Gold Fields Finds Solutions in Shared Value Strategy
Gold Fields engaged FSG to develop shared value strategies for 3 different mining projects, located in Peru, the Philippines, and South Africa. In Peru, FSG worked with Gold Fields La Cima (GFLC), operator of the Cerro Corona mine, designing initiatives to improve the competitiveness of local suppliers and increase the effectiveness of water resource management.
The Cerro Corona gold and copper mine operates in a region with one of the highest poverty rates in Peru, widespread environmental contamination from historical mining activity, and ongoing social conflict around mining. The tension between mining companies and local communities runs high, often leading to violent protests. In 2011, demonstrations against a planned $4.8 billion mining investment not far from Cerro Corona resulted in a number of deaths. Understanding this context, Gold Fields La Cima, the operator of the mine, sought to build on its significant social investments in neighboring host communities to ensure sustainable social impact beyond the mine’s planned closure, and to align social investments more closely with business challenges and opportunities.
Gold Fields partnered with FSG to analyze key business and host community challenges and identify several potential shared value focus areas. After reviewing the options, Gold Fields prioritized local supplier development and the effective use of water resources and worked with FSG to develop strategies for implementation. As shared value initiatives, these investments would generate benefits for the community as well as the business.
The local supplier development strategy was designed to increase the competitiveness of existing local suppliers and identify opportunities to develop a regional mining supply cluster. This would be a catalyst for sustainable local economic development and enhance the competitiveness of the company’s supply chain through increased quality, reliability, and reduced costs.
The water strategy focused on developing a sustainable model for potable water delivery to the host communities and catalyzing the cleanup of environmental contamination through research and development pilot projects. Water education and governance initiatives would enhance these efforts. This approach aims to improve the health of the local community and environment and decrease mine closure costs and recurring business costs related to potable water delivery and infrastructure maintenance. For this strategy to succeed, Gold Fields would need to bring together local and national government officials, non-governmental organizations, multilateral institutions, and other companies to identify new approaches for water governance.
The key to aligning Gold Fields’ social and business goals and crafting a strategy that simultaneously delivered on both was a coordinated effort involving representatives of a number of different departments in the company. Preliminary estimates indicate that Gold Fields’ shared value initiatives will benefit thousands of people in the Cajamarca region and increase Gold Fields’ social acceptance in an anti-mining region. At present, the Cerro Corona mine procures around 7 percent of its total supplies and services from host communities, while 29 percent of its total workforce consists of residents of these host communities.
About Gold Fields
Gold Fields La Cima, under the parent company Gold Fields Ltd. of South Africa, operates the Cerro Corona open-pit gold and copper mine in Cajamarca, Peru. Within Gold Fields Ltd., the Cerro Corona mine is recognized as a leading example of sustainable gold mining and effective community relations practices.
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