Financial and operational
Our holistic approach to business performance integrates our sustainability principles and daily activities to uphold our social licence to operate, generate fair returns for our shareholders and sustainable value for all our stakeholders.
Related sustainability principles
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Prioritising the development and well-being of our employees
Related UN SDGs
We launched the first rolling three-year cycle to embed the UN SDGs into our systems, processes and decision-making during the year. The following UN SDGs relate to our financial and operational pillar:
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Refer to our Annual Report and Accounts 2021 and Our Approach to Climate Change Report for more information on our approach to integrating these UN SDGs into our business operations.
Snapshot of our performance
Our challenges
Our future
For more information, refer to the Annual Report and Accounts 2021.
Our context
As our operating context remains challenging, we need to ensure business continuity throughout the pandemic to generate strong revenues, protect the viability of our operations and ultimately create shared value for our stakeholders. In addition to revenue generation, our success as a business depends on our ability to optimise our operations and effectively manage costs.
In 2021, mining operations were able to continue without COVID-19-related shutdowns. The diamond market improved significantly. This context of the continual mining operations and the improved market sentiment resulted in an improved revenue and profit achieved in the 2021 period, although the average price achieved was lower mainly due to fewer large diamond recoveries.
Our approach
Our strategic focus on extracting maximum value from our operations prioritises production, value realisation, improving efficiencies and reducing costs. We continue to look for further opportunities to minimise diamond damage during recovery through investment in innovative technology development.
Our performance
Our context
We operate in a long-term, capital-intensive industry that requires funding to meet daily operational requirements and investment in capital projects. Optimising our cashflow and maintaining cash reserves has always been a priority and has supported the resilience of the organisation.
Our approach
Selective capital deployment, prudent cash flow management and strong relationship management with all our stakeholders, including our funders, are among our measures to protect and strengthen our balance sheet. Capital projects are assessed against long-term growth goals and funding availability.
By creating sustainable financial returns, the Group can continue to sustain current operations, maintain a sustainable dividend policy and invest to prepare for the future.
Our performance
Refer to the Chief Financial Officer’s Review in the Annual Report and Accounts 2021 for more information.
Our context
The popularity of synthetic diamonds is attributed to consumers’ perceptions of conflict diamonds and their preferences. We therefore protect the premium quality of our brand by embedding the highest corporate governance and ethics standards in our organisation.
Demand for Letšeng’s large, high-value diamonds continues to be strong and competition from laboratory-grown diamonds has yet to be seen at this end of the premium market.
Our approach
We vehemently oppose the global trade in conflict diamonds and its impact on political stability, human rights and the legitimate global diamond trade. Our diamond exports comply with the Kimberley Process and Gem Diamonds participates in the Gemological Institute of America’s Diamond Origin programme, which provides consumers with information about the country of origin of their diamonds as well as the positive impact the mine and the broader diamond industry have on the communities and countries in which they operate.
All Gem Diamonds customers, who trade with us by invitation only, are screened using anti-money laundering protocols and 'know your client' reviews to ensure compliance with regulatory requirements.
The Group is committed to ethical business practices and regards good corporate governance as essential for long-term value creation. Workplace safety is also an absolute priority – we constantly improve our safety systems and processes. The Board is committed to environmental sustainability and Gem Diamonds’ inclusion in the FTSE4Good index recognises the high standards of environmental, social and governance practices.
Our performance
For more information on how we ensure the integrity of our value chain, refer to the Annual Report and Accounts 2021.
Our context
Security and theft remain inherent risk considerations due to the high value of diamonds. From mining and extraction to selling our product, we ensure meticulous care and secure handling of our diamonds with the highest standards of ethical conduct to protect our premium brand.
Our approach
We continue investing in risk mitigation measures and management processes at our facilities to protect the safety and security of our employees, customers and product. Our operations thoroughly assess their risk profiles, and regularly engage with specialists to keep abreast of technological advancements and methods to address vulnerabilities in our processes, practices and systems.
With respect for human rights, our security personnel and key employees are trained to apply and act in accordance with good practice guidelines.
Our performance
Our context
Our operations are exposed to global risks and uncertainties that could harm the Group, including political instability, financial market uncertainty, the residual impact of COVID-19 and its resultant economic downturn, the financial implications of climate change and the effect of currency volatility, among others.
In addition, the diamond industry is affected by several uncontrollable factors, including price and demand, inventory levels, changing consumer preferences and product substitution. Although medium-to long-term demand is expected to outpace supply, there is a direct impact on our cash flows and our ability to fund operations, projects and growth plans in the short term.
Our approach
The Group proactively identifies, manages and mitigates risks and uncertainties to avoid financial, operational and compliance impacts on our performance, reputation and long-term growth. We employ appropriate governance and oversight in our comprehensive risk management framework (outlined in the risk management section of the Annual Report and Accounts 2021).
Our performance
Refer to the Annual Report and Accounts 2021 and Accounts risk management section for more information.