JSE- and NYSE-listed Gold Fields last week released its inaugural climate-related financial disclosure (CFD) report for 2018.

The company is the first mining company in South Africa to publicly endorse the Financial Services Board’s Task Force on CFD, which is an industry-led, voluntary disclosure platform developed as a partnership between industry and financial institutions, investors and stock exchanges.

So far, about 800 organisations and 400 investor groups worldwide are supporting it.

Gold Fields CEO Nick Holland said during a media presentation that the decision to publish a climate change cost report came on the back of engagements with environmental, social and governance (ESG) investors, who regard ESG issues as increasingly important.

Of the top 12 issues that the company is managing, four are directly related to ESG-type factors.

“The management of climate change impacts and our transition to a low-carbon environment is a key component of environmental stewardship at all our operations and projects. Compared to other metals, such as steel, coal and aluminium, gold mining’s carbon-emission-intensity-per-unit value is among the lowest in the sector.

However, as a mining business, Gold Fields is cognisant of the fact that we have a material impact on the surrounding environment and the communities with whom we share this environment.”

He added that the company was starting to understand the cost of inaction and the importance of including climate scenarios in its long-term planning.

Internally, Gold Fields recently reviewed and updated a number of policy statements and guidelines, reflecting its environmental priorities. They cover the areas of responsibility in the company, including energy and carbon management, environmental management, water management, tailings management, mine closure and climate change.

Gold Fields’ carbon emissions are primarily from diesel consumed by haulage trucks and electricity consumption in mining and gold processing.

“Energy has become a proxy for us in addressing our carbon footprint and reducing our emissions,” said Holland.

The company spent $302-million on energy in 2018, which is 22% of its operational expenditure and 15% of its all-in sustaining costs.

In South Africa, the company forecasts that energy costs will continue to increase, as will grid unreliability, and Gold Fields is therefore planning on installing a 40 MW solar farm at the South Deep gold mine.

Gold Fields recently commissioned a 4 MW solar farm at its Agnew mine, in Australia, and is building a 7 MW solar gas plant at the Granny Smith gold mine, in Australia. Holland highlighted that 10% of the energy mix at the Australian operations would consist of renewables in 2020.

The company consumed 11 629 TJ of energy in 2018, mostly for diesel haulage, at 54%; electricity and gas, at 26%; coal, at almost 12%; and hydropower, at 3.7%.

Gold Fields was moving towards switching from diesel to gas power for fuel at the Australian operations, with help from a 275-km-long underground gas pipeline.

To date, the company had installed about 150 MW of gas engines or turbines across its existing operations in South Africa, Ghana, Peru and Australia, while a further 18 MW of wind power and 6 MW of battery storage were under construction at Agnew.

Gold Fields aims to reduce its cumulative emissions by 800 000 t of carbon dioxide equivalent emissions per ounce between 2017 and 2020.

Gold Fields also highlighted its strategy related to water use, which included closed-loop systems, retreating water and using a more catchment-based approach.

In 2018, water withdrawal across Gold Fields’ operations totalled 21.2 G ℓ.

The company’s total water use comprised 66% recycled or reused water last year, owing to $32-million spent on water reuse and ancillary infrastructure.

The company is also managing its climate- related risks, which, in particular, consider severe weather events in the company’s operating regions, emerging regulations and taxes, and managing investor expectations to reduce emissions.

“We have to ensure that our business will not be interrupted by these adverse conditions, while protecting people against impacts,” Holland pointed out.

In Australia, the company remained prepared for the mitigation of the impact of severe floods and the declining availability of water, as well as surface temperature rises and its effect on thermal equipment performance and cooling costs.

In Ghana, the company was aligning its strategy to deal with increased dewatering and maintenance costs, heat stress on mine employees and droughts affecting long-term availability of grid power.

In Peru, Gold Fields was mitigating against water shortages in the dry season and limited capacity to send concentrate to port, owing to severe weather events. This region was also at risk of mudslides and rockfalls.

In South Africa, the company highlighted rainfall intensity variables as the biggest risk, which increase operational costs for alternative water sources, as well as temperature increases and climate change-related regulatory uncertainty.

Holland noted that the most significant social development project area was the concept of local procurement and local employment; by buying goods locally, the mine could have a direct impact on people in the area.

The company spent $686-million on host communities last year, representing 25% of total spend.

Gold Fields aims to sustain its host community procurement spend at between 23% and 25% and to maintain host community employment at between 54% and 56%.

Holland said the company had started looking at progressive rehabilitation before a mine reaches the end of its life.

The company had an advanced focus on progressive rehabilitation, which built credibility with regulators and stakeholders, while reducing closure liabilities.

ts total mine closure cost was planned at $400-million, with $178-million budgeted for the Australian region, $100-million for Ghana, $79-million for the Americas and $42-million for South Africa.