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

2.2 Operation: Beatrix

Introduction

The mature, deep underground Beatrix mine – which is located in the Free State – has been in production since 1985.

Strategic overview

Beatrix has typically offered steady, predictable production to the South Africa Region – complementing higher volume production from the larger KDC mine.

Mine shaft at Beatrix, South Africa
Mine shaft at Beatrix, South Africa

Performance overview

During 2012, total production fell to 288,700 ounces (2011: 346,800 ounces). As with KDC, this reflected the impact of unlawful and unprotected strike action during the third and fourth quarters.

Employees engaged in an unprotected strike lasting 23 days (24 September to 16 October) at the Beatrix North and South sections, and for 29 days (21 September to 18 October) at its Four Shaft West section. The full complement of strikers returned to work on 18 October – following an ultimatum given by management on 16 October. It is estimated that the mine lost 29,000 ounces in production as a result – mainly during the fourth quarter.

Additional challenges during the year included:

  • A decrease in underground mining yields, as a result of lower-grade areas currently being mined at the North and West sections
  • Ongoing internal and external unplanned safety stoppages (including the loss of 20,000 ounces in the second quarter)

Mechanised advancement of the development ends at our long life shafts at Beatrix continued throughout the year. This is aimed at:

  • Improving safety by removing employees from the face
  • Reducing development costs and improving productivity through enhanced operational efficiency
  • Increasing ore reserve flexibility through the acceleration of monthly development advance rates

In the third quarter, 98% of our flat-end development meters advanced at Beatrix’s long life shafts were completed by mechanised means. This means that the project has essentially been completed.

Although there was a temporary slowdown in development in the same quarter (due to the installation of a new Guard Communications System to improve tramming safety, the effect of the illegal strikes and additional safety stoppages), progress during the year was otherwise relatively strong.

Operating costs at Beatrix increased by 10% to R2.64 billion (US$322 million) due to:

  • Implementation of an effective 25% electricity tariff increase by state power utility Eskom with effect from April
  • The installation of additional mechanical support
  • Increased maintenance costs and general cost inflation
  • Annual wage increases

The impact of these factors was partially offset by reduced labour costs resulting from the illegal (and thus no-work, no-pay) nature of the strikes at the mine in September and October – as well as a range of cost-saving initiatives.

In 2012, the mine’s NCE margin decreased to 16% (2011: 25%). Capital expenditure totalled R658 million (US$80 million) and was primarily focused on ore reserve development and the upgrading of underground and surface infrastructure.

Key indicators

Category   2012   2011   2010   2009   2008  
Gold produced – attributable (kg)   8,981   10,787   11,715   12,443   12,696  
Gold produced – attributable (‘000oz)   289   347   377   400   408  
Total cash cost (R/kg)   294,277   220,073   194,406   169,847   142,045  
Total cash cost (US$/oz)   1,118   957   826   627   539  
Notional Cash Expenditure (NCE) (R/kg)   366,875   279,957   255,066   228,128   196,282  
Notional Cash Expenditure (NCE) (US$/oz)   1,393   1,206   1,084   842   745  
Gold price (R$/kg)   435,698   371,772   287,187   259,126   231,750  
Gold price (US$/oz)   1,655   1,602   1,220   956   879  
Operating profit (Rm)   1,276   1,602   1,026   1,021   1,052  
Operating costs (Rm)   2,637   2,409   2,339   2,203   1,891  
Operating margin (%)   33   40   30   32   36  
NCE margin (%)   16   25   11   12   15  
Fatal Injury Frequency Rate (FIFR)   0.25   0.19   0.18   0.10   0.08  
Lost Time Injury Frequency Rate (LTIFR)   3.54   2.95   3.31   3.92   4.74  
Energy consumption (TJ)   2,980   3,234   3,325   3,470   3,508  
C2O emissions (’000 tonnes) (Scope 1 & 2)1   736.5   798.6   845.3   901.8   892.8  
Water withdrawal (million liters)   10,006   10,226   10,834   14,866   16,678  

Figure 2.9: Growing Gold Fields indicators – Beatrix

Category   2012   % of Group total  
Attributable Mineral Resources (million oz)   8.43   5  
Attributable Mineral Reserves (million oz)   3.36   5  

Figure 2.10: Securing our future indicators – Beatrix

Category   2012   2011   2010   2009   2008  
Total employees   9,222   9,151   9,485   10,327   11,151  
Silicosis submissions (Rate per 1,000 employees)   0.85   n/a   n/a   n/a   n/a  
Employees on Highly-Active Anti-Retroviral                      
Treatment (HAART)   20.34   n/a   n/a   n/a   n/a  
Employee wages and benefits (Rm)   1,566   1,473   1,422   1,307   1,141  
Total taxation and royalties paid (Rm)   170   35   18   2   1  
SED spend (US$m)   232   6   n/a   n/a   n/a  

1 Excludes fugitive mine methane emissions
2 Higher figure reflects the inclusion of maintenance provisions and operating costs in 2012