Alfred Baku, Executive VP and Head of West Africa,


"For the 2021 interim period we paid out around US$250 million to shareholders, including US$25 million to the Ghana government, which has an interest of 10% in our two mines."

How have the Ghanaian assets performed in the last year?

Worldwide, mining companies lost between 5-20% of production due to Covid-19. Fortunately, Gold Fields managed the outbreak wisely, and our 2020 total production was up by 3% compared to 2019. We produced 862,000 oz in 2020. This was primarily driven by the continued build-up in production at Damang, having moved to the heart of the main ore body in H2 2020 as part of the reinvestment plan for the mine.

Our operational costs increased marginally by 2% to US$1,060/oz, from US$1,039/0z in 2019, as the pits are getting deeper and the grade quality lower. The increased gold price last year also led to higher royalty payment to the government. Nonetheless, we managed to improve our net cash flow across both operations to US$252 million in 2020, compared to US$174 million in the previous year.

Can you elaborate on your efforts to extend the LOM at Tarkwa and Damang?

For the first time in 15 years, we were able to replace the depletion of mineral reserves at Tarkwa in 2019, repeating the same performance in 2020. We are on track to realize another full replacement this year. At present levels, Tarkwa has another 15 years of life left.

The Damang reinvestment began in 2017, and we have since reduced the cost base and outperformed our targets. We are further studying the eastern side of the existing pits to increase the current five years LOM. Cost-reduction and rigorous exploration activities are the two means through which we can fully unlock the potential of the ore body and realize significant organic growth.

How is Gold Fields leveraging the positive dynamics of the gold market?

Gold Fields applies a disciplined long-term strategy, and has tasked its operations around the world to achieve a margin of at least 15% using a conservative baseline gold price of US$1,300/oz. In this way, we maximize our cash flow, reduce our debt, and, with the cash generated from existing operations, fund new projects such as the world-class Salares Norte in Chile. This discipline also allows us to reward our shareholders with strong dividends. For the 2021 interim period we paid out around US$250 million to shareholders, including US$25 million to the Ghana government, which has an interest of 10% in our two mines.

In 2022, the Ghana Gold Fields Foundation celebrates 20 years since being founded. Could you explain the funding mechanism and the main focus areas of the Foundation?

This was the first fund established by a mining corporation in the country. The Foundation has a formalized, independent governance structure and funding mechanism through which we set aside US$1 for each ounce of gold produced. Furthermore, 1.5% of profits before tax are also added into this fund, creating a solid funding base to assist local communities. The Foundation focuses on five key areas: education, health, water and sanitation, agriculture and infrastructure. Since 2004, when the Foundation was officially registered, we have invested US$79 million across different projects. Some of our legacy projects are the 33 km asphalted road between Tarkwa and Damang, which has significantly improved travel time and boosted economic activities between the two towns. At the moment, we are working on upgrading the T&A Park in Tarkwa from its current 400 seat capacity to an international stadium with over 10,400 seats. Jointly with our peers in the region, we are also discussing the possibility of building an airport near Tarkwa.

How is Gold Fields working to minimize its environmental footprint?

For both Tarkwa and Damang, we are transitioning from LPG to natural gas to power our mines. We already generate our own electricity using an LNG-powered plant for which we built an 80 km natural gas pipeline. The next step is to realize the same transition in the CIL processing plant.

Do you have a final message?

Safety remains our key priority and we have successfully rolled out our “Courageous Safety Leadership” programme to empower all our employees to speak up when they note unsafe behaviours or situations. Next year we will launch a new initiative called “Vital Behaviours”, which starts from the premise that most safety incidents are related to human error or risky behaviours.

*Alfred Baku stepped down from his role with Gold Fields in December 2021