CEO Interview: How renewable energy helps Gold Fields meet ESG obligations

In advance of his keynote presentation at the Energy and Mines Africa Virtual Summit on February 22, Gold Fields CEO, Chris Griffith outlines how one of the world's largest gold mining firms aims to reduce net carbon emissions by 50%. He also details how Gold Fields is now considered a leader in the use of renewables in mining projects.

Energy and Mines: How is Gold Fields’ focus on climate change and ESG driving energy decisions for your operations?

Chris Griffith: When Gold Fields started on its climate change journey in 2016, the key considerations were energy supply security and costs. In many of our remote mines it made sense to look for energy projects that are closer to the mine and reduce our dependence on the grid. At the same time costs of renewables were becoming more competitive and by now renewables are largely cheaper than coal or gas fired power.

But apart from costs and supply security factors, our impact on the changing climate was clearly a key consideration even back in 2016. Today it is undoubtedly a key driver as climate change is – in my view – one of the most defining societal challenges of our time with rising temperatures having a critical, damaging impact on the environment and populations around the world. The impact of climate change on our people, communities, and our operations is equally important and as such our focus on ESG now impacts all our operational decisions, with energy strategies an obvious focus.

In December last year – after a year of extensive research by all our mines – we committed to net emission reductions of 30% by 2030. Taking cognisance of the fact that we plan to raise our production profile over the same period, this translates to 50% absolute emission reductions by 2030. And – like many of our peers – we are targeting Net-Zero by 2050 as we are a signatory to the Paris Agreement.

E&M: What role do you see for renewable energy in supporting Gold Fields’ commitment to reduce scope 1 and 2 carbon emissions by 2030?

CG: Renewable energy projects have already contributed to our 10% absolute emission savings between 2016 and 2021, though the majority of these savings would have come from energy efficiency initiatives. During 2021 renewables accounted for about 5% in the Group energy mix from 1% in 2016. This is largely due to the two completed renewable microgrids at our Granny Smith and Agnew mines in Western Australia. Agnew is home to Australia’s largest hybrid renewable microgrid, and is first to power a mine with mainly wind-generated electricity. It delivers up to 50-60% of the mine’s energy needs. Up to 85% in good weather conditions.

How do we get to 30% net and 50% absolute emissions savings by 2030, given that approximately 2/3rd of our emissions are linked to our electricity usage, with the South Deep mine in South Africa by far the highest emitter in the company?

Firstly, we have a number of renewable energy projects currently being built or finalised: Our Gruyere mine in Western Australia will commission its microgrid later this quarter. And in South Africa we expect to have about a quarter of South Deep’s power provided by a 50 MW solar plant later this year. Apart from delivering significant cost savings it will achieve emission savings of 109kt CO2. Also planned is a 10 MW solar plant at Salares Norte in Chile to be commissioned when the mine is scheduled to start operating in Q1 2024

In total and in line with our emission profile, two-thirds of our planned 2030 reductions will come from the introduction of green energy sources with the focus on replacing our gas and coal-fired electricity with renewables. The other third in emission savings will come from further operational energy efficiency initiatives as well as gradually replacing our diesel powered fleet with electric, zero emission vehicles. By 2030 we envision that renewables will account for about 70% of the Group energy mix and by 2050 this will obviously have to be 100%.

E&M: How are investors and major customers responding to Gold Fields’ updated ESG targets and progress with renewable energy?

CG: I believe that Gold Fields is considered a leader in adopting renewables in the mining industry by many stakeholders, having embarked on this journey in 2016 and given the high public profile of our projects to date, particularly the Agnew microgrid in WA. For ESG investors a commitment to green energies and ambitious emission reduction targets are a must if they are even to consider investing in a company. This approach is increasingly being adopted by mainstream investors as well; as such our ESG targets and investments in renewable projects have ensured that we are on the right track. For the most part, ESG investors still stay away from the mining sector at large, but at least we do have the active support of our main shareholders through our ESG commitments.

“Building on our leading commitment to ESG” is one of our three new strategic pillars we announced in December and I believe this will further enhance our credentials with both ESG and mainstream investors and, of course, our existing shareholders and other stakeholders. We don’t have customers as our gold is sold directly to a small group of bullion banks. But we have seen that our focus on ESG is playing well with other key stakeholders, particularly our employees, who take pride working for a company that is doing its bit in battling climate change. Furthermore, in our recruitment drive we are finding that the younger millennials also respond well, given that we are considered an ESG leader in our sector.

Chris Grifitth’s keynote presentation, ESG, Climate and Energy Priorities and Strategies, takes place February 22nd 9:05 AM SAST.