In 2020, word about the dramatic turnaround at Gold Field’s ‘South Deep’ mine, third-largest gold resource in the world, began to reverberate across the industry. Since Gold Fields took ownership in 2006, South Deep had struggled to show a sustainable profit, despite significant investment. A failure to meet production expectations was forcing downward revisions in its annual projections while operating costs continued to climb.
Yet in 2019, the first green shoots of change started to emerge. And despite operating well below its full labour complement following the pandemic-triggered national lockdown in March 2020, South Deep continued to show progress on most of its operational measures that following year as well.
The metrics reflected a deep operational transformation. The mine saw a 41% increase in gold production in H1 2019 versus H2 2019; 30% increase to 26.7 tonnes per employee in 2019, up from 20.5 tonnes per employee in 2018; and a climb in development and destress from 39m/rig per month in 2018 to 60m/rig per month in 2019.
All of this contributed to turning the net loss made in 2018 into a net profit of over R104 million in 2019 – the first time in years that South Deep was able to show a positive bottom line.
At the time, Gold Fields attributed this sharp uptick to a broader cultural and capability alignment process, crediting OIM Consulting – specialists in building front-line leader capability – as having played a significant role in its drastic about-turn.
Said Executive Vice President at Gold Fields Martin Preece at the time, “We’ve seen a remarkable improvement in most production metrics during 2019, resulting from a culmination of initiatives centred around our people, including organisational culture, processes, systems and technical improvements; a process supported by OIM.”
More revealing is that these changes are not of the fly-by-night variety: after two years these figures continue to improve, if Gold Fields 2021 results are anything to go by.
While 2019 had seen an initial huge jump in tonnes per rig/employee/month (from 6 708 in 2018 to 11 966 in 2019), this improvement continued in 2020 with a further 8% increase, and again in 2021 with an 11% increase (14 345).
The annual amount of gold produced had initially climbed by almost 33% from 2018 to 2019, yet this positive upswing continued in the years that followed. A further 3% improvement was recorded in 2020, followed by another big jump in 2021 (28%).
Development and destress was yet another area where encouraging productivity trends continued. Between 2019 to 2020 there was a 20% increase in rigs per month, while 2021 saw a further 18% growth.
Since 2019, the free cash flow of the mine has also remained positive and steadily continued to improve, with a whopping 549% increase recorded in 2021.
Arjen de Bruin, Managing Director at OIM Consulting, says that there is no silver bullet to boosting performance, but rather continuous application of core principles. After our programme’s initial implementation and roll-out, Gold Fields “adopted it and made it their ‘business as usual’; integrating these principles into the very DNA and fabric of their organisation.
“Working with South Deep’s leadership team, we were able to create a solid foundation, which they embedded into their daily practises, meaning that they had the freedom and ability to tweak according to their specific requirements.”
De Bruin highlights that OIM Consulting’s protocol is based on three principles: mindsets, toolsets and skillsets. “We were onboarded in 2019 and set to work in changing the mindsets of South Deep’s front-line leaders – the people responsible for driving and delivering on Gold Fields’ strategy.
“In 2020, we completed our programme, leaving the mine with the toolsets they needed to sustain these changes beyond our exit. And based on the continued improvement we’ve seen in 2021, these new skillsets were firmly entrenched.
De Bruin adds that this is a testament to the mine’s leadership, which supports and drives change. “Transformation can only be sustainable with the true commitment of leaders, who dedicate themselves to reinforcing change at each and every opportunity.
“We are proud to have played a role in South Deep’s turn-around and are confident that these promising results will continue into 2022 and beyond,” he concludes.