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

7.2.4 Shared value: SED

We run substantial Socio-Economic Development (SED) programmes to ensure we deliver targeted, tangible and lasting benefits to those communities in the immediate vicinity of our operations – and in our labour- sending areas. This is in recognition that some of our largest Local Economic Contributions (e.g. payments to employees, government and suppliers) do not necessarily directly benefit our local communities or contribute to our social licence to operate at a local level – and in satisfaction of our Social and Labour Plans (SLP) in South Africa. Our approach is also driven by the need to make sure that our finite mineral deposits help generate enduring, mutually supporting social and economic development that continues delivering value to communities long after mine closure.

In 2012, we spent a total of US$136 million on a range of SED projects (2011: US$54 million).1 We place particular focus on project impact to ensure we maximise community benefits.

Figure 7.15: SED spend by region
(US$m – pre-unbundling)
  Figure 7.16: SED contributions
by type (US$m – pre-unbundling)
 

Local environmental impacts

As well as complying with applicable national environmental regulations and international standards around our own operational performance – we also contribute to the protection and conservation of the broader environments in which we operate. This is particularly the case where local communities rely on the land for their livelihoods or where there is a severe risk of degradation. Key examples include the following:

Ghana: We continue to support Leadership Conservation Africa (LCA) Ghana Chapter. This included funding for three ‘green’ accommodation tents at the LCA’s Shai Hills Reserve to help ‘kick-start’ and attract further sponsors for a sustainable tourism programme. The programme is aimed at securing a sustainable source of funding for conservation efforts at the Reserve.

Peru: We have a programme at Cerro Corona to reforest 1,000 acres of local land with native species and fast growing trees by 2016 – assisting with land stability, ground water retention, the provision of sustainable wood-fuel and the creation of economic opportunities around feed-stock for paper production. To date, over half the area planned has been reforested and the programme has benefited local community members significantly.

South Africa: Our Alien Vegetation Project at KDC aims to clear non- native, water-extracting species from our landholdings using local small- and medium-sized enterprises (SMEs), which employ local people who have been given formal training by Gold Fields. Cleared vegetation is then sold to a nearby company for its conversion into charcoal and the extraction of silicon. The programme employs 45 local people.

How is SED spending defined?
SED is defined as spend relating to projects that are:
  • Influential in benefiting employees and contractors beyond the core business
  • Influential in uplifting the communities and societies in our host countries
  • Guided by a strong development approach
  • Linked to infrastructure investment that benefits communities during operation and closure phases

Infrastructure

Some of the areas in which we operate are sorely lacking in terms of high-quality infrastructure. As a result, a proportion of our community contributions are aimed at transportation, utility, construction and other infrastructural projects, which we believe offer long-term community benefits and impact multipliers. Key examples include the following:

Ghana: We have (in partnership with the Ministry of Roads and Highways and the District Assembly) initiated a major US$2.3 million project to install an all-weather road between Samahu and Pepesa near Tarkwa. The road, which will be maintained by the public authorities, will benefit five communities along the route – or around 5,500 people.

During 2012, we also continued to implement the Small Town Water Supply (STWS) programme, focused on the construction of deep boreholes and overhead tanks in local communities. In 2012, we completed STWS projects worth a total of US$672,700 to supply clean, potable water to the communities of Tebe, New Atuabo, Brahabebom and Pepesa – benefiting around 10,400 people.

In addition, we constructed two sets of school buildings in the Subri and Bompieso communities near Damang. The schools, which are run by the Department of Education, benefits around 270 pupils.

Hilltop communities near Far Southeast, Philippines
Hilltop communities near Far Southeast, Philippines

During 2012, we commissioned a report by experts from the Kwame Nkrumah University of Science and Technology to assess our longstanding infrastructure contributions to communities around our Damang and Tarkwa mines. Amongst other things, this found general consensus among stakeholders (both within the local communities and local government) that Gold Fields had significantly improved access to quality infrastructure. The report notes “improved enrolment, standard of education among pupils, a reduction in morbidity, enhanced image of communities, increased productivity, among others”.

Peru: At the Chucapaca project, we are examining an innovative public/ private initiative to provide clean water to local communities in this high- altitude agricultural area. We plan to do so via a new 30 million cubic meter reservoir, that will also provide water to any future mining operation (p115).

South Africa: We constructed the R3.5 million (US$427,000) Simunye Health Centre near our KDC and South Deep mines. The clinic was transferred to the public authorities, which will remain responsible for its continued operation. The project is located in an area that is home to many Gold Fields and Sibanye Gold employees and contractors.

Online www.knust.edu.gh/pages

Education and training

Over time, our education and training initiatives not only help those individuals who have not found employment at our mines to pursue viable alternative options (p142), but also enhance the skills pools available to us at both local (i.e. community) and national level. As such, they are expected to deliver long-term benefits not only to our local stakeholders – but to Gold Fields itself. Key examples include the following:

Ghana: Collectively, we sponsored 50 community members through the Takoradi Technical Institute to train as engineers and geologists (2011: 23), provided 54 four-year community scholarships (2011: 32) and 145 new bursaries for local communities (2011: 110), enrolled 48 people onto our Community Apprenticeship Programme, and granted bursaries to dependants of 30 employees.

Peru: Our Cerro Corona mine has an ongoing, in-house operator and electro-mechanical training programme for community members. In 2012, 250 community members took part, helping them gain employment either at the mine itself or in the broader Peruvian industry (2011: 60). We also continue to sponsor the enhancement of local teaching through our ‘Successful Schools’ and ‘Teaching for the Future of the Hualgayoc District’ programmes.

South Africa: We provide a range of education and training programmes through our SLPs. This includes, for example: 131 bursaries to universities and technical colleges (2011: 96); 719 engineering and mining learnerships (2011: 605); sponsorship of the mining faculties of the University of the Witwatersrand (Wits) and the University of Johannesburg (p133).

In addition, the KDC mine also delivers ‘hands-on’ portable skills training in construction, plumbing, electrics, agriculture and other related skills to local community members via its on-site training facilities.

As part of the Gold Fields 2010 Black Economic Empowerment (BEE) transaction, the Company formed the South Deep Education Trust to receive a regular dividend flow from Gold Fields with the objective of carrying out educational activities in a non-profit manner and with an altruistic purpose. By the end of 2012 the Education Trust, which is managed by a Board of Trustees, had received R35 million (US$4.3 million) in dividends, of which R15 million (US$1.8 million) had been allocated. The remaining R20 million (US$2.4 million) will be allocated in due course.

Some of the key beneficiaries of the funds to date include:

  • Previously disadvantaged students, who have received scholarships to some of South Africa’s private sector schools – R5.7 million (US$0.7 million)
  • The Lapdesk charity, chaired by former Archbishop Desmond Tutu – R2.3 million (US$0.3 million)
  • The Letsema Circle organisation, which works in labour sending areas – R1.5 million (US$0.2 million)
  • The South African Legal Resources Centre – R1.5 million (US$0.2 million)
  • The University of the Western Cape – R1.6 million (US$0.2 million)
Case study: Completion of new library at Wits University marks Gold Fields support for South African engineering

Health and wellbeing

It is in recognition of the prevalence of relatively weak health indicators in the vicinity of some of our mines – as well as the interaction between local communities and our workforce – that a proportion of our community contributions are focused on improving local healthcare and behaviours. Key examples include the following:

Ghana: We carry out a range of community health initiatives at Damang and Tarkwa, including regular radio broadcasting on health issues, support for Community Health Facilitators and the establishment and support of community Water and Sanitation Committees.

In addition, the Tarkwa Mine Hospital provides general medical care to our employees at both Damang and Tarkwa – as well as up to six dependants per employee – giving more than 25,000 people access to high-quality medical care.

South Africa: We provide ongoing co-support (with Johns Hopkins University and the Bill & Melinda Gates Foundation) to three community HIV/ AIDS programmes, including the Westonaria Randfontein AIDS project, the Mothusimpilo project near KDC and the Lesedi Lechabile project near Beatrix. These provide peer education, presumptive periodic treatment and the treatment of Sexually Transmitted Infections – and in 2012 benefited around 180,000 people.

Economic diversification

GGiven the finite life of our mineral deposits – as well as the fact we are unlikely to meet all local employment demands – we place strong emphasis on working with communities and government to leverage the revenues generated by our operations to help foster a broader, sustainable and non-mining related economic base. Where possible, such efforts are supported by our community skills and training contributions (p146). Key examples include the following:

Ghana: We continued to support our longstanding Agribusiness Projects, which include the efficient cultivation and marketing of palm oil by local farmers. In 2012, the programme – carried out in partnership with the Ministry of Food and Agriculture – benefited 320 people.

Peru: We continued to build upon our long-term Milk Production Chain Programme. The programme aims to increase both the value and productivity of the local community’s livestock holdings through improved pasture, enhanced husbandry and more efficient milking processes. In 2012, around 250 people benefited from this programme.

South Africa: We have initiated (under KDC’s SLP (p149)) the vertically integrated ‘Agri-Hub’ programme to promote the production, processing and marketing of vegetables, poultry and pigs on Sibanye Gold-owned land by local people. In 2012, this (early stage) programme employed around 240 people directly and indirectly – a number that is expected to rise significantly over the medium term.

During 2012, Gold Fields had five agricultural and livestock programmes in the labour-sending areas of Eastern Cape and KwaZulu-Natal. The programmes provide agricultural and marketing support to local farmers, as well as animal husbandry services, products and training. In 2012, the programmes benefited around 9,800 people.