Gold Fields: Destination Net Zero – it’s a journey

By Sharyn Macnamara

Gold Fields’ executive, Martin Preece takes us on an excursion through the Gold Fields’ Energy and Carbon Management Strategy – destination Net Zero, saying, “It’s a journey”.

“Developing Net-Zero Mines in Africa; pipe dream or smart business choice?” was a question asked of several industry experts, including Preece, in the Sustainability Series on an Investing in African Mining Indaba 2024 panel. Preece was clear – the company’s journey to Net Zero is a dream that is becoming a reality through smart business choices. He said leadership at the company believes in the end goal and are strategically focused on reaching the destination, step by step. Rather than being paralysed by seeking a complete solution from the start, the approach has been not to hesitate, but to tackle the tall order starting with short term, big-win solutions and working towards medium- and long-term goals. Building on its current base of renewable plants at five of its mines, Gold Fields is looking at other projects that incorporate renewables from solar, to wind, to hydro and using battery storage. The company’s renewables journey started in Australia three years ago and has since moved to South Africa, Peru and Canada.

First port of call – renewables

Preece said the journey to Net Zero for Gold Fields started years ago when, in support of the 2015 Paris Agreement, the company set a long-term objective of carbon reduction. “However, the strategy also required that the transition had to be economically viable, so the route taken became a smart business choice and with benefit in terms of energy supply security and lower operational costs. The thinking behind the strategy has been to find the ‘best bang for the company’s buck’. So, the journey began where the bulk of Gold Fields’ carbon is burned – with electricity.”

One of the first projects to be commissioned with this goal in mind was a hybrid renewable power plant in 2019/20 in Western Australia at the Agnew mine, an underground operation. This was a complete solution including solar, wind turbines, gas generator, battery power storage and diesel back-up power. Preece highlighted: “Currently, on average, 50% of the power consumed at Agnew is generated by renewables, and on a good sunny, windy day this can increase to just shy of 70%.” Agnew is planning to instal more solar panels to add another 10–12MW to its capacity.

At the time of writing, Preece noted that the Gold Fields board was close to making a decision on a USD195-million renewable microgrid at St Ives, also in Western Australia.  “This project speaks to financial viability and logic. It promises to take the St Ives operations to 72% of renewable energy consumption, with significant cost and environmental benefits. Further down the line, the company will also be sourcing hydro power from Hydro-Québec, the Quebec public utility. This will make the Windfall Project the company has just bought into in Canada, essentially 100% reliant on hydro renewable electricity. Cerro Corona mine in Peru is yet another operation running 100% on certified renewable hydro power.

During 2023, 17% of the electricity consumed by Gold Fields’ operations was renewable, compared with 13% a year earlier. The new project at St Ives promises to bump that number up to 23% once the project is complete.

Second port of call – cutting out diesel

Diesel consumption makes up a significant amount of the carbon emissions at Gold Fields and Preece said that this would be the next challenge to be tackled, either by reducing the use of vehicles altogether, replacing them with battery electric vehicles (BEVs) or by replacing the diesel with alternatives like biofuel. He noted that there is still a lot of work to be done in this area as there are major challenges hindering the transition. Biofuels are not only four times more expensive than diesel, but the use of these fuels is often not backed by OEMs supplying mines with fleets. The use of alternative fuels could put warrantees on high capital machinery at risk. “We have run trials on BEVs and the results are not yet where we need them to be for our environment and mining conditions. The current challenges lie in the rate of battery depletion, the change-out time on batteries and performance versus our current diesel operated machinery.”

In Australia, where the company trucks material out from underground, a possible solution is currently being investigated using conveyors on rail – railveyors – to transport material. If viable, this would allow Gold Fields to move material from underground with this solution and power the railveyor using renewable electricity. This would significantly reduce the need for diesel trucks and reduce carbon emissions substantially.

Third port of call – scope 3 emissions

A big step for Gold Fields in the goal to reach Net Zero by 2050 is to reduce its scope 3 emissions. “In line with this, we have recently committed to reduce scope three emissions by 10% by 2030,” says Preece. “The hope is that we achieve more than this set target, but we do not want to overcommit in this space as scope 3 is far more difficult to achieve given that these are emissions largely generated outside our control principally by our suppliers. We plan to work closely with suppliers of bulk materials, such as cement (for construction work and to add to backfill) and steel.

“The hope is that our suppliers will also commit and invest in decarbonising, seeing the value in working with operations that secure long term business contracts and investing in long-term relationships built on trust. “We will most probably have to absorb some premium to pay for greener products, but it is not economically viable to expect miners to pick up the entire bill for a third party to become compliant. However, we have already seen a positive trend in the industry with some scope 3 generators taking steps in the right direction.”

Improving energy efficiencies – in parallel, continuously

In Preece’s view, improving energy efficiencies is most probably least glamorous but one of the most important and value accretive routes to decarbonisation. The transformation of operational processes and procedures to increase efficiencies involves difficult and innovative work. Instead of eradicating 15% chunks of carbon emissions, these routes only result in 1.0% or 0.5% reductions, but will have a material impact cumulatively across the business.

“These solutions must be constantly driven and monitored as there is double benefit that lies within them. Because one is making the base smaller and the differential pulls through to both the numerator and the denominator, the percentage of renewable energy required also automatically goes up with inefficient consumption. But more importantly, one does not have to take the dollar cost of renewables to fuel that which we have removed from the equation. So, one reduces both CAPEX and OPEX in addressing these inefficiencies and the cost of carbon.”

Preece said an example of this is optimising compressed air systems and installing new ventilation fans and controls in South Deep’s return airways. It is essential that these airways are maintained and kept clean and free of obstructions that could cause resistance, which in turn would require surface fans to work harder and burn more electricity. Furthermore, the mine is in the process of connecting all fans to the digitalised control room on surface to assist in efficiently managing supply and demand, including controlling activities such as hoisting and water pumping. This can be prioritised during the day to draw solar power and can be scaled back at night and during shift changes to avoid wasting electricity. Managed via the control room, teams are no longer required to manually switch these systems on and off.

A last port of call – buying carbon credits

Preece highlighted the fact that buying carbon credits would be a last port of call for the company – if all possible scope 3 emission abatements have been tackled, the company may consider covering the shortfall in reaching net-zero by investing in carbon credits. The mining industry has two concerns with carbon credits. One, it shifts responsibility to another party and two, these credits may soon sell at a premium as more and more miners resort to that option.

Interestingly, Gold Fields has rehabilitated some old tailings dams at its operations in Ghana. The company has planted fruit trees and has initiated other agricultural projects on these dams. Local farmers are now harvesting cashews, coconuts and mangoes. “This investment too could count as an abatement – but these are projects that will be focused on further down the road,” Preece said.

“The numbers speak for themselves and show that this is indeed a journey,” said Preece. “Our Scope 1 and 2 emissions reduced in 2023 by approximately 5% from 2022 levels. Against our 2030 target of a net 30% reduction, we are about 4% below our baseline set in 2016. The group energy spend made up approximately 19% of operational costs in 2023, versus 21% in 2022 – and this despite escalation and inflation at around 6%. So, we are definitely making progress, but it is slow and requires investment and perseverance.”

Supplied by Goldfields

About Martin Preece, executive at Gold Fields: During 2023 Martin Preece acted as interim CEO at Gold Fields and, since the beginning of this year, has been an executive at the company. In May 2017 Preece joined Gold Fields as executive vice-president, South Africa, leading the successful ramp up of the South Deep mine up to end-2022. Prior to joining Gold Fields, he was COO at De Beers, South Africa. Preece has 38 years of mining experience, starting his career as a learner miner and holding a number of operational and technical roles before taking up mine manager positions at various operations.

 

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