghana. For more information see stakeholder overview.
(2021:4)	Mineral Resources and Mineral Reserves Failure to replace Mineral Resources and Mineral Reserves beyond mine depletion		We continue to evaluate value-accretive opportunities to expand our business, including acquisitions, disposals, JVs, new mine builds and other strategic projects. Our regions have comprehensive near-mine exploration programmes in place, and we monitor our performance against these programmes during our quarterly business reviews. For most of the past few years our Australian mines have replaced depleted Mineral Reserves and more.
(2021:5)	Skills Challenges in attracting and retaining top-level, diverse talent and skills		Our business depends on fit-for-purpose human resource structures to meet operational requirements and enable a more diverse and inclusive workforce. We provide competitive and incentive-focused remuneration packages, flexible benefits along with flexible work options, where possible, to attract and retain in-demand skills. Our approach focuses on talent and development strategies and driving the right culture, and is designed to retain top talent.
(2021:7)	Safety Our employees' safety, health and wellbeing, including occupational illnesses		Our employees' safety, health and wellbeing are paramount. This drives us to continually review and upgrade our safety systems, programmes and culture. Our employees and contractors are regularly trained in industry-leading safety programmes such as Courageous Safety Leadership and Visible Felt Leadership. All operations are recertified to ISO 45001, the international occupational health and safety standard.
(2021:15)	ESG ESG-related stakeholder expectations and activism		In December 2021, the Board approved our new strategy, which included ESG as one of its three key pillars, along with comprehensive 2030 ESG targets. To ensure the targets are achievable, we worked extensively with our operations, including setting capital budgets. We report annually on our progress in achieving these targets. We also review our ESG programmes annually. This strengthened commitment builds on our leadership position and strong reputation in ESG.
(new risk)	Leadership Leadership transitions at executive level		Following the resignation of Gold Fields' CEO, announced on 13 December 2022, Martin Preece was appointed as Interim CEO. He has been integrally involved in Group-wide decisions, including strategy. The process to appoint a permanent CEO is well under way and overseen by the Board. A replacement for one of the four Executive Vice Presidents (EVPs) who resigned has been appointed and acting managers have been appointed for two of the others. The recruitment process to find permanent replacements continues. Gold Fields has a sound succession planning process in place as part of a recruitment processes to find suitably experienced candidates. Our regional operating model and strong operational management ensured operations continued to perform well.
(2021:11)	Social licence Loss of social licence to operate and ability to create stakeholder value		We continue to strengthen our relationships with host communities by engaging with and investing in them (including employment and procurement). We are developing flagship community programmes in each of our regions to have a lasting impact beyond the life-of-mine. In Australia, we are implementing an Aboriginal Engagement Strategy to guide relations with and create opportunities for Indigenous Peoples at our mines.
(2021:8)	Climate change Failure to implement climate change mitigation and adaptation measures		We are implementing an extensive Decarbonisation Strategy, with two major renewables plants commissioned in 2022. We continue to enhance our operations' resilience by rolling out energy efficiency initiatives, carrying out further renewables assessments and trialling zero and low-emissions vehicles. Given the growing impact of rising global temperatures and extreme weather events, we are conducting an in-depth assessment of the climate change vulnerability risk of all tailings storage and water storage facilities.
(2021:10)	Cybercrime Cybercrime and loss of information and communication technology (ICT) data		We continue to protect operational technology to decrease disruptions and ensure business continuity. Due to the dramatic global increase in cybercrime, we implemented a Group-wide software platform to protect critical infrastructure. All our mines and offices, except our Chilean operations, are ISO 27001 certified.
(2021:12)	Water security Water pollution, security and reduction in freshwater consumption		All our operations are ISO 14001-certified, which requires sound water management and disclosure. In 2021, we developed and integrated three-year regional water management plans across our operations. Our regions met their targets for water recycling, reuse and conservation, and are on track to meet the 2030 targets.
(2021:9)	South Deep Failure to maintain performance momentum and alignment with the build-up plan		South Deep exceeded its business plan of 10,000kg (322koz) of gold in 2022. The South Deep team continues to implement its management systems, driving disciplined execution of the mine's plans, and business improvement initiatives across the value chain. We measure the mine's performance against agreed targets and milestones monthly and report quarterly to the Corporate Office and Board.
(2021:13)	Covid-19 The impact of Covid-19 on our employees, communities and business plan		Our mines adhere to country-specific regulations, government decrees and protocols. We assisted governments to secure vaccines for our workforce and provided infrastructure and know-how for the roll-out of vaccination plans. Furthermore, we circulate hygiene awareness campaigns and screen, test and monitor our employees.