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  Arrow Tarkwa Gold Mine
  Arrow Damang Gold Mine
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  Arrow St Ives Gold Mine
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Arrow South America Region
  Arrow Cerro Corona Gold Mine
Arrow Exploration and Business Development
Arrow Mineral Resources and Reserves
   
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REVIEW OF OPERATIONS: SOUTH AFRICA REGION

F2009 Achievements

  • Improved safety by 50%.
  • Successful completion of infrastructure rehabilitation and priority secondary support backlog.
  • South Deep remodelled and operational plan complete for build-up.
  • Uranium Mineral Resource defined.

Vishnu Pillay
Executive Vice President: Head of South Africa Region

Since assuming responsibility for Gold Fields’ South African operations this past year, three key areas of focus have been introduced: vigorous attention to safety; improved secondary support initiatives to secure the integrity of the deep level haulages; and an enhanced planned maintenance programme. Despite numerous challenges, tremendous improvement has been made on all three fronts.

Growing our production is a major priority, but we will only do this through a safe and responsible approach. It is exceptionally gratifying to report that all safety indices have improved over the past year in the South Africa Region: our fatal injury frequency rate improved by 50 per cent; the lost day injury frequency rate by 39 per cent; and the serious injury frequency rate by 32 per cent. On 12 June 2009, Driefontein recorded in excess of 2.85 million fatality free shifts, which is a record achievement for the mine and has set a new benchmark for deep level gold mining. The benefits of the step change in the approach to safety cannot be underestimated and the positive impact on the morale of the Gold Fields people has been visible. The focus on further improving our safety record in the year ahead will be maintained by targeting an improvement in each of the key indices by aiming to achieve a further 33 per cent improvement, year on year.

The rapidly deteriorating backlog in secondary support and infrastructure rehabilitation across all operations has largely been completed. At Kloof, the Main shaft steel work rehabilitation was completed in December 2008. With regard to enhancing planned maintenance, condition assessments are being conducted on all vertical mine shafts and plant infrastructure. Audits have been done to identify all repairs required. Of course, other important imperatives remain on the operational front and structured project initiatives are in place to ensure, among various activities, optimised energy and utilities consumption, an increase in production, better ore reserve management, and a plan focused on a tripartite health and safety summit aimed at the implementation of a zero harm policy for all our workers.

The energy and utilities projects, comprising power, diesel and the related consumption of air and water, target savings of R130 million per annum at current tariff levels by the end of F2010. This should be achieved by way of a 10 per cent reduction in power consumption and a 20 per cent reduction in diesel consumption. Significant improvements have been made and we are well on track to achieve these targets.

We are implementing mechanised equipment in all flat-end development areas at the long-life shafts of Driefontein, Kloof and Beatrix and we aim to achieve this by the end of F2010. An improvement in safety, productivity and increased reserve flexibility is already evident. We are targeting a mechanised rate of 100 per cent by the end of 2010, with some 46 per cent of development having been mechanised to date, with unit cost, equipment efficiency and labour productivity improving on a daily basis.

At the South Deep project, which secures the long-term sustainability of the South African portfolio, we are continuing to focus on delivering the build-up to planned development metres, as well as the completion of the Twin shaft infrastructure. The recommissioning of South shaft for hoisting has been partially completed and single shift hoisting is being planned in F2010. Current new mine development rates should deliver the infrastructure necessary to build to full production of around 750,000 to 800,000 ounces per annum by December 2014.

The West Wits Tailings Reprocessing project (Uranium project) team has achieved numerous milestones over the year. This project aims to assess the viability of extracting gold and uranium, as well as sulphuric acid, from existing tailings facilities. The achievements over the last year include the completion of the drilling and evaluation work, as well as the mineral resource model. The metallurgical test-work has advanced considerably, while all the data accumulated in the prefeasibility study is being compiled into financial models for the combined feasibility study, which is to be presented to the Board of Directors in early 2010.

We are pleased with the two year wage deal that was achieved for F2010 and F2011. The mutually beneficial agreement underscores the improving relations with the union bodies in South Africa and we will strive to continue this positive engagement in future. I am exceptionally pleased with the progress made at the South African operations, despite the difficulties experienced. The dedication, combined with significant contributions from the entire team has been nothing short of extraordinary. My gratitude and thanks to all involved in South Africa.

F2010 Focus Areas

1 Improve safety.
2 Increase Ore Reserve Development.
3 Deliver South Deep project successfully.
4 Create a pipeline of skills.

Vishnu Pillay