5.2.4 Mine closure

The total gross mine closure liability for Gold Fields has decreased by 10% from US$391 million in 2014 to $353 million in 2015. This decrease can be attributed to a range of factors including:

  • Significantly weaker Australian Dollar and South African Rand exchange rates against the US Dollar. In Rand terms, the South Deep estimate increased by 17%, however, with the conversion to US Dollars, the amount shows a 10% reduction against the prior year
  • For Gold Fields Australia, in addition to the decrease resulting from the conversion of Australian Dollars to US Dollars, the final closure cost shows a drop of A$5.6 million as a result of obtaining approval from the regulator to combine the Agnew and Lawlers closure plans
  • A significant decrease at Cerro Corona Mine (US$6 million), which resulted from a change in methodology for closing the tailings facility

The funding methods used in each region to make provision for the mine closure cost estimates are:

  • Ghana – reclamation bonds underwritten by banks and restricted cash
  • South Africa – contributions into environmental trust funds and guarantees
  • Australia – existing cash resources
  • Peru – bank guarantees

Going forward, Gold Fields is planning to further enhance its integrated approach to mine closure management with a focus on social closure and post-closure water management. The programme is currently being developed and implementation is scheduled for 2016 and 2017.

The percentage contribution to the total gross closure liability per region as well as the percentage secured through the above-listed mechanisms for 2015 are:

Region % of Group   Total (US$)   Amount
secured (US$) 		   % secured  
Australia1 53%   186,007,171   0   0%1  
South Africa 8%   28,959,039   28,959,039   100%  
West Africa 26%   91,519,303   64,117,934   70%  
Americas 13%   46,663,873   20,998,743   38%  
Totals 100%   353,149,387   114,075,716   29%  

1 Due to legislative changes in Western Australia that came into effect in July 2014, there is no longer a legal obligation to have unconditional performance bonds in place for mine closure liabilities. Companies are now required to pay a levy to the state based on the total mine closure liability. This levy is 1% of the total liability per mine, paid annually. This levy goes into a state administered fund known as the Mine Rehabilitation Fund and is similar to the US Superfund where monies and interest from the fund will be used to rehabilitate legacy sites or sites that have prematurely closed or been abandoned. Company specific liabilities for active mines are therefore unfunded