Gold miner Gold Fields has refinanced its $1.2-billion 2019 revolving credit facility (RCF) and, for the first time, the new facility is linked to furthering Gold Fields’ environmental, social and governance (ESG) efforts in terms of gender diversity, water stewardship and decarbonisation.
The principal loan includes an option to increase the facility by up to $400-million. The facility will mature in five years, with an option to extend the tenor through two one-year extensions.
Gold Fields says the margin is competitive – subject to rating margin adjustments and sustainability margin adjustments – and the company expects to benefit from a lower margin depending on the fulfilment of the sustainability-linked key performance indicators (KPIs) under the facility agreement. Conversely, Gold Fields will pay a premium on its margin if the KPIs are not met.
The facility agreement was concluded with a syndicate of 16 banks, with Japanese financial institution MUFG Bank as sole global coordinator and Dutch financial institution ING Bank acting as a joint sustainability coordinator alongside MUFG.
The sustainability-linked KPIs for the five-year term of the loan until 2027 are aligned with Gold Fields’ strategy, as well as its 2030 ESG targets. They address the most material ESG priorities for the company and the mining sector in general.
The KPIs include improving women’s representation in the total workforce from Gold Fields’ current 23% level; increasing the amount of reused or recycled water from the 75% of total water consumption achieved in 2022; and an abatement in Scope 1 and 2 carbon dioxide emissions through renewable energy projects.
“This is Gold Fields’ first sustainability-linked loan and relates to our second strategic pillar, namely to ‘build on our leading commitment to ESG’. It illustrates how ESG has become fully integrated into our business,” says Gold Fields CFO Paul Schmidt.
The KPIs set out in the loan, if achieved, will assist Gold Fields in reaching its 2030 ESG targets, which were launched in 2021. For the relevant ESG areas, the 2030 targets are 30% women representation, 80% of water consumed to be recycled/reused, and reducing net Scope 1 and 2 emissions by 30% and absolute emissions by 50%.
Gold Fields has also completed four five-year RCFs with South African banks for a total of R2.5-billion to fund capital expenditure, as well as general corporate and working capital requirements of the group.
The interest rates under the RCFs with Rand Merchant Bank (R1-billion), as well as Nedbank, ABSA Bank and Standard Bank (R500-million each) are linked to the Johannesburg Interbank Average Rate plus a margin.
