Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

1.3.1 Separation of mining portfolio

The reorganisation formally separated Gold Fields mines into two distinct portfolios:

  • The open pit and shallow underground mines in Australia, Ghana and Peru – as well as the deep underground mechanised South Deep mine in South Africa. These continue to be held by Gold Fields – along with all Growth and International Projects assets
  • The mature, deep underground, narrow-vein Beatrix and KDC mines in South Africa, which are now held by Sibanye Gold

These two portfolios had hitherto been managed as part of a single corporate group.

During the second half of 2012 the Group engaged in a comprehensive analysis of Gold Fields operating model and the assets in the portfolio – both producing mines and growth projects. This was in response to the ongoing underperformance of the gold industry, including Gold Fields, when measured against the higher gold price and was driven by Gold Fields commitment to enhancing shareholder returns through:

  • Improved leverage to the price of gold
  • Enhanced focus on cash flow generation
  • Increased emphasis on the delivery of dividends

It was found that both portfolios would benefit from more focused and dedicated executive management (accountable to separate Boards of Directors), whilst also being freed from competing funding and management demands. This was on the basis that these two distinct mine portfolios:

  • Are at different stages of their lifecycles
  • Require different mining methods, mining skills and mining technology
  • Have competing capital requirements

The separation of Gold Fields and Sibanye Gold did not result in any significant job losses or changes to conditions of employment.