Slide 1: Gold for Development
Gold for Development Nick Holland, Chief Executive Officer Mining Indaba 2012, Cape Town
Slide 2: Why does development matter?
Why does development matter? Access to licences Social licence / Op. continuity Enhanced operating environment Sustainable Business Development Sustainability Political engagement Access to financing Attraction/retention of skills 2
Slide 3: Risk trends in the external environment
Risk trends in the external environment Many external risks facing the mining sector relate to, or could be mitigated by development Political risks Dozens killed, more than 100 missing in landslide at Philippines gold mine Social risks January 2012 Energy risks Water risks Protests over New
Slide 4: Gold Fields Risk Register
Gold Fields Risk Register Sustainable Development has the potential to mitigate 5 of our Top 10 Risks 4
Slide 5: Resource nationalism and loss of social licence
Resource nationalism and loss of social licence Deloitte‟s „Tracking the Trends‟ report notes the key dynamics for mining in 2012: The battle to keep profits in the face of resource nationalism (3rd of 10) Restless stakeholders and demand for heightened CSR (4th of 10) Ernst & Young‟s „Business
Slide 6: Geography of resource nationalism
Geography of resource nationalism A dynamic social and political landscape – and the sector needs to keep pace… 6
Slide 7: Increased fiscal demands
Increased fiscal demands Demands a development-based response that speaks directly to voter and government frustrations and concerns… South Africa Ghana Australia Peru ANC exploring Government “Mineral Resource New mining tax different royalties increased Rent Tax” on coal regime approved in
Slide 8: Capital investment and risk
Capital investment and risk Capital providers Reduced risk profile Capital project Social licence Returns Production Development Revenues and SED contributions 8
Slide 9: The economic contribution of mining
The economic contribution of mining Payments to governments Salaries and Socio-Economic benefits Development Profitability Spending Procurement and Payments to contracting capital providers 9
Slide 10: Economic contributions
Economic contributions Gold Fields Group Gold Fields South Africa Gold Fields Ghana Revenue: R39.5 bn1 Revenue: R18.4 bn1 Revenue: US$1.5 bn1 Sales Sales Sales Salaries Procurement Salaries Procurement Salaries Procurement Capital Taxes Capital Taxes Capital Taxes SED Capex/Exploration SED Capex/Exp
Slide 11: Conditions for success
Conditions for success These monies can have a significant impact on sustainable development, but this is highly reliant upon: • Employment of local people • Local procurement • Sustainable Social Economic Development (SED) projects • Proper government disposal of revenues 11
Slide 12: WGC research: Economic contributions in Peru
WGC research: Economic contributions in Peru Peru Mining made up 60% or US$16.3bn of exports in 2009 In 2008, formal mining accounted for 1.2% of jobs compared to 40% for agriculture – but a higher multiplier effect At its peak (2007), mining accounted for 25% of government revenues Four WGC ‘
Slide 13: Example: Building 'Capital' at Cerro Corona
Example: Building „Capital‟ at Cerro Corona Context SD response • Mountainous (c. 4000m elevation) • Poor (39% extreme poverty) • Key „internationalisation‟ project • Little infrastructure • Subsistence farming • Sustainable mine „showcase‟ • Water and land impacts from 22 • Integrated approach to S
Slide 14: Example: Building 'Capital' at Cerro Corona
Example: Building „Capital‟ at Cerro Corona Targeted local employment (initial commitment of 150 – actual: 470) Economic Capacity-building/financial subsidies for local companies (65 active) Capital Milk Production Chain project to boost pasture, herds, processing, etc. Partnerships with loc
Slide 15: Optimising impacts: The ASM opportunity?
Optimising impacts: The ASM opportunity? 100m people depend on ASM for survival 10m -15m active miners producing 2-300 tonnes of gold c.10% of global gold production – but 90% of the workforce Fairtrade/Alliance for Responsible Mining, 2011 But often assumed to be undesirable by governments and comp
Slide 16: Optimising impacts: The sector contribution
Optimising impacts: The sector contribution The industry is already working on a number of fronts – both individually and collectively - to address sustainable development. Noteworthy examples include: The ICMM The World Gold Council Local Chambers of Mines But what is already being done Is
Slide 17: Demonstrating impacts: Sector opportunities
Demonstrating impacts: Sector opportunities Need for the convincing measurement of total impact Direct economic ‘Intangible’ Indirect impacts Multipliers contributions contributions (dependants, (broader, holistic (skills transfer, public (enterprise develop., secondary measures) services) secondary
Slide 18: Thank You
Thank You CBE Fievos