Gem Diamonds Chairman's review

In this Q&A our Chairman, Harry Kenyon-Slaney shares his insight into the Group's sustainability perspective and commitment to governance excellence.

Q: As Chairman of the Board, how would you describe Gem Diamonds' approach towards governance? How has this approach supported the Group during the COVID-19 pandemic?

As an organisation, Gem Diamonds embraces governance excellence at every level. We see this as a constant journey and one that we are all fully committed to. The Board's role is to ensure that good governance is embedded throughout the organisation. We are continuously reviewing our governance practices to find ways to strengthen and enhance their implementation.

Over the past year, the world faced unprecedented challenges as the COVID-19 pandemic disrupted the way we live and work. I am pleased to report that all Board members embraced these challenges and as a team, we responded swiftly. In line with social distancing requirements meetings of the Board moved online and were extended to provide more time for debate and discussion, particularly around health and safety, strategy development and implementation as well as the oversight of risk management systems and associated risk mitigation plans.

We were cognisant of the personal and professional challenges presented by extended periods of remote working. We sought to ensure our people had all the support necessary to cope with this new environment and we adapted our internal and external audit work plans to ensure no governance areas were overlooked as a consequence of the prolonged absence of senior management from the operating sites.

Sustainability is central to everything Gem Diamonds does. Since inception, we have recognised that we are a guest in Lesotho and that we operate the Letšeng mine in partnership with the government who retains a 30% shareholding in the operation. Letšeng is a material part of the economic fabric of the country and the financial, commercial and social contributions it makes to the nation are very important. We work closely with the government to ensure the mine operates as efficiently and effectively as possible so that these contributions are maximised.

We are committed to creating and sharing value with our host communities by ensuring that we are seen as a valuable partner to each other, and we are proud of the fact that 98% of our workforce comprises Lesotho nationals. We have a long track record of working collaboratively with local communities and national government to create and deliver sustainable projects that will benefit many lives for decades to come. Our sustainability initiatives include infrastructure projects, water hygiene, business and job creation, agricultural support and educational bursaries.

We are also working hard to play our part in achieving the full range of global ESG goals. Some examples are the development of a climate change action plan for Letšeng, the active advancement of the United Nations (UN) Sustainable Development Goals (SDGs) and ensuring that our tailings and water storage facilities (TSF) are all fully compliant with all recommendations from the global panel created in 2019 to protect surrounding communities.

As I have mentioned, COVID-19 presented a significant challenge for the Company in 2020. At the onset of the pandemic, our overarching objective was to maintain the safety and health of our employees and their families, and the communities close to our operations. We did this by moving quickly to institute rigorous protocols to limit transmission within our operations. We adopted new remote interaction methods to keep people apart and locked down our activities according to the Lesotho Government's guidelines.

In addition, we moved fast to assist local communities by providing food parcels to those most in need. We established an effective testing regime to ensure that we could identify infection cases before they could impact our operations. We also worked closely with the Lesotho Government to support its testing programme, and we were able to facilitate and fund the only major testing centre in Lesotho. This centre has become an important part of the Lesotho Government's efforts to control the outbreak.

The pandemic has been difficult for everyone and these challenges remain very real as we head into 2021. From my perspective as Chairman, COVID-19 demonstrated the importance of the deep and enduring relationships between us, our local communities and national government. I believe these relationships have only been strengthened by joint efforts undertaken to protect our employees and communities during this past year.

Our goals were to improve our safety performance, strengthen our balance sheet by returning to a net cash position and begin consolidating our long-term strategy following the conclusion of a new 20-year lease agreement with the Lesotho Government. Pleasingly, we have been able to achieve all three of these objectives despite the tragedy of COVID-19 and I believe this work has provided a very sound platform for the year ahead.

While we are never complacent, and always believe that we can do better, overall I think we performed well during 2020. I am pleased with our improved safety performance, achieving our lowest all injury frequency rate in a decade, and I am very proud of the entire organisation's efforts in moving quickly to prevent COVID-19 from becoming entrenched in our operations and communities.

We recently constructed an extension to our TSF which is fully compliant with all the international technical recommendations and secured the recertification of our ISO accreditation.

In the social arena, we continue to embrace close and productive relationships with local communities. The appointment of Mazvi Maharasoa, our new non-Executive Director, to oversee employee and community engagement on behalf of the Board has also proven very valuable. Her interactions with different stakeholders have been constructive and identified various areas for further improvement.

Every employee of Gem Diamonds contributes to the sustainability of the Company and I want to thank each and every one of them for their efforts in what has been a particularly challenging year. As the COVID-19 pandemic emerged we were forced to confront the uncertain trajectory of the virus, operational lockdowns, personal isolation, travel restrictions and extended periods of remote working which meant that established work processes were disrupted. We were gratified to see new leaders step up to these challenges – and on behalf of the Board, I want to thank them for their efforts.

I want to take a moment to acknowledge all the healthcare workers who have been right at the forefront of the fight to halt the spread of the virus, both at our operations and within local communities, and to thank them for their tremendous efforts. However, sadly and despite this wonderful work, some families were seriously affected and I want to offer the Board's condolences to the families and friends of our employees who lost their lives due to COVID-19. For us, any loss of life is unacceptable and we will all remain extremely vigilant until a lasting and comprehensive vaccination solution is in place.

I want to thank our management team for the resilience and flexibility they demonstrated in swiftly establishing an effective means of protecting the Company's operations from the potential ravages of COVID-19, and for protecting both the lives and livelihoods of our employees.

Finally, I want to thank my fellow Board members for their commitment and support during the past year and particularly for the dedication and diligence they applied to their Committee and Board governance work and to our overall efforts to become an ever more sustainable business.

Harry Kenyon-Slaney
Gem Diamonds