2018 Sustainable development overview

Financial and operational

Overview

We strive to take a holistic view of business performance and integrate sustainability into our everyday activities. We hold the belief that in addition to guaranteeing fair returns to all stakeholders, this approach ensures our social licence to operate.

Our key performance indicators

  • US$267 million in revenue

    (2017: US$214 million).

  • US$82 million underlying EBITDA

    (earnings before interest, tax, depreciation and amortisation) of (2017: US$49 million underlying pre-exceptional EBITDA).

  • US$23 million in capital expenditure

    (2017: US$18 million).

  • 6.5 million production tonnes treated
    (2017: 6.5 million).


Our challenges

  • Numerous factors beyond our control, both social and financial, may affect the price and demand for diamonds. However, Letšeng's high-value production has been less susceptible to fluctuating market conditions.
  • Product security and theft prevention remain high priorities.
  • Minimising loss of revenue through diamond damage.
  • Assessing growth opportunities against strict investment criteria.
  • Cost of production in times of volatile exchange rates and commodity prices.

Our future

  • Continued focus on capital and cash management discipline to remain cash generative.
  • Implementing various business efficiency and optimisation initiatives to maintain cost optimisation.
  • Advancing our drive to minimise diamond damage through the testing of different innovative technologies for diamond detection and liberation.

Related UN SDGs


Overview

The value of our diamonds is inextricably linked to the manner in which they are mined. As such, we are committed to supplying rough and polished diamonds to our clients that are produced and distributed in accordance with the highest ethical and legal standards. We continue to entrench robust governance throughout our business, to ensure we continue to operate with ethics and integrity.

Our key performance indicators

  • Every rough diamond of ours is certified through the Kimberley Process.

  • Fully compliant with all government regulations and relevant voluntary codes concerning product and service information labelling.

  • Zero significant cases of bribery, corruption or anti-competitive behaviour have been brought against us to date
    (2017: Zero).

  • Zero incidents of potential breach of confidentiality of clients
    (2017: Zero).

  • 24 cases of whistleblowing
    (2017: 19).


Our challenges

  • Ensuring full compliance with the amendments and additions to the UK Corporate Governance Code.
  • Ensuring all employees, from diverse backgrounds, understand and abide by our code of conduct is an ongoing challenge.
  • The impact of any perceived ethical breach has the potential to cause reputational damage and subsequently impact on product value.

Our future

  • Improving human rights training.
  • Continued management of compliance with the Group-wide Code of Ethics.
  • Continued focus on raising standards across our supply chain to ensure compliance with our standards relating to human rights, ethics and bribery and corruption prevention.

Related UN SDGs


Overview

Our employees are at the heart of our organisation, and their health and safety is our top priority. Beyond this, we prioritise their development and well-being and seek to promote equality and diversity at every level of our organisation.

Our key performance indicators

  • Zero fatalities
    (2017: Zero).

  • Four lost time injuries (LTIs) have been recorded
    (2017: One).

  • Lost time injury frequency rate (LTIFR) is 0.15 (2017: 0.04).

  • 64 952 proactive safety management actions implemented
    (2017: 74 666).

  • US$36.1 million spent on employee remuneration and benefits
    (2017: US$ 36.6 million).

  • 8.7% staff turnover (2017: 8.7%).

  • Retained ISO 14001 certification at Letšeng and received ISO 45001 certification for the first time.


Our challenges

  • The challenge of mining a remote site at altitude in severe weather conditions requires a consistent focus on aspects of employee health, safety and well-being.
  • Our current Business Transformation (BT) process involves cost reductions and rationalisation. During the ongoing transformation process, all changes and cost reductions have been thoroughly scrutinised to ensure that the safety of our staff and the sustainability of the business are not compromised in any way.

Our future

  • Continuing to develop and retain the right people to deliver on our organisational objectives and to achieve exceptional results.
  • We remain committed to ensuring our employees are treated fairly and continue to prioritise issues that promote safety, health and well-being.

Related UN SDGs


Overview

To maintain our social licence to operate, our communities must experience the positive impact of our operations. This goes beyond a traditional social investment approach, calling us to pursue quality partnerships that create sustainable value for all our stakeholders.

Our key performance indicators

  • US$0.8 million invested in social projects

    (2017: US$0.5 million).

  • US$ 159.3 million spent on local procurement

    (2017: US$189.7 million).

  • Zero major or significant community incidents

    (2017: Zero).


Our challenges

  • Ensuring that our investments create sustainable value beyond the life of the mine.
  • Balancing growing stakeholder expectations with our continued drive to reduce costs and enhance operational efficiencies.
  • Enhancing our engagement strategies to encourage communication between our operations and our communities.

Our future

  • Continually enhancing communication and stakeholder engagement strategies.
  • Ensuring continued partnership with our PACs to support the creation of lasting mutual benefit.
  • Undertaking a comprehensive needs analysis that will inform the development of our next three-year CSI plan for Letšeng.

Related UN SDGs


Overview

While the extractive industry has the potential to significantly impact ecological systems, at Gem Diamonds, we take our duty of care seriously – seeking to minimise, manage and mitigate potential environmental impacts at every stage of the mining lifecycle.

Our key performance indicators

  • Zero major environmental incidents for the tenth consecutive year.

  • Zero significant environmental incidents for the fifth consecutive year.

  • US$0.6 million invested in environmental protection during 2018

    (2017: US$4.8 million).

  • No fines for environmental transgressions or non-compliance with host country legislation for the ninth consecutive year.

  • US$17.8 million environmental rehabilitation provision

    (2017: US$17.3 million).


Our challenges

  • Managing water quality and consumption challenges across the Group.
  • The remote locations of our mines combined with limited formal waste-disposal facilities within our host countries have challenged us to rethink the way we approach waste management.

Our future

  • Continued commitment to ensuring best practice environmental management across the Group, with a particular focus on water and waste management.