AN OVERVIEW FROM OUR CHIEF EXECUTIVE OFFICER



     

Overview

Against the backdrop of the ongoing pandemic, our priority in 2021 was to continue operations safely and sustainably while generating a return for our shareholders and delivering on our community initiatives. We faced numerous challenges during the year, including an unusually high rainfall season that impacted both mining and treatment activities and a mixed safety performance, particularly in the first half of the year. Despite these headwinds, we continue to make steady progress with the implementation of  our strategy as well as our Sustainable Development Goal commitments.

As an organisation, we have always subscribed to the highest standards, across all of our activities.  While we strive for excellence in our operations, we have also instilled agility and accountability in the way we operate, allowing us to respond expeditiously to any emerging issues. We strive to create a competitive advantage through innovation, efficiencies, and ethical conduct - extracting maximum value from our products to benefit all stakeholders.

Business Transformation

Pleasingly, we exceeded our business transformation target of $100 million in revenue, productivity and cost-saving measures on time. The four-year plan, launched in 2017, was successfully concluded this year, and  lays the groundwork for our ongoing commitment to continuous improvement.

At an operational level, the Group will continue to realise the benefits from the Business Transformation programme with  efficiencies and cost reduction initiatives that maximise cash flows and maintain our status as a responsible, safe and low-cost operation. We believe this focus will support our strategic objectives and continue to unlock value for shareholders.


COVID-19

COVID-19 continued to present challenges in 2021. Government enforced lockdowns significantly impacted the operations across our organisation and it is to the credit of all our employees and contractors that 2021 ended with creditable operational and financial results.

I am proud of the effectiveness of our organisational response over the past two years, enabling us to minimise the impacts of the pandemic. We  quickly put in place a comprehensive COVID-19 protocol at Letšeng that gave all stakeholders assurance of our dedication to  keeping our people safe and operating in a responsible manner. In addition, we also prioritised working with the Government of Lesotho to safeguard our PACs from the impact of the pandemic

Since the start of the pandemic, we have spent a total of LSL26 million on protocols and programmes within our workforce and neighbouring communities, highlighting our commitment to addressing the effects of the pandemic. Furthermore, we have administered a total of approximately 32 000 COVID-19 tests to our staff. I remain deeply impressed by, and grateful for, our teams’ commitment to keeping one another safe by adhering to our stringent COVID-19 protocols.

A key aspect of the pandemic has been its effect on mental health. We have brought in mental health professionals to provide counselling and support to employees and their families, and we will continue to emphasise this aspect of our company’s Covid-19 response.

Gratifyingly, we have, to date achieved a 99% vaccination rate amongst our staff. This was accomplished through a focused  campaign with two key objectives: firstly – to highlight that it is our responsibility to keep ourselves and our fellow workers safe. Secondly – hesitation and concerns around vaccination were addressed directly through an evidence- and education-based approach, with numerous interventions put in place to inform and educate our teams.

We  continue to partner with the Government of the Kingdom of Lesotho to address COVID-19, and we are pleased to have donated twenty thousand doses of the Johnson & Johnson vaccines. While the severity of the virus appears to be abating, we will continue to be vigilant by remaining focused on maintaining stringent COVID-19 protocols and appropriate support for our stakeholders.

Talent pipeline

We are immensely proud of the talent pipeline we have developed at Letšeng. When we started the Letšeng operation, we employed around 250 people, of whom more than half were expatriates. However, we have remained steadfastly committed to local talent development and ongoing skills transfer, recognising that local employment and procurement are key drivers in creating sustainable impact.

Our workforce, now more than 1 500 people, is 98% local, reflecting the investment the Company has made in relevant disciplines– mining, engineering, geology, mine planning, accounting, finance and managerial skills among others. Since 2016, more than 48 tertiary level scholarships have been awarded to talented individuals to study further  and 25 previous awardees are now employed as part of our team.

Climate change and global goals

We recognise the importance of understanding climate  as both a risk and an opportunity. The Group is continuously working to identify how climate change impacts its operational resilience in the short, medium and long term; as well as understanding the Group’s own carbon footprint, climate impact and associated opportunities. In most respects, we are well prepared for this process. The implementation of business continuity and disaster management plans for both expected and extreme natural events is part of how we do business.

Supporting the UN SDGs remains a priority for the Group and we are working to integrate the recommendations of the TCFD into our existing UN SDG framework.

In the longer term, we are aware that managing our carbon footprint and transitioning from carbon-based energy sources will have to be tackled, and that this will have an impact on our financial and other forms of capital. There are inevitably trade-offs that will have to be made. But the importance of making those trade-offs is clear, and our ability to do so in a way that doesn’t hamper our sustainability as a business is increasing rapidly as we bolster our skills and knowledge.

Corporate social responsibility

The roll-out of our2020 corporate social responsibility investment programme was delayed due to COVID-19 restrictions imposed on social movement and gatherings. In 2021 the Group did very well to not only implement delayed community projects, but to respond effectively to unplanned community needs as a result of the extreme weather conditions and localised flooding in the Patiseng valley. In early 2021 floods caused severe damage to community infrastructure, and we immediately worked to rebuild roads and bridges – a reminder, if any were needed, of the impact of climate-change-related extreme weather events on communities and operations. Food packages were also provided to isolated communities affected by both Covid-19 and extreme weather events.

A community needs analysis was  undertaken, which highlighted several opportunities to enhance our CSI programmes to not only bolster the resilience of projects in the longer term but also to incorporate our UN SDG commitments into how we identify projects for investment.

An important focus of our CSR activities, and reflective of similar integration throughout our business, has been on identifying opportunities to incorporate renewable energy and sustainable practices, for example through the installation of solar-powered boreholes and streetlights.

Outlook

Our focus for 2022 is clear: to build on the work of the past few years to streamline our business and maximise efficiencies, ensuring our operations continue to run in a safe and sustainable manner, with well contained costs  delivering consistent shareholder returns. We believe the overall global demand for diamonds will remain robust over the medium term and anticipate that the appetite for the unique diamonds produced at Letšeng will remain firm.

We remain committed to preserving and enhancing our social licence to operate by collaborating with our stakeholders, including government, employees and communities to develop appropriate solutions that deliver shareholder returns and improve lives.