d all e picture and “send to back” Our Local Content Journey ALFRED BAKU Executive Vice President & Head of West Africa 12 June 2019
Gold Fields West Africa Region Two operating mines, Tarkwa & Damang; 45% stake in Asanko Gold Mine • Includes 45% of Asanko Gold from August – December 2018. • TFIFR – Total Recordable Injury Frequency Rate Injuries per 1 million hours worked, including employees and contractors. • Net cash flow – cash flow from operating activities, less net capital expenditure, environmental payments and finance lease payments. If growth capital is excluded the numbers in US$M would have been: 2017 – 179 & 2018 – 149. Gold Fields Local Content Strategy | Alfred Baku | 12 June 2019 2
25 Years in Ghana Our Journey| Alfred Baku | 12 June 2019 3
Tarkwa Spend Analysis Host Community Spend 1,200.00 Spend on Goods & Services Spend (US$ Million) 1,000.00 27% 432.33 12% 7% 800.00 362.94 2016 2017 2018 600.00 Percentage of In-country Spend 330.06 269.12 400.00 117.36 39.61 82% 84% 78% 200.00 255.43 22.44 69.39 326.86 60.94 71.43 - Foreign Procurement Spend Host Community Total Procurement (In Country) Spend Spend 2016 2017 2018 2016 2017 2018 *Spend from 2016 – Dec 2018 Our Journey | Alfred Baku | 12 June 2019 4
Damang Spend Analysis Spend on Goods & Services Host Community Spend 700.00 Spend (US$ Million) 600.00 40% 250.74 279.77 500.00 14% 8% 400.00 2016 2017 2018 112.07 300.00 206.21 Percentage of In-country Spend 31.67 229.50 10.90 200.00 90% 90% 108.29 82% 100.00 131.60 29.03 23.29 23.31 - Foreign Procurement Spend Host Community Total Procurement (In Country) Spend Spend 2016 2017 2018 2016 2017 2018 *Spend from 2016 – Dec 2018 Our Journey | Alfred Baku | 12 June 2019 5
Developing Key Local Suppliers (Genser) Aug 2015 – Phase 1 1 Jan 2018 – Phase 3 1 May 2019 – Phase 4 1 Aug 2019 – Phase 5 1 Jan 2017 – Phase 2 Commissioning Commissioning Commissioning Final approval Commissioning Damang mine - 27MW Tarkwa mine - 42MW NG gas pipeline to Tarkwa of PPA with control panel for Genser Tarkwa mine - 25MW Tarkwa rates and Damang mines island mode option 12US¢ / kWh Tarkwa Rates Tarkwa Rates for Tarkwa Power Damang rates 10US¢ / kWh 13.5US¢ / kWh Station Damang rates 16US¢ / kWh Damang rates 16US¢ / kWh 14US¢ / kWh Tarkwa mine – 42MW Power Station Damang mine – 27MW Power Station Damang Power Tarkwa Power Station – Island Station – Parallel Mode with Grid A World Class Mine Gas pipeline route to Tarkwa and Damang Length -73km Work Pressure - 165bar NG Temp - 23ºC Our Journey | Alfred Baku | 12 June 2019 6
Developing Key Local Suppliers (ZEN Petroleum) Fuel Depot Zen now supplies other major mines. Expanded its footprint across West Africa. 2018 Construction of 5 million litre world-class fuel farm with multiple satellite fuel depots at Tarkwa 2012 mine. Contract awarded to Zen Petroleum. Fuel supply to Tarkwa & Damang. Our Journey | Alfred Baku | 12 June 2019 7
Developing Key Local Suppliers (Contract Mining) 2017 Contract Award 2016 Contract Award Tailing Storage Facility Mining satellite pits – Damang (TSF) 5 at the Tarkwa Mine Reinvestment Project 2018 Contract Award 2017 Contract Tarkwa mine Far East Tailings Storage Facility (FETSF) Damang mine Our Journey | Alfred Baku | 12 June 2019 8
Developing Host Community Contractors 33-km Tarkwa-Damang road constructed by three host community companies: Wilhelm Jesus Open Doors Catrol Rehabilitated road Road before rehabilitation 33km Asphalt US$27M invested Our Journey | Alfred Baku | 12 June 2019 9
Capacity Building of Local Suppliers Next Steps 3 Lowering interest GFG Support 2 rates Collaboration with Setting up local banks to offer supply manufacturing plants chain financing 1 Key Challenges solutions to contractors Access to cheaper sources of funding Supplier development programmes: Lack of expertise • To understand the complexities and demands of the mining industry • Annual GFG Suppliers conference to share best practices Knowledge transfer: • External suppliers share expertise with local vendors Our Journey | Alfred Baku | 12 June 2019 10
Expatriate Localisation Localisation compliance currently at 3.6%; below the legislated 6%. One expatriate position expected to be localised by end of 2019. This will reduce the number to 14. Further reduction from 39 to 15 by 2018. Significant reduction of expatriates from 73 to 39 by 2015. Localisation plan approved in 2012 with 73 expatriate employees. Our Journey | Alfred Baku | 12 June 2019 11
Host Community Employment 71 % Supplier Jobs, Others, 1,998 545 Non-Mining Jobs, Host Business Partner Community 526 Employees, 3,414 Jobs, 5,003 GFG Employees, 518 Our Journey | Alfred Baku | 12 June 2019 12
Social Investments Community development is central to our business Gives us social license to operate Gold Fields Ghana Foundation development framework Focuses on five thematic areas: US$60M invested in community 01 Education dev’t projects & programmes since 2005 02 Health Agriculture 03 US$1/oz + 1.5% pre-tax profit 04 Infrastructure Water & Sanitation 05 • GFG contribution to the Foundation Our Journey | Alfred Baku | 12 June 2019 13
Shared Value Projects (Sports Stadium & Hospital) Tarkwa Sports Stadium ● 10,400 roofed seating (currently seats 400 spectators) ● Dressing rooms for players and officials ● Press box and press conference area ● Fenced FIFA standard pitch ● Disabled access ● Wash rooms ● Floodlights, electronic scoreboard, standby generator Apinto Government Hospital ● New Medical Hub; Accident and Emergency Centre ● Intensive Care Unit ● Renovation of existing OPD and theater ● Ambulance ● X-ray, autoclaves, ultrasound and ABG equipment ● New beds, tables and trolleys Estimated project cost: GHs100M Our Journey | Alfred Baku | 12 June 2019 14
Shared Value Projects (Youth in Horticulture Production) Five-year programme; started in 2016 To create non-mining jobs for host community youths To enhance livelihoods Buyers & off-takers sourced YouHop beneficiary on his cabbage farm ACTUAL TARGETED Extension officers engaged 900 900 750 Credit union to provide financial support to 700 farmers 526 536 541 498 Collaboration between GFG and GIZ; US$546.730 invested over the past 3 years Programme on tract to achieve all objectives by New Jobs Created Increased Income Improved Working YouHoP Beneficiaries end 2020 Conditions as at Dec. 2018 YouHop programme status Our Journey | Alfred Baku | 12 June 2019 15
ag Thank you
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