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Outgoing Gold Fields CEO: Worker fatalities are my biggest regret

Holland steps down at the end of March.
Nick Holland. Image: Moneyweb

Outgoing Gold Fields chief executive Nick Holland says his biggest regret during the 13 years he has been at the helm of the gold miner is the high number of employee fatalities. Over 120 employees have passed away in the line of duty at Gold Fields, including nine who succumbed to the covid-19 related illnesses in 2020. 

On his first day as CEO, nine people died at the company’s South Deep operations when a vent hole raise conveyance in which they were travelling became dislodged and fell more than 60 metres.

Within the same week, a driller’s assistant died in a fall-of-ground accident and another four other miners died following an underground accident at the groups’ Driefontein mine.

The company would go on to record a total of 47 fatalities in 2008 alone, which led Holland to declare in the company’s 2008 annual report that the company would not continue to mine if it cannot guarantee the safety of employees. 

By 2019, he had reduced total group fatalities to one, which was recorded at its notorious South Deep operations.

“That sort of hit me very hard on the first day,” Holland said on Thursday during an announcement of the company’s results for the year ended December 31, 2020.

Gold Fields share price

He said his commitment to safety once led him to shut down all of the group’s mines in South Africa and put 35 000 people on the surface because he was unhappy with “some of the things we were doing and had to do”.

“Losing people to fatalities is something that shouldn’t happen in our game and we are all working hard to eliminate fatalities and serious injuries,” he said. 

Holland will step down at the end of March, and will hand over the baton to former Anglo American Platinum (Amplats) chief executive Chris Griffith, who Holland says shares similar sentiments to him regarding the importance of safety. 

Production and expansion

It is estimated that South Deep lost approximately 32koz (thousand ouncesof gold due to Covid-19-related stoppages in 2020, partially offset by 10 additional production days as a result of the change in the production calendar.

Had it not been for the pandemic’s disruptions, Holland said, South Deep would have exceeded its production forecasts. 

“For 2021, we expect a strong increase in production [+27%] to 290koz. Looking ahead, we are reasonably confident that we can add another 20-30% over the coming [three to four] years,” Holland said. 

For the year ahead, Gold Fields is expected to increase its spending on its capital projects, with Holland highlighting the planned expansion of the Salares Norte Project in Northern Chile, which is expected to account for $508 million of the company’s total $1.177 billion capital expenditure for 2021. Salares Norte is expected to be 70% completed by the end of the year.

“The other increases are driven by specific projects at some of our core operations. These include the development of a second decline at the Wallaby Underground mine at Granny Smith [Au$51 million], plant modifications and increased development at Agnew to enhance the longer-term outlook [Au$38 million], and finally increased new mine development, tailings facility expansion and underground infrastructure expenditure at South Deep [US$22 million],” Holland said. 

In his final year as Gold Fields chief executive, the company reported an annual after-tax profit of $745 million compared to profit of $175 million the year before. The company declared a final dividend of 320 cents per share, bringing the total full-year dividend to 480 cents per share.

Headline earnings for 2020 increased more than fourfold to $729 million, compared to $163 million the previous year. The surge in annual earnings was boosted by increase in the gold price. 

Read: SA’s gold stocks soar

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When asked if he had any regrets

”Yes, I haven’t had enough sex”

(Sir) John Betjeman English Poet ((1906 – 84)

Sir, what about the toxic gold derivative hedge book that you bought and the resultant claim for billions of brands from Randgold?

Second should be the Invictus BEE deal.

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