HOW WOULD YOU DESCRIBE 2022 FROM A SUSTAINABILITY PERSPECTIVE?
This past year has seen significant progress on the integration of sustainability into our everyday business and operations.
Our focus and effort in maturing our safety culture over the past few years has paid dividends with a much improved safety performance in 2022, recording only three LTIs (2021: six). Our target, however, remains “zero harm”, so we will continue with our organisational safety culture work to continually improve and drive our safety culture across the operations.
In 2022 we experienced a significant increase in electricity supply interruptions at Letšeng, primarily as a result of increasingly
frequent and longer periods of load shedding by Eskom, South Africa’s power utility. This required an unprecedented increase in
the use of our diesel-fuelled generators to power the treatment plants, accommodation blocks, clinic and other necessary site
infrastructure, which materially increased our diesel consumption during the year. At the same time we were impacted by a
global rise in inflation and energy costs following Russia’s invasion of Ukraine. The significant increase in the cost of diesel
together with the increased usage of our diesel generators materially impacted our costs. The more frequent load shedding
caused repeated shutdown-related interruptions to plant, generator and equipment performance, causing greater wear and tear,
requiring more frequent maintenance and introducing an increased risk of equipment breakdowns. In the circumstances,
consistent and stable supply of power has been elevated to our highest risk and will continue to receive prioritised focus and
attention in 2023.
Pleasingly, our continued focus on opportunities and initiatives to improve operational efficiencies to reduce our costs, energy
consumption and carbon emissions played a significant role in our ability to manage the impact of increased load shedding and
diesel cost. This focus reflects the maturing of the Group’s mindset and culture. We are proud of the fact that with the initiatives
implemented in 2022, in particular those related to reduced waste and shorter haulage distances, we managed to reduce our
carbon emissions despite increased diesel use and persistent interruptions to the electricity supply.
We constantly work to improve our reporting and governance systems to enhance trust and transparency and instil a sense of
ownership in the organisation and for our stakeholders. These efforts are paying dividends in our ability to identify, plan and
implement innovative and value-adding initiatives that contribute significantly to our goals of reducing costs and our carbon
footprint. Our three-year roadmap to full implementation of the TCFD recommendations remains on track, with phase 1 and
phase 2 objectives being met in 2021 and 2022, respectively. Phase 3 objectives to establish clear metrics and targets for
monitoring and managing our exposure will be delivered in 2023. The awards we won for our work on water management,
biodiversity offsetting, health and safety, and climate reporting, are gratifying acknowledgements of our work and the degree to
which we have long prioritised these activities.
After a challenging four-year drought at Letšeng which ended in 2021, the continued increase in rainfall in 2022 has been a
windfall in terms of augmenting our available water supply. Mothusi, our freshwater dam, now has freshwater supply for
approximately nine years at current usage rates. However, the significant precipitation poses additional challenges for the
management of our tailings facilities, freshwater storage capacity and stormwater management. I am pleased that our focused
work over the past two years in improving stormwater management systems, and our ability to manage water levels at our TSFs
and effectively pump water out of the pits and elsewhere, placed us in a good position to effectively manage these challenges.
Our relationships with our stakeholders are paramount to, and safeguard, our licence to operate, and we take our responsibilities
in this regard seriously. Elections in Lesotho in October 2022 went smoothly, and we maintain productive relationships with the
newly elected national Government of the Kingdom of Lesotho. As the COVID-19 pandemic receded, we ensured that we adapted back to normal life and operations safely and responsibly. We continue to provide occupational health therapists and
counselling on site for use by staff who feel they need the support – the mental wellness initiatives we implemented have proven
valuable as part of our greater occupational health programmes.
HAVE THERE BEEN ANY CHANGES TO GEM DIAMONDS’ APPROACH TO SUSTAINABILITY OVER THE PAST YEAR?
There is an increased expectation from organisations operating in the extractives industry to prioritise governance and sustainability, and we believe we have delivered on those expectations.
Our focus in 2022 has been on further integrating sustainability thinking into all levels of our business, and I am pleased to see
such significant progress in this regard. Safety, energy, water management and decarbonisation were our primary focus areas in
2022 and I foresee this continuing into 2023. We remain fully committed to our work to encourage and preserve biodiversity,
reduce waste, and communicate and collaborate with our communities.
WHAT WERE YOUR FOCUS AREAS IN 2022?
The past year’s focus has predominantly been on ensuring the consistency and managing the cost of our energy supply, as it is
increasingly clear that there will be no quick or easy fix to the spiralling crisis at Eskom.
There is a strong synergy between our energy use reduction and energy-efficiency work and our decarbonisation strategy. Lower
energy consumption, be it grid or fuel, through better and more efficient products and processes, reduces both costs and carbon
emissions. In 2022, we drove these synergies more fully into our thinking, frameworks and governance structures, and
operational processes at every level of the Group. We held several workshops with the Gem Diamonds and Letšeng Boards to
discuss the challenges we face in this regard, the range of solutions we are considering, and the strategic objectives we must
drive to implement these solutions.
Water management also remained a primary focus in 2022. Two years ago, we came to the end of an extended drought and were concerned about water availability on site. Our main freshwater dam fell below 30% capacity during the drought, becoming a material risk to continued operations. Due to high rainfalls in 2021 and 2022, we paused our dam augmentation plans as Mothusi filled to 95% capacity at the end of the reporting period. The contrast between our situation three years ago and today is a sharp reminder of the complexity of operating in such a dynamic environment and the potential impact of climate change in the years to come. Fortunately, we are well served by the many years of hard work we invested in our stormwater, water control and water management systems and our focus on ensuring that water is appropriately managed as a scarce and valuable commodity.
From an environmental perspective, we continue to closely monitor nitrate levels in water that leaves our mine site. Our pilot bioremediation plant produced excellent results in the treatment of water with high nitrate levels, and we have worked hard to complete the design of, and secure an appropriate site for, a larger plant to be commissioned for the treatment of water in 2023.
We also implemented operational measures to reduce the potential of nitrates entering the environment, including improving the combustion efficiency of explosives. These initiatives, alongside improved stormwater management procedures, further reduce the impact of nitrates in water that could leave our site.
Safe and effective tailings management remains a priority and our commitment remains to fully implement the applicable
recommendations of the GISTM by Q2 2023. To ensure we meet our goals, we appointed two leading, internationally respected
external consultants in tailings safety and management to our Tailings Review Board, which meets regularly with the Tailings
Management Committee to ensure that tailings management safety, reviews and actions are well guided, monitored and
Refer to the Operations review of our Annual Report and Accounts 2022 for a case study on our tailings management responses.
PLEASE DISCUSS GEM DIAMONDS’ CSI ACTIVITIES AND APPROACH TO PARTNERSHIPS
Our approach to community projects is informed by our goal that these projects become sustainable without ongoing support from Gem Diamonds. To achieve this, we recognise the value of partnering with non-governmental organisations (NGOs) that are properly equipped to guide and train communities on the skills they need to manage sustainable businesses.
These learnings arose directly from the devastating impact of COVID-19 on small businesses in our PACs. When the pandemic hit,
our dairy and vegetable projects were in the process of being handed over to the community structures that would manage
them going forward. While the pandemic resulted in 18 months of lost business, it also highlighted the need to further support
the project managers through extended handover periods by means of focused skills training and business incubators.
Pleasingly, we have already started seeing the results of these partnerships. The dairy project reworked its entire production
strategy to reduce its reliance on inputs and increase its production quantities. This resulted in developing a refined five-year
handover model, involving partnerships with NGOs and subject matter experts to better prepare communities for the ongoing
running of their businesses.
HOW ARE GEM DIAMONDS’ CSI ACTIVITIES LINKED TO ENVIRONMENTAL AND GOVERNANCE CONCERNS?
We foster mutually beneficial relationships through frequent, transparent and mutually respectful engagement, aligned with a robust governance structure that has the necessary flexibility to allow for timeous responses to adverse events.
We are committed to the UN SDGs, and in 2020, developed and implemented a three-year SDG programme (adopting six UN SDGs), which we have successfully completed. The new year allows us to re-examine our SDG priorities as we continue to actively integrate the SDGs into our operations, projects and planning. Our CSI strategy, for example, requires any new project to contribute positively to at least two SDGs. All our relevant SDGs are well understood within Gem Diamonds and inform how we work and do business.
WHAT OPPORTUNITIES FOR IMPROVEMENT CURRENTLY PRESENT THEMSELVES?
The current energy supply crisis, combined with our decarbonisation and cost optimisation goals, provides an opportunity to align the business with sustainable energy solutions. Towards the end of 2022, we began a comprehensive eight-week power-usage study to better understand what we can practically take off the grid by introducing renewable or alternative energy or a hybrid thereof.
In addition, the good progression of our bioremediation plans will contribute to a positive environmental impact, as evidenced
by the pilot plant.
We continue to improve our organisational safety culture work, mature our safety culture, and keep our safety drive consistent.
Our ultimate goal is zero harm, and there are always opportunities for improvement.
WHAT ARE YOUR FOCUS AREAS FOR 2023?
The focus for 2023 will be our continued adaptation to the uncertain supply and rising costs of energy. We will drive our
emissions reduction and energy efficiency objectives as we continue to explore renewable energy solutions that are suited to our
unique operating context and in line with our decarbonisation strategy.
From a water management perspective, we will focus on stormwater, bioremediation and quality management, while maintaining a world-class management framework for the safety of our tailings facilities.
Finally, we will continue to maintain constructive, mutually beneficial relationships with our host nation and neighbouring communities.
I would like to thank the Board and the Sustainability Committee, in particular Mike Brown, for their input and support over the year. With this support we are able to successfully drive the integration of sustainability into all aspects of our business. Also, to my fellow executives and senior managers and all those at the operations, thank you for the support, hard work and focus on identifying, assessing and implementing value adding initiatives that have had a positive impact on safety, costs and decarbonisation. It is a privilege to work in a company with people who are passionate about and fully committed to a sustainable future.