Q AND A WITH OUR CHIEF OPERATING OFFICER


     

How would you describe 2021 from a health and safety perspective? 

Operationally, Letšeng faced numerous challenges during the year including the COVID-19 has placed on our operations, teams and supply chain efficiency. COVID-19 related isolation requirements and cross-boarder travel restrictions resulted in a significant number of lost shifts and impacted the availability of critical skills, equipment and parts and spares onsite. Extreme weather conditions, intermittent external power supply and operational challenges in both mining and treatment, including, equipment and critical spares availability, and extended downtime contributed to the challenging working conditions encountered during the year.

The impact of COVID-19 (both personally and at work) together with the challenged mentioned above, had a direct impact on the well-being of our workforce and is reflected in the frequency of safety incidents experienced at Letseng, in the first half of the year. Following a robust safety performance in 2020 and in line with our commitment to zero-harm, leadership immediately halted all operations for 24 hours in June, an unprecedented step, to understand and safety onsite.

During the 24hour “Stop for Safety” campaign, multiple engagement sessions were held with the entire workforce, led by Group, mine and contractor executives and senior operational and safety management. These intense sessions provided the platform to re-establish our commitment to and focus on safety as the absolute priority for the Group. Following four LTIs recorded at Letšeng in the period leading up to the “Stop for Safety” campaign we saw a significant improvement in the safety culture onsite with increased ownership for safety demonstrated by the entire workforce.

The increased focus on safety in 2021, and interventions taken, was in line with an industry-wide response to al marked downturn in safety performance, understood to be as a result of the impact of COVID_19 on mental health and fatigue. We therefore appreciate that our workforce is not aline in experiencing the continuing negative effects of COVID-19 on mental health which directly impacts on both safety and operational performance. We remain focused on mining safely and responsibly and cultivating a culture of zero harm and responsible care.

We continued regular engagement forums with our workforce to reinforce the safety-first programme to provide  feedback on all  matters and concerns raised by the workforce in the “Stop for Safety” engagements.

To support the renewed focus on safety culture within the organisation, we commissioned independent safety specialists to conduct a Group-wide safety perception survey to benchmark the maturity of our safety culture and identify opportunities to improve performance. The outcomes of the safety perception survey and subsequent workshops have informed our 2022 safety performance agenda and a safety specific leadership coaching programme.

As mentioned 2021 presented many challenges, in particular those related to COVID-19, however management’s focus in dealing with these challenges are indicative to the Group’s commitment to ensuring that operations were able to continue in a safe and responsible manner.

What were the most material operational trade-offs that Gem Diamonds had to make in 2021?

Reflecting on 2021, four  trade-offs come to mind:

The 24-hour Stop for Safety campaign  was a drastic but necessary intervention. I am proud of our commitment to safety in that, notwithstanding lost production we continue to drive a culture of zero harm that at all times puts the safety of our people first.

The second trade-off was the decision to reduce ore feed through the PCA to protect the stability of the infrastructure while development of the new PCA is taking place. This resulted in reduced plant throughput.

Extreme weather and grid instability in Southern Africa can cause unplanned power outages which result in prolonged downtime of our processing plants and other infrastructure at Letšeng. To reduce operational downtime, the operation improved our generator-based power strategy, which enabled us to keep operating but increases diesel consumption on site.

The significant increase in rainfall and consequent availability of freshwater allowed us to defer of a capital project to expand the freshwater catchment area at Letšeng. However, we remain aware of the long-term risk of water shortages in the region and will manage our shared water resource responsibly.

A longer-term strategic trade-off currently under consideration is the trade-off between the next cutback in the Satellite pipe and an early access underground mining project. As a result of the extended availability of Satellite pipe ore to 2025 from pit optimisation and pit slope steeping, a decision was taken to delay the commencement of waste mining for the next open pit cut back in the Satellite pipe to 2024. During this time, we will be assessing the feasibility of an early access underground mining project, initially for the Satellite pipe but with consideration to access the Main pipe at a later stage and after the end of life of its open pit. Delaying the commencement of waste mining in the next cut back in the Satellite pipe, and potentially substituting it with an underground option, will significantly reduce waste-associated mining costs in the short term, only to commence at a later stage or alternatively be substituted by underground capital investment.

These trade-offs tie into our continued drive towards optimisation and efficiencies, as well as ensuring sustainability and progressing on our decarbonisation strategy. Decarbonisation will be front of mind in all stages as we investigate the feasibility of the underground and other operational projects.


How have sustainability, decarbonisation and climate change goals been integrated into operational strategy and implementation?

Our operations are located in regions that frequently experience extreme weather events and the Group has been managing the impacts of extreme weather since operations commenced. During 2021, the focus on both the physical and transitional risk of climate change strengthened our resolve and commitment to address climate change holistically and integrate our sustainability, decarbonisation and climate change goals into our business, financial and operational strategies.

We have incorporated our sustainability and decarbonisation objectives into our current and future planning and strategy, where related opportunities and trade-offs have become a routine part of our planning discussions at all executive and operational levels of the business.

Projects are planned and rolled out in a way that considers our environmental and climate-change impact while ensuring resilience for future climate scenarios. This has become an integral part of our strategic approach, planning and mindset. We continue to assess and implement opportunities throughout the operations to improve our resource use efficiencies and to reduce our reliance on grid and fossil fuel energy. This approach of introducing renewable energy sources is integral to all  project planning going forward. Examples of projects implemented during 2021, using this approach, are outlined in the environmental section.

The climate change scenario analysis conducted in 2021 has further informed our risk analysis and planning. We are acutely aware of the challenge in achieving sweeping progress and balancing the reality of our operating context including our scale, location and the dependence on fossil fuels in sub-Saharan Africa. We however remain focused to continuously improve our ability to operate efficiently and sustainably within these evolving constraints.

Following an extended drought period in recent years, Letšeng’s focus in 2021 was on improving water resource use efficiencies through optimised treatment process planning and water conservations measures. This included changing the way we manage stormwater run-off, capturing and directing both fresh and process water as well as enhancing our water management engineering controls. This focus has resulted in 78% of our process water use at Letseng being recycled.

We advanced our nitrate management strategy by implementing improved technology within our bioremediation pilot plant and successfully concluded the trial phase of the bioremediation project showing remarkable nitrate removal rates. During 2021 we completedseveral nitrate related studies, such as leachate trials, and the findings of these studies will inform both our short- to medium-term water and nitrate management strategies as well as long-term rehabilitation plans.

What will the Company’s operational focus be in 2022?

In 2022, we will be implementing strategic projects including the replacement of the PCA, the construction of the bioremediation plant and furthering the underground studies. The business transformation initiatives implemented over the past few years have  been sustainably embedded  and we continue to explore opportunities to  improve  and optimise our operational efficiencies. In line with this, we plan to further reduce waste mining by expanding the steeper slope options following the successful trials in the satellite pipe.

Underpinnin g all strategic projects is our commitment to meeting our sustainability and decarbonisation objectives. The sustainability and climate change work undertaken in 2021 will  inform how we advance our environmental stewardship goals, strengthen our resilience against the impacts of climate change and mitigate our operational impacts on the environment. Water management at Letšeng will focus on safeguarding access to water, both at the mining operations and for our other stakeholders in the region. This is particularly relevant considering the likely impact of climate change, which includes an increased probability of sporadic localised flooding as well as  extended periods of drought. I look forward to the commissioning of  our bioremediation plant at the end of the year to expanding our wetlands programme in and around the mine.

We remain committed to our goal of zero harm and are focused on continuously improving on our safety performance and maturing the organisational safety culture through targeted initiatives and interventions.

Lastly, any closing thoughts?

Following the challenging year, I am proud of the resilience and determination shown by our entire Gem Diamonds team to ensure that our operations were able to continue in a safe and responsible manner while overcoming operational and personal challenges largely brought on by the continuing impacts of COVID-19. I would like to thank the Board and Executive for their continued support through the year.