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| SUSTAINABLE DEVELOPMENTENVIRONMENTAL MANAGEMENTSupporting our overall Sustainable Development policy and framework, we have developed an environmental policy framework. Supporting the environmental policy, we are developing practice guides that serve as internal guidance for the operations. These practice guides serve to include guidance on:
Being an ISO14001certifiedcompany, the management systems practice guide mirrors the requirements of the ISO14001 standard andcontains the requirement for operations to maintain suchcertification. In the case of new operations, the practice guide provides guidance on how to achieve certification. In line with our material stewardship and supplychain management policy, we areconsolidating the requirements forconformance by our business partners and the environmental contract inclusions practice guide contributes to this process. During F2009 we started to develop acarbon strategy for the Group. The intention is toconsolidate ourcurrent practices and to position thecompany appropriately with regard to this important issue. It is expected that this project will becompleted early in the new financial year and that the strategy will be integrated into theclimatechange practice guide. Further information regarding our response toclimatechange is provided under theclimatechange and energy efficiency section of this report. As the issue of biodiversity is an essential component of our environmental management systems, we are consolidating our approach into a practice guide. We are fortunate to have considerable expertise in this regard and these experts are actively involved in the development of the document. We are also piloting an environmental economics system at a specific South African operation, with the intention to develop a standardised approach that can be replicated at the other operations throughout the Group. It is intended that this system will link into various systems such as SAP. On completion of the pilot, an environmental economics practice guide will be developed. On the closure front, we have a long-standing Sarbanes Oxley compliant protocol for closure provision. This protocol documents the approach to closure, strategic principles toconsider, and how to determine the provisioning quantum. The development of this practice guide was relatively simple as we converted our existing procedure into the practice guide format. All of the above practice guide documents went through an internal review process to ensure that they are appropriate to all operations. This approach also allows us to gain leverage from the substantial expertise in the Group and facilitates a process of knowledge sharing andcross pollination. Environmental management systems All of our operations have implemented formal environmental management systems that are ISO14001:2004 (Environmental Management Systems)certified. We are pleased to report that South Deep achieved certification during the year and that Cerro Corona has embarked on the process ofcertification. During the year, our certified operations have all undergone numerous audits as required by their certifications and we are pleased that all operations have retained their certifications. Our environmental management systems for exploration activities are also ISO14001certified and certifications for these activities have also been retained. The exploration offices have also deployed formalised environmental management systems and are ISO14001certified. Environmental data The primary function of Gold Fields Environmental Management System is to generate data for internal management purposes, principal among which are continual improvement, prevention of pollution, achievement of targets set by management, and the maintenance of legal compliance. The data presented in the tables below provides a sample of the range of information generated by this system and has been selected for its materiality as well as disclosure in terms of the Global Reporting Initiative (GRI) indicators. All data is based on direct measurement or calculations based on empirical data using generally accepted best practice methodologies. Instances where previous years’ data have been restated are highlighted in the table. None of these corrections are deemed to be material. The data for the underground South African operations will reflect different resource consumption when compared to the open-pit operations in Ghana and Australia. In South Africa, electricity provides the primary source of power required for the transportation of ore from the rock face to the processing plants; in the opencast mines this is done with diesel-powered trucks. Open-pit mines also do not need timber for roof support, as do the South African mines. They do, however, have a greater need forcement, which is an input for the heap leach operations. The other reagents used inside the plant vary in accordance with ore mineralogy. In F2008, we reported mainly on greenhouse gas emissions (specifically directCO2consumption). We are reviewing our data collection systems and will resume reporting this data between operations. Efforts to normalize the reporting of all disclosed environmental data so as to provide a better overall indication of progress and comparison between operations is ongoing. The tables that follow represent the Group’s performance with regard to key consumables (timber is not material within the international operations and Cerro Corona is not included as it is not operated for a full 12 months.
Keyconsumables:
Incidents Wecontinue to report environmental incidents in accordance with our incident reporting system. This system allows for the reporting of incidents from level 1 through 5 which is dictated by the severity of the incident. These levels are defined as:
In keeping with the principles of materiality, Gold Fields is reporting level two incidents and above. Level 1 incidents are of a minor and administrative nature only. The table below reflects the incidents for the reporting period:
Unfortunately there were seven level three incidents during the reporting period. The table below provides detail on the nature of the incidents as well ascorrective actions taken. It should be noted that there have been zerocyanide related incidents.
At the South African operations, routine water monitoring (including water sampling and bio-monitoring, which are typically done in structures like the bio-monitoring dams shown in the picture overleaf) was performed at strategic areas on different mines to determine water quality for both surface and underground water throughout the year. Water sampling results conducted to check levels of pollutants in Gold Fields water circuits revealed a trend similar to that of the previous year, which was within the limits set in the current water permits. Similarly, bio-monitoring conducted to identify any potential environmental impacts to biological species due to mine water discharges indicated that the surface water conditions were able to support the desired level of biodiversity. Of the four South African operations, only one (Kloof) has been issued with a new water use licence. Driefontein has received a draft water use licence, while the Regulators have indicated that South Deep’s draft licence is imminent. Beatrix is in a unique situation in that it has received correspondence from its regulatory authority indicating that it was not necessary to apply for a water use licence. Despite this, a decision was made to proactively apply for a water use licence.conditions on the licences (i.e. both the final and the draft licences) are more stringent than the previous water permits.consequently, all operations are changing their systems to be in line with the new licence conditions, including those mines which are still awaiting their water use licences. It is worth mentioning that some conditions will take time (about two years) to implement as they necessitate physical changes in various mine engineering controls. During the year, Gold Fields developed and implemented acomprehensive new water strategy, utilising the best available technologies and proven best practices, to ensure that all water in all of the applicable water circuits complies with the national drinking water standards, and to ensure that water leaving Gold Fields’ properties has no adverse impact on people or the environment. In terms of issues related to water quality in the Wonderfonteinspruit (WFS), Gold Fields has continued, during the year, to engage proactively with all stakeholders in thecommunity of the WFS catchment Area, and played a leading role in the numerous public bodies and processes related to the WFS. As previously reported, Gold Fields established the Wonderfontien Action Group (WAG), which comprised inter alia, the gold mines in the area, the regulators, academic institutions and representatives of the community. The WAG had three stated objectives, these being to:
To date all three objectives have been met. The approach to water monitoring was successful and now needs to be rolled out in the catchment area. Furthermore, in order to ensure the continuation of the processes initiated by the WAG and to further increase the level of objectivity, it was decided to incorporate the function into the Water Management Forums in the form of a Mining Interest Group (MIG). This group, which currently includes other mining companies in the area, is a subset of the larger Forum and is functioning well and has remained involved with the issues at hand. In a parallel process of contributing towards finding an acceptable and practicable solution for the WFS, the Regulators have recently formed the Steering Committee for Remediation of Mining Related Radioactive contamination (SCRMRRC) that will be looking at radioactive contamination of water in the whole of South Africa. The Wonderfonteinspruit Catchment Area Technical Working Group was formed under the auspices of the SCRMRRC to look specifically at the WFS Catchment area. This technical working group is characterised by representation from the mining industry as well as the surrounding communities. The issue of total dissolved solids (TDS) exceeding licenceconditions at the tailings storage facility at Agnew was disclosed in our previous annual report. The focus with regard to this issue has been to rehabilitate the tailings storage facility as it is no longer in use. We have also launched an extensive investigation to better understand the source of the elevation of the TDS. At Cerro Corona, we have assigned costs toclosure actions with regard to water management. As part and parcel of our operations, we continue to refine our understanding of the mineralogy of the gold bearing deposit. This is achieved through a very comprehensive sampling and leach testing programme that seeks to ensure that we deal with sulphide bearing material appropriately and that closure actions are designed accordingly. The deposit doescontain material that has the potential to be acid generating, which explains the implementation of this comprehensive and proactive programme. Overseeing this entire process, we have procured the services of internationally recognised experts to serve on a review board that provides us with independent insight and review of all of our actions with regard to tailings material and waste rock. At Tarkwa, grade control drilling has indicated the presence of sulphuric material in one of our pits. We have designed a sampling programme, which integrates with our usual grade control drilling and seeks to ensure that we understand the extent of the sulphuric material and that the necessary actions are put in place to handle the material responsibly. Fortunately, the presence of such material is uncharacteristic at our Ghanaian operations.
1 Different reporting methodology used by previous owner, and therefore not reported in years prior to F2008.Cerro Corona not included as it has not operated for a full 12 month period. Energy andclimate change The implementation of the first phase of the Beatrix methane extraction project was temporarily suspended and a decision was made to first establish market interest and then to negotiate an offtake agreement prior to any further expenditure. Tenders were requested and a total of 22 offers received. Many of the offers extended well beyond the 2012 closure of the Kyoto Protocol and some extended to 2020. These tenders have been reviewed and the top three tenders selected. Negotiations to establish a draft termsheet werecompleted during July 2009.
At Kloof, a project design document (PDD) explaining the energy savings associated with the implementation of hard ice cooling replacing conventional cold water cooling systems at 3 shaft was completed with acalculated potential energy saving equivalent to an estimated 55,000certified Emission Reduction (CER)credits. The validation of the PDD is scheduled for early F2010. Two Project Initiation Notes (PIN) dealing with Voluntary Emission Reduction (VER)credits were prepared and submitted to TFS brokers in the United Kingdom to test the market. Response has been slow as the VER market has slowed down significantly as a result of the economic downturn. Additional projects identified include Project Ethos, energy savings associated with reduced waste rock hoisted and energy recovery and electricity generation as part of the Uranium Project associated with the sulphur roasting part of the project. Exclusivity agreements to further develop these potential projects are under review. The National Business Initiative’s (NBI)carbon Disclosure Project aims to act as an intermediary between large corporations and shareholders on all climate change related issues and requires us to update our submissions by end of May of each year. Our May 2008 submission was well received and we were ranked second in thecarbon intensive sector by the NBI. As part of our carbon footprint determinations, we have comparedcalendar years 2007 and 2008 on a like for like basis. This assessment uncovered the fact that our energy savings measures are bearing fruit with the total emissions reducing by some 290,000 tons year on year, which equates to a 4.5 percent reduction. Following the completion of the determination of our carbon footprint this year, we procured the services of an external service provider with expertise on the issue of climate change to assist us in the development of acarbon strategy. This work has commenced and will becompleted early in the new financial year. Beatrix Gold Mine has the highest methane emission rate of any gold mine in South Africa. Methane is a potent greenhouse gas of which the contribution to global warming and climate change is 21 times higher than that of carbon dioxide. To mitigate its global warming impact, a carbon credit project under the clean Development Mechanism (CDM) of the Kyoto Protocol has been registered to capture and destroy the methane emissions from the Beatrix mine. The methane will be captured at source and piped to surface along an extraction column. During phase one of the project the methane will be flared and, during a second phase, electricity will be generated by using reciprocating gas engines which will generate approximately 4MW of electrical power and which will be made available for use by the mine.carbon credits will be earned for both the destruction of the methane gas as well as for the production of electricity. This project has a number of benefits for the mine, being the mitigation of the global warming impact as well as the removal of approximately 49% of the total volume of methane gas from the general body of the air, thus reducing the methane related risk in the mine. There is furthermore a potential benefit in that the mine will generate an income through the trading of carbon credits whilst reducing its carbon footprint by approximately 25%. It will also assist in alleviating the energy shortage experienced within South Africa. This is the first project of its nature in the mining industry in South Africa. At the international operations, we have integrated all aspects ofclimatechange into our strategic planning exercise as well as into our Resources and Reserves Review that takes place on an annual basis. Furthermore, the issue of climate change is a fundamental consideration within our strategic management system that we have implemented for sustainable development. For the Australasia Region, wecontinue to submit the required information to the Australian Greenhouse Office. We also submitted our initial public and government reports in accordance with the Energy Efficiency Opportunities Act. The programme is targeted at organisations using in excess of 0.5PJ of energy per annum and works to encourage the implementation of efficiency measures. Our December 2008 submission identified a total of 96 projects, representing savings of some 96,000GJ or 8.8 percent of total energy usage. Specificallyconsidering F2009, between the St Ives and Agnew mine sites, a total of 21 of these projects were considered, with an overall implementation capitalcost of A$8.3 million and an annual payback of A$1.8 million. The progress on energy efficiency projects has been greatly assisted by the appointment of energy officers at both St Ives and Agnew, which has lever aged off the existing continuous improvement systems. A large focus in Australia has been the release of draft legislation for the carbon Pollution Reduction Scheme (CPRS) in May 2009. This legislation is now planned to commence 1 July 2011. ThecPRS is currently designed as acap and Trade scheme, whereby acarbon permit will be required for each tonne ofCO2 equivalent emitted, with the price fixed in the first year at $A10/tonneCO2, after which thecap is lifted to A$40/tonneCO2. Gold Fields Australia has formed part of a gold industry collective,constituting approximately 80 percent of Australia’s gold production, which submitted an application to the government to be included as one of the industries to obtain a proportion of freecarbon permits under the scheme. Free carbon credits can be issued if the industry complies with certain requirements under the scheme. The CPRS scheme will allow the import of certain carbon units. This allows us to look to the global platform on which we operate for opportunities. Renewable energy options to supplement gas fired power were also progressed for the Australian operations, with a wind resource survey to be commissioned on Lake Lefroy at St Ives and solar power options covering the TSF2 area progressed at Agnew. We intend to make use of recently announced government incentive programmes to assist progression of these projects. In Ghana, a South African basedcompany, Powertech IST Otokon,completed energy efficiency workshops and project evaluations for the Tarkwa and Damang operations during January 2009. The resultant report for the Tarkwa minecontains a total of 23 projects, of which 10 are viable based on initial estimates. These projects account for predicted annual savings of 32,500GJ. Final reports for the Damang mine are expected in early F2010. In addition to this, the option of using locally produced biodiesel, mixed with standard diesel and back-up power supply options for the Tarkwa CIL plant, are being evaluated. Longer-term gas fired power options, possibly through a gold industryconsortium, will be explored further in F2010. Energy saving requirements and alternative technologies are also included in thecurrent fuel and lubricants tender process thatcovers both the Australian and Ghanaian operations. The following tables report the Group’s performance with respect to energyconsumption.
Energyconsumption
Land management and biodiversity The South African operations are represented on the South African Mining and Biodiversity Forum (SAMBF). The SAMBF was established in 2005 to provide a platform for cross-sectoral interaction and co-operation in order to improve biodiversity conservation and management in the mining sector. A review status report on biodiversity management that was recently published, identified the need for a guideline document specific to the South African mining sector. The SAMBF hascompiled draft guidelines incorporating local biodiversity information and best practices specific to South Africa. During the year the operations have focused on biodiversity assessments around sensitive areas which included caves and sinkholes. In our last annual report we provided an overview of the Leadership for conservation in Africa (LCA). The initiative, of which Gold Fields was the founding sponsor, seeks to pursue socio-economic development through conservation on the African continent. Ghana is very active within the LCA and considering our footprint in the country, we are actively supporting conservation bodies within the country. In partnership with the Ghanaian government, we are leading a potential project on the Cape coast of Ghana that will contribute to the conservation of biodiversity and socio-economic benefits to local communities. As mentioned previously, in accordance with our environmental framework, we are in the process of developing a biodiversity practice guide that aims to provide the operations with practical guidance with regard to the management of biodiversity. This practice guide has been drafted and is currently subject to internal review. Closure As per our requirements in the closure practice guide, we have again reviewed our closure costs for all Regions. These costs are reflected in the table below:
These costs are before accounting adjustments, which include compounding and discounting the above amounts at appropriate rates. As at 30 June 2009, the accounting value was R2,267.9 million. Waste management Waste management remains an area of focus in our environmental management systems. We have protocols in place to ensure that waste is dealt with effectively and responsibly and that recycling opportunities are realised and maximised. Our environmental management systems require that any employee that may impact on the environment by virtue of their activities, undergo the necessary training. Our systems utilise two forms of training, these being awareness and competence training. The requirement for awareness training is satisfied through our induction programmes where employees returning from annual leave, new employees, and contractors, are exposed to varying levels of environmental training. Competency training is more specific and requires detailed training for specific tasks. Records are kept of all environmental training. Relevant employees are required to undergo training as to the requirements of the waste protocols to ensure that all waste is handled responsibly and disposed of in accordance with procedural arrangements. Such protocols typically include potentially hazardous waste, domestic waste and recyclable waste. TThe greatest stream of waste from our operations is tailings material. Intensive systems have been implemented for tailings management and have been integrated into the environmental management systems and therefore tailings facilities are covered by our ISO14001 certifications and procedural arrangements where applicable, with the prime intent of managing any associated potential impacts. Furthermore, our tailings facilities are governed under our commitment to the Cyanide Code and as such are integrated into our environmental management systems. Generally, tailings management can be broken down into three areas. These are:
Governing all of the above are the necessary procedures required in terms of our ISO14001 certification. At Cerro Corona, we have implemented an advisory committee consisting of external experts to review all aspects of tailings dam construction and management. This committee was created to ensure best practice and to provide insight into leading practice from around the globe. Activities that are reviewed by this advisory committee range from construction to tailings placement to water quality and quantity. Waste management:
Cyanide management Gold Fields remains committed to the International Cyanide Management Code. Beatrix and South Deep have been certified with full compliance, while Driefontein and Kloof are substantially compliant. Plans are also in place to upgrade Driefontein and Kloof. Tarkwa and Damang have been certified with full compliance to the code and this has been maintained. In accordance with the audit protocol, St Ives and Agnew have progressed initiatives to upgrade their certification from substantially compliant to full compliance and are preparing for an audit on their commitments in the coming financial year. The Tarkwa closure provision has increased due to a higher footprint through the construction of the CIL plant, increase in the heap leach footprint, increase in tailings storage footprint and an increase due to pit shell design associated with a higher price, which increases the amount of pit and waste rock rehabilitation. The Damang provision has increased due to the commencement of mining at the Rex pit. The St Ives provision has increased as a result of inflation, but there is a relative decrease as a result of concurrent rehabilitation that was undertaken during the year. The Cerro Corona provision also increased in line with inflation as the design criteria have not changed nor has the footprint of the mine.
Fines and legal actions During F2009, no significant fines or non-compliance actions were levelled against the company.
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