Connect with us:
Our vision is to be the global leader in sustainable gold mining

Risk Management and Materiality

Gold Fields uses a set of four well-defined processes to assess its risks, opportunities and material issues:

  •  Key risks and mitigating actions are identified and assessed using an Enterprise-wide Risk Management (ERM) process as well as the risk management requirements of South Africa’s King IV governance code.
  •  The Group takes into account the views and concerns of a wide range of stakeholders
  •  As part of the integrated reporting process, the Group conducts comprehensive interviews with key management and external stakeholders
  •  Material sustainability issues are assessed and prioritised according to the Global Reporting Initiative (GRI) G4 Guidelines

The outputs from these four processes have informed the identification of the risks, opportunities and material issues listed on this page.

Risk management

Gold Fields’ mature ERM process is aligned with the ISO 31000 international risk management standard, as well as the risk management requirements of South Africa’s King IV governance code.

The Group risk heat maps can be viewed on our latest Integrated Report 2016:

  • The Group’s top 10 risks as well as top five risks per region, as identified through the ERM process (i.e. the Group’s top strategic and operational risks at the end of 2016
  • Key mitigating strategies to avoid and/or mitigate the top 10 Group risks for 2016, and the top five risks per region
  • Key movements in the top 10 Group risks between 2015 and 2016

Materiality assessment

Gold Fields has carried out a formal process to assess and prioritise its material sustainability issues. It has done so using criteria aligned with those set out in the GRI G4 Guidelines taking into account the actual or potential impact of these issues on Gold Fields and its stakeholders

The process is based on a series of iterative assessments using a common, quantitative scoring framework. It draws on a range of internal and external sources, as well as detailed engagement with senior executives at the Company and representatives of external stakeholders – including industry, government, community and environmental organisations. These stakeholders were briefed on the GRI process and asked to evaluate all G4 aspects in terms of importance to Gold Fields and its stakeholders.

The outcome – depicted in the Integrated Annual Report – ranks health and safety, water management, environmental and compliance issues as the key GRI aspects that internal and external stakeholders consider most material to Gold Fields and its wider stakeholder base.

Risk appetite and tolerance

The groups appetite for risk is reflected in the Gold Fields’ strategy, DNA and Group Scorecard.

Gold Fields’ risk appetite is defined as the amount of risk the Company is willing to take in pursuit of our strategic objectives and the amount of risk we are capable of taking considering our financial and operational capabilities.

Our risk management motto of “making it less risky to take risk” implies that we have precise and effective risk mitigating strategies to continually reduce risk to an acceptable level. We believe we are inherently more risk averse than many of our peers.

Risk tolerance levels are set in each of our major risk areas aligned to the Group Scorecard, such as safety and health, production, growth and productivity, environment, human resources as well as our legal and social licences to operate.

Risk appetite and tolerance levels are reviewed by management and adjusted annually as part of our risk management plan, after which they are reviewed and approved by the Board. Management’s mandate is to take risks only if they fall within these tolerance levels.

Below is an extract from the Risk management plan for 2016 indicating a few of the risk appetite and tolerance levels.

RISK APPETITE AND TOLERANCE LEVELS

RISK APPETITE AND TOLERANCE LEVELS

Risk Appetite legend – describing the colour coding

Risk Appetite legend – describing the colour coding

Insurance and operational risk management

The risk and insurance functions in Gold Fields are integrated. The IMIU (International Mining Industry Underwriters) insurance survey programme has proved to be very successful over the years, yielding excellent results in terms of improving the insurability ratings, insurance premiums and ultimately preventing catastrophic losses and insurance claims.

The outcome of all the effort by management is a 16-year claims free history on the property insurance policy.

All our operations are now regarded as “relatively attractive to insurers” and placed in the “green or low risk” zone of the IMIU insurability index as indicated on the IMIU Insurability Rating graphs(orange graphs).

In terms of the Increasing Rank of Excellence graphs (blue graphs) all Gold Fields operations are ranked in the top quartile of mines audited by IMIU.

The IMIU process is integrated with our operational risk management and business planning processes.

IMIU insurability rating

The left axis - %RR represents the extent to which operations are:

  • Implementing global leading practices and
  • Responding to the recommendations made by insurers.

The %RR measures the mine’s flexibility, spare capacity and contingent readiness in terms of fixed infrastructure, machinery and equipment.

The bottom axis – REN is the ratio between the mines insured values and Maximum Foreseeable Loss. The lower the REN the less risky the mine is from an insurability perspective.


IMIU Insurability and Rank of Excellence rating for Gold Fields 8 mines

1.  South Africa
South Deep (Last audit in March 2017)

Insurability index 2010 2012 2015 2017 Global Average 2016  
Risk Reductions (%RR) 81% 81.6% 81% 81% 77.1%  
Risk Exposure Number (REN) 21 51 31.7 18.3 43.6  

  • Insurability index
  • Increasing rank of excellence

2.  Peru
Cerro Corona (Last audit in February 2017)

Insurability index 2011 2014 2015 2016 2017 Global Average 2016  
Risk Reductions (%RR) 82.1 82.2% 82.1% 82.3% 82.3% 77.1%  
Risk Exposure Number (REN) 14 10.8 11.8 11.7 14.9 43.6  

  • Insurability index
  • Increasing rank of excellence

3.  Australia
Granny Smith (Last audited in August 2016)

Insurability index 2011 2014 2015 2016 Global Average 2016  
Risk Reductions (%RR) 79.1% 79.9% 80.5% 77.2%  
Risk Exposure Number (REN) 38.2 37.7 23.5 45.9  

  • Insurability index
  • Increasing rank of excellence

 Agnew (Last audited in August 2016)

Insurability index 2011 2014 2015 2016 Global Average 2016  
Risk Reductions (%RR) 80% 80% 80.8% 81.6% 77.2%  
Risk Exposure Number (REN) 26 23 22.4 27.3 45.9  

  • Insurability index
  • Increasing rank of excellence

 St Ives (Last audited in August 2016)

Insurability index 2011 2014 2015 2016 Global Average 2016  
Risk Reductions (%RR) 80% 84.6% 84.9% 84.8% 77.2%  
Risk Exposure Number (REN) 26 25.9 29.7 30.2 45.9  

  • Insurability index
  • Increasing rank of excellence

 Darlot (Last audited in August 2016)

Insurability index 2011 2014 2015 2016 Global Average 2016  
Risk Reductions (%RR) 78.9% 80% 80.1% 77.2%  
Risk Exposure Number (REN) 30.9 40.2 26.3 45.9  

  • Insurability index
  • Increasing rank of excellence

4. Ghana
Tarkwa (Last audited in February 2017)

Insurability index 2011 2014 2015 2017 Global Average 2017  
Risk Reductions (%RR) 76.5% 78.5% 81% 82.4% 77.1%  
Risk Exposure Number (REN) 17 24.3 18.1 16.1 43.6  

  • Insurability index
  • Increasing rank of excellence

 Damang (Last audited in February 2017)

Insurability index 2011 2014 2015 2017 Global Average 2017  
Risk Reductions (%RR) 74.6% 76.6% 79.5% 79.6% 77.1%  
Risk Exposure Number (REN) 27 20.5 21.3 13.5 43.6  


  • Insurability index
  • Increasing rank of excellence