ENERGISING THE MINE OF THE FUTUREoverendstudio.co.za/websites/gold-fields-corporate... · gas...

ENERGISING THE MINE OF THE FUTURE

TSAKANI MTHOMBENI10 December 2018

Energy & Mines Congress, Toronto

Presenter

Presentation Notes

Thank you to the Energy and Mines team for giving us a chance to reflect on our journey, share insights into what we think about mine of the future The picture comes from our Gruyere mine (JV) in Australia, WA

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Forward Looking statementsTerms of use

Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 andSection 21E of the US Securities Exchange Act of 1934.

In particular, the forward looking statements in this document include among others those relating to the Damang Exploration Target Statement; theFar Southeast Exploration Target Statement; commodity prices; demand for gold and other metals and minerals; interest rate expectations;exploration and production costs; levels of expected production; Gold Fields’ growth pipeline; levels and expected benefits of current and plannedcapital expenditures; future reserve, resource and other mineralisation levels; and the extent of cost efficiencies and savings to be achieved. Suchforward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results,performance or achievements of the company to be materially different from the future results, performance or achievements expressed or impliedby such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and politicalconditions in South Africa, Ghana, Australia, Peru and elsewhere; the ability to achieve anticipated efficiencies and other cost savings in connectionwith past and future acquisitions, exploration and development activities; decreases in the market price of gold and/or copper; hazards associatedwith underground and surface gold mining; labour disruptions; availability terms and deployment of capital or credit; changes in governmentregulations, particularly taxation and environmental regulations; and new legislation affecting mining and mineral rights; changes in exchange rates;currency devaluations; the availability and cost of raw and finished materials; the cost of energy and water; inflation and other macro-economicfactors, industrial action, temporary stoppages of mines for safety and unplanned maintenance reasons; and the impact of the AIDS and otheroccupational health risks experienced by Gold Fields’ employees.

These forward looking statements speak only as of the date of this document. Gold Fields undertakes no obligation to update publicly or release anyrevisions to these forward looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence ofunanticipated events.

Energising the mine of the future | Tsakani Mthombeni | December 2018

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Americas regionMine: Cerro Corona (Peru) Project: Salares Norte307koz10% of GFL total energy

Global Footprint

South Africa regionMine: South Deep281koz18% of GFL total energy

West Africa regionMines: Tarkwa and DamangJV project: Asanko Gold Mine810koz46% of GFL total energy

Gold Fields GroupEnergy usage 12 178 TJEnergy spend US$258m (17% of OPEX)

US$115/ounceCarbon emissions 0.66t CO₂-e/oz

Australia regionMines: St Ives, Granny Smith and AgnewJV Project: Gruyere935koz26% of GFL total energy


Presenter

Presentation Notes

We are mid-tier gold company, producing around 2mil Oz/year Spread over 4 regions

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Macro trends driving the disruption


Energy security: not business as usual

Turning energy in

mining risks into

opportunities

Technology trends (supply and demand side): renewables,

automation, big data, AI, storage, IoT

New business models and mining methods: design4repurpose

not closure, selective mining, dry processes

Environment and society: emerging regulations to drive

decarbonization, zero waste, host communities and jobs, GHG

reductions, the food/energy/water nexus

Presenter

Presentation Notes

Our industry is being disrupted, and new energy systems are becoming more commercially viable…hard to ignore Especially for mid-tier companies who, as price takers, need to survive More opportunities for miners to use clean energy, significantly reduce waste and create value for host communities and governments

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Energy security for minersThe energy security debate


Energy spend ~17% of OPEX (13% AISC) at Gold Fields

Global oil price volatility

Rising energy demand in mining (deeper, longer, harder, further, etc)

Transition from gas to renewables – reap dual benefits

Availability Reliability Affordability Low-carbon type

Presenter

Presentation Notes

All energy is from the sun, the transition is us finding ways to tap into sun energy more efficiently Energy transitions have been: from wood to coal, from coal to hydrocarbons, now from hydrocarbons to renewables Energy management in gold mining in particular, is very central to cost containment strategic infinitives, given that we are not a price taker For us, as a mid-tier gold mining company, energy cost containment is for survival

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How the industry and Gold Fields are respondingIncreasing leverage off innovation and technology


Increasing industry collaborations

Partnerships (OEM, IPPs, NGOs, Industry

Associations, etc)

Creating digitally enabled mines

• Involved in a number of OEM partnerships to pilot new technology

• Partnerships with global IPPs

• Adapting our assets to be digitally enabled

At Gold Fields:

Presenter

Presentation Notes

Fundamentally, the drivers remain the same: improved safety, productivity/throughout and cost containment Currently, we are seeing more collaborative platforms, across industries and sectors; more partnership (willingness to “learn fast” from others) and disrupting our industry embracing digital concepts Just in October, the ICMM launched the OEM collaboration initiative to: Reduce GG emission, “promote GHG free OC mines by 2040”; reduce DPM (2025) and promote collision avoidance technology by 2025. Our CEO, is an Advisory Board Member for the initiative (ISCV) The last few years have seen emergence and growth of captive PPAs

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Latest on captive PPAsThe rise and rise of captive PPAs

• Driven by need to hedge against grid price volatilities, emerging climate related regulations

• Commercial (retail and telecoms) sector leads the front

• Mining and materials are fast followers

• Key issue remain: • LoM uncertainty and the

PPA bankable tenure• ESI structure: regulated vs

unregulated markets


Presenter

Presentation Notes

Amazing how captive PPAs have gained momentum, in just under 10 years…..>400% growth Latest BNEF report, Facebook, AT&T, Microsoft, T-Mobile, Google; then Walmart, Nike (BNEF July 2018)… Miners have traditionally been slow in the past, but are fast followers, same applies to energy

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Implementing an integrated energy and carbon management strategy


What Gold Fields has been doing

2020 aspirational goals:

costs savings, carbon footprint

reduction and business integration

Strengthen energy security

Improve energy costs

Reduce carbon emissions

(and adapting to Climate-related risks

– operations and host communities)

Integrate energy management into

business (ISO 50001 ready)

Presenter

Presentation Notes

Our Energy Management journey: 2013 2016: foundational phases consolidated; 2016 – 2020: integrated into business and delivery cost savings We’ve seen our energy security risks shifting out of the Group Top 10 Responding to post Paris Agreement implications (language has generally shifted: from energy efficiency to carbon emissions, now climate change mitigation) Our Granny Smith Mine in Australia still selling carbon credits to the Australian government ICMM – Environmental and Climate Change active member, CEO also on the Advisory Board for the OEM Collaborative initiative Nearly 10 years of CDP submissions Numerous recognition awards for our long term leadership in climate disclosure and performance Developed / developing a number of PPAs…

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Gold Fields’ electrification journeyOur transitioning story towards low carbon electrification


>200 ktCO2e/year from high impact supply projects

~134MW gas installed, additional 16MW in

study

>55MW solar under study

>18MW wind under study

5MW battery under study

Energy security assessments

& 5-year regional plans developed

Genser gas turbines commissioned at

Tarkwa (22 MW) and Damang (25 MW)

GSM diesel to gas power plant (24

MW) commissioned

South Deep 40 MW solar PV FS

128 kW solar rooftop systems commissioned at

Helen Rd

Agnew power options FS

Tarkwa 15 MW gas turbine

installed

Progressing evaluation at Salares Norte “20% renewable energy ”

GSM solar power PFS

Cero Corona 5 MW floating solar PV

PFS, negative

ISO 50001 certified

Agnew power

station PFS

Gruyere gas power station (48 MW),

~200km gas pipeline

Reviewing renewables in Ghana

Agnew hybrid power station FS

GSM solar-battery FS complete, positive

South Deep 40 MW solar PV:

Regulatory changes

Agnew power station construction

GSM solar-battery construction

2015 2016 2017 2018 2019

2016 E&M

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Gold Fields I&T strategyLeverage I&T for greater energy costs savings


Horizon 3“+5 years”

Integrated and advanced energy

data analytics

Automated battery

powered equipment

Dry comminution

processes

BEV fleetHorizon 1“1-3 years” Electricity

metering systems

Fuel additives

Fuel switching

Fuel management

systems

Gas, wind and solar power

plants

Cleaner fuels

Efficient Technologies (lights,

VSD, motors, vent fans)

Engine controls

VoDConveyors,

from mobile equipment

Visualisation

Heat recovery

Horizon 2“3-5 years”

Diesel Hybrids

Diesel alternatives (CNG/LNG)

Fleet benchmarking

(data)

Remote smart grids

Waste sorting

Neutral idle technologies

In-pit crushing

Electric LVs

Presenter

Presentation Notes

Our I&T Group strategy has full aspects of energy cost containment This is part of our integration journey into business The benefits are many: reduce costs, reduce carbon footprint, better working conditions, healthier and happier employees

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How can we energise the mine of the future


Electrified: weaned off diesel

Gas: a key transition fuel

Diversified energy mix: wind, gas, solar

Modular and connected More storage

These, coupled with OEM technology changes, will disrupt how mines, are designed, operated and closed

Presenter

Presentation Notes

My daughter asked, “What if gold mining does not exist in future?”, got me thinking of the banks and the disappearing ATMs…worth thinking about though, for now, one can only describe the future energy systems, without being absolute on the specific technology, else we will be merely reinventing the past! In the short to medium term: what we see are the following trends in energizing future mines: We see a return of old reliable energy systems, this time modernized, such as trolley assist systems, UG cabled or battery EV fleet, storage systems (mechanical/chemical etc); all enabled by new electricity supply models More micro-grids, with penetration of various energy systems (hydrogen, solar, gas, wind, batteries, etc) Availability of gas for power at mines, could accelerate the conversion from diesel in material haulage Energy systems will be more modular, highly efficient, high connectivity to enable better control and load following An increase in storage technology is expected, to support the rising renewable energy base Likely to see more consortia buyers

Thank you

Presenter

Presentation Notes

48 MW gas turbines at our Gruyere mine (JV) in Australia, WA

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