Our context

The Group has in recent years faced short and medium-term price pressures, challenging operational conditions and rising costs related primarily to deeper mining, increased waste and longer haul distances during a period of escalating fuel prices. These factors have placed growing pressure on margins and cash flow, in particular over the past two years.

Our approach

By turning the spotlight on enhancing the efficiency of our operations through our Business Transformation (BT) process , we are shaping our business for a profitable and sustainable future for the benefit of all our stakeholders – targeting US$100 million cumulative revenue, cost savings and productivity improvements.

We remain on track to achieve our cumulative objective of US$100 million in incremental revenue, productivity improvements and cost savings for the targeted four-year period to end 2021. Initiatives that have been implemented to date are expected to deliver US$60 million of the targeted US$100 million.

Furthermore, in line with the continuing strategy of early detection of large diamonds and diamond damage reduction, the Company approved a pilot plant to be constructed at Letšeng. The manufacturing of the pilot plant has commenced, and the project remains on target to be commissioned at the end of the second quarter of 2019.

Our context

Through careful capital deployment, prudent cash flow management and strong relationship management with our funders, we strive to protect and strengthen our balance sheet.

Our approach

Strict investment criteria are applied when assessing possible capital projects. All investments must support long-term growth while managing debt levels to preserve our cash position and create value for our investors.

Our context

We recognise that conflict diamonds and their role in perpetuating human rights abuses has been the greatest single threat to consumer confidence in diamonds over the past decade. Given this context, we understand the need to protect the premium brand of diamonds through embedding the highest standards of corporate governance and ethics in our organisation.

Our approach

We are committed to supplying rough and polished diamonds to our clients with assurance of the highest product integrity.

We are strongly opposed to the global trade in conflict diamonds and the effects it has on political stability, human rights and the legitimate global diamond trade. The Kimberley Process certification scheme aims to eliminate this trade. We fully support the objectives of the Kimberley Process and adhere strictly to its provisions.

Every client is carefully vetted using anti-money laundering protocols and ‘know your client’ reviews to ensure that they are compliant with all regulatory requirements.

Our context

Security and theft prevention are serious risk-management considerations when dealing with high-value products such as diamonds. From mining and extraction through to the sale of our product, we ensure meticulous care and secure handling.

Our approach

The safety and security of our clients, staff and product are of paramount importance to us, and we continue to invest in risk mitigation and management at our higher-risk facilities.

Our operations are required to fully assess and understand their risk profile in this regard. In addition, we regularly engage specialists to keep us up to date with the latest protection technology. We ensure the assessment of our security risk-management systems and implement improvements to identify vulnerabilities.

Our context

Like any other business, Gem Diamonds’ operations are exposed to risks and uncertainties that could potentially have an adverse impact on the Group. Ongoing currency volatility remains a challenge as we generate our revenue in US dollars, while our cost base is incurred in local currencies of the various countries within which we operate. The volatility of these currencies against the US dollar impacts our profitability. The resilience of our business in relation to changes in exchange rates is material to our viability and allows us to harness opportunities during economic flux.