Sustainable Development Report2010

• GRI Indicators
• Print
• Email

Environmental performance

Petra Diamonds is committed to the sound environmental stewardship and the rigorous environmental management of our operations and related activities within our area of control and influence. The Group implements environmental management and auditing systems based on good practice.

Managing and mitigating environmental impacts

As a minimum, Petra adheres to the environmental laws, regulations and permits associated with diamond mining activities in the countries in which it operates. In particular, the Mineral Resources and Petroleum Development Act ("MPRDA") of 2002 and the National Environmental Management Act (NEMA) of 1998 in South Africa are both used to guide practice, as well as international best practice standards. The applicable legislation in Tanzania is the Environmental Management Act (EMA) of 2003 and the Mining Health and Safety Act ("MHSA") of 1998, as well as its regulations of 1999.

As is required by legislation in both South Africa and Tanzania, each operation has an Environmental Management Plan ("EMP") in place. This plan has been informed by legislation and the specific circumstances surrounding that operation as well as public participation, where this is required. These EMPs are legally binding documents that have been submitted to the regulatory authorities, and performance against these is regularly reviewed.

As is required by law in South Africa, closure liabilities have been estimated for all operations. This is based on the cost to rehabilitate land should all mines cease to operate immediately, which is a very unlikely scenario. Financial provisions have been made in the form of bank guarantees and/or insurance and these have been submitted to the DMR.

In FY2010, Petra announced that it had agreed terms with the International Finance Corporation("IFC") (a member of the World Bank Group) with regards to new debt facilities of US$40 million to be used to finance the expansion of the Williamson mine in Tanzania. The IFC demands stringent standards in the areas of environmental stewardship and corporate social responsibility when seeking to form a partnership with a mining project, and its decision to fund the Williamson mine demonstrates that this project offers exceptional socio-economic benefits to the local communities and the country of Tanzania as a whole.

As part of Petra’s commitment to the IFC, the EMP for Williamson is currently under review to include the identification of compliance points and physical, chemical and biological target limits for the operation. This review is due to be completed by the end of 2010 and is being managed by local consultants based in Dar-es-Salaam.

While environmental management at an operational level is the responsibility of the operational management team, a corporate-based environmental coordinator ensures compliance, as well as the implementation of plans to meet the Group's strategic objectives. Petra's Environmental Policy guides the Group's conduct.

In South Africa, an audit of environmental performance is undertaken every second year in support of the Group's mining rights. These performance assessments are submitted to the authorities for review and discussion. In Tanzania, Williamson's EMP is required to be reviewed every five years.

An Environmental Management System ("EMS") has been developed to ensure compliance with the EMPs at Cullinan and Williamson, and this is being developed for the other operations. These EMSs are broadly aligned with ISO14001 and will only be in place once the employees at each mine are fully trained. Training started in FY2009 and continued in FY2010 at the Kimberley Underground and Koffiefontein mines. A new environmental officer was appointed in February 2010 at Kimberley Underground tasked with the development and implementation of an EMS in order to obtain ISO 14001 certification within the next two years. EMS training at Williamson had been delayed due to the EMP review in progress, but is due to commence by the end of 2010. The fissure mines will not be included in the EMS at this stage.

Environmental performance

While environmental risks and impacts vary from operation to operation, and region to region, the primary environmental concerns for the Group are water and energy conservation, optimising resource usage and waste management, biodiversity and closure management. Petra ensures that constant measurement and monitoring of key characteristics take place in order to prevent potential pollution and to mitigate actual pollution to air, land and water. Underlying the Group’s approach is that it will deal with stakeholders openly and transparently on environmental matters and performance.

In terms of environmental performance, the Williamson mine excelled in FY2010 further to exceptional work on re-forestation of the Mwadui area. The mine was selected as the district and regional winner in the annual “Presidential Award on Forest Management and Water Source Conversation”.

There were two significant environmental incidents recorded during FY2010. At Cullinan, the electrical cables supplying electricity to the pump station at No 2 pollution control dam were stolen on a number of occasions leading to an overflow of the facility, which is a legal non-compliance. The cables were then replaced and buried to reduce access. Early warning devices were also installed to alert security of any tampering with the cables. In addition, regular security patrols are now carried out in the area.

At Koffiefontein, there was a diesel spillage which was cleaned up quickly and efficiently. The situation is being closely monitored to avoid further spillage.

Water management

Water is a scarce resource in Africa and this scarcity may be intensified in the future in the Group's areas of operation by climate change and increasing pressure on limited resources. Water management and the prevention of its pollution are therefore key concerns for the Company.

The diamond mining industry involves water-intensive processes that allow diamonds to be liberated from the host rock. The most significant potentially polluting process is the crushing of the kimberlite ore during which dust is generated. This dust gets trapped in the water and is referred to as suspended solids. The contaminated water is pumped into settling or slimes dams where the suspended solids sink to the bottom. The clean water is then recycled back into the system through penstocks or pump stations that are situated at the top of the water level in the dams. This is as much a cost-saving initiative as it is an environmental imperative. Importantly, no harmful reagents are used to liberate the diamonds. Iron silicate is used in the processing of kimberlite ore as this assists with dense media separation (to separate diamonds from the rock). This is reclaimed, however, and not released into the environment, again for both environmental and cost reasons.

Water usage is continuously monitored via a water balance at each of the Company's operations and is considered a critical part of the successful operation of each mine and plant.

South Africa:

In South Africa, Petra is registered with the Department of Water and Environmental Affairs (DWEA) as a water user. The next step to legal compliance is to obtain Integrated Water Use Licenses for each of the operations from the DWEA that govern water usage and discharge into the natural environment.

In-house water monitoring systems are in place at Cullinan, Kimberley Underground, Koffiefontein and Williamson. This service is out-sourced to a consultant at Helam, Star and Sedibeng, and undertaken on a quarterly basis. Only SANAS accredited laboratories are used for water analysis.

Other than at Cullinan, where the results showed periodic non-compliance to general water standards, there were no issues during FY2010. In response, Cullinan is building additional containment dams (sumps) to route contaminated water back to the operation before it reaches the natural water bodies.

Water for use by operations has various sources:

• At Cullinan, underground water is pumped into a reservoir from where it is extracted into the closed water system that runs through the plants. All water released by the plants runs into sumps where it is pumped back to the Fine Tailings Facility known as No 7 dam. The mine runs a closed circuit water reticulation system that recycles all water from No 7 dam. Any discharge from the mine into the water courses is closely monitored and carried out in line with permits.
• At Koffiefontein, water is withdrawn from underground, as well as from the Kalkfontein dam, which is located 25 kilometres from the mine. The water from the dam is pumped directly into the Koffiefontein dam through a concrete canal. The underground water, as well as the recycled water from the slime dams, goes to settling dams from where it is pumped to the raw water dam for use in the mine. Only water required is pumped from the Koffiefontein dam to the raw water dam and eventually all surplus water on the mine goes back to Koffiefontein dam via the settling dams.
• In FY2010, water from the Bultfontein and Dutoitspan mines at Kimberley Underground was sent to the new Brandt’s dam on Kimberley Underground property, from where it is pumped to the mine’s joint shaft plant.
• At Star, Sedibeng and Helam, underground water that ingresses into the operations is pumped to surface for use by the operations.
• A small volume of potable water is used for domestic purposes and sourced from local municipalities for Cullinan, Koffiefontein and Kimberley Underground. Helam and Star use filtered borehole water for potable purposes. At Sedibeng, a chlorinator was installed during the 2010 financial year.

Tanzania:

In Tanzania, Petra is licenced under the Ministry of Water and Irrigation, which issues water rights, and acts in compliance with the “Water Resource Management Act, 2009”.

Water monitoring was carried out twice during FY2010 at Williamson and the samples were found to be in compliance with national as well as World Health Organization (WHO) standards. A water quality consumer confidence report is compiled annually. All domestic sewage from the operation is processed by local municipalities.

The Williamson mine sources its water from the Songwa, New Alamas and Nhumbu dams. There is a closed circuit water system and no water is discharged into the environment.

As part of the commitments made to the IFC, Williamson will conduct a hydrological investigation to identify ground water flows and prepare a water balance to equip the mine for sustainable water utilisation. Completion of this project is scheduled for March 2011.

Total water withdrawn from a resource – all operations

	2010
Mine	Municipal (m3)	Ground water (m3)	Total	% Recycled
Cullinan	404,078	303,864	707,942	99
Koffiefontein	102,210	1,032,420	1,134,630	99
Kimberley Underground	60,248	3,424,447	3,484,695	0
Helam	Borehole	250,000	250,000	95
Sedibeng	Borehole	1,009,152	1,009,152	55
Star	65,594	21,864	87,458	10
Williamson	Dam	Dam	3,799,845	30
	2009
Mine	Municipal (m3)	Ground water (m3)	Total	% Recycled
Cullinan	391,833	319,518	711,351	99
Koffiefontein	51,200	1,034,835	1,086,035	99
Kimberley Underground	39,780	1,175,852	1,215,632	0
Helam	Borehole	250,000	250,000	95
Sedibeng	Borehole	750,000	750,000	95
Star	borehole	250,000	250,000	95
Williamson	Dam	Dam	4,192,846	28

Total water usage by the Petra group in 2010 was 10,473,722m³ (2009: 8,455,864m³), an increase of 24%. The main reason for the increase was the ramp-up of operations at Kimberley Underground, where a new plant was commissioned and operational by June 2010.

As far as possible, water is maintained in a closed circuit. When absolutely necessary, water is discharged into the natural environment in line with permits.

Total water discharged in 2010

	Quality	Destination	Amount allowed to be released (m3)	Actual amount released in 2010 (m3)
Cullinan	10-100% wastewater	McHardy Spruit, Premiermynloop	365,000 per annum - McHardy Spruit 2,886,000 per annum - Premiermynloop	357,588 - McHardy Spruit 263,444 - Premiermynloop
Koffiefontein	n/a	Upper Orange	No permit yet, but the process to obtain a water use license was recently initiated.	None
Kimberley Underground	n/a	Lower Vaal	On De Beers permit; the application for a water use license was recently submitted.	n/a
Helam	10-100% wastewater	Crocodile (w) Marico	None	None
Sedibeng	10-100% wastewater	Ghaap Escarpment	None	450,000
Star	10-100% wastewater	Middle Vaal	None	None

* Koffiefontein and Helam do not release water as they have closed water systems.
* Kimberley Underground sells 80,000m³ of underground water to De Beers Consolidated Mines for it to use.

Energy consumption and greenhouse gas (GHG) emissions

Petra’s energy consumption is primarily electricity sourced from the national energy utility in South Africa, Eskom; and from Tanzania’s National Electricity Company, Tanesco, at Williamson. The Mwadui power station, which is owned by and located at Williamson also generates power.

Energy consumption (000 KWh)	2010	2009
Energy from electricity generated (Tanzania)	1,068,600	1,332,680
Energy from electricity imported (TANESCO)	23,596,330	27,130,780
Energy from electricity purchased (SA)	213,533,710	222,913,576
Total energy consumption	238,198,640	251,377,036

Energy conservation was a major focus for Petra in FY2010 and, in line with the Group’s energy optimisation programmes, a range of initiatives were undertaken at each operation.

Further to the issues with energy supply in South Africa in 2008, Petra has installed generators at all its operations and managed to reduce Group energy consumption without compromising production or safety levels. All operations have been fitted with energy saving bulbs and security lights fitted with day/night switches as an energy saving measure, as well as to decrease operational costs. In Cullinan, there was a surplus of energy saving light bulbs, which were then distributed to mine employees for use in their homes.

Load scheduling has also been introduced to ensure that some machinery is only operated during off-peak times to ensure energy efficiency. Various other energy saving and cost reduction initiatives are being identified for implementation in FY2010.

Creating awareness on climate change

Training plays an important role in creating awareness on climate change and employees are encouraged to switch off lights when leaving a room as well as turning off computers at the end of the day as an energy saving measure.

Williamson participated for the second time in the earth hour in March 2010 by switching off all lights for one hour in an initiative to combat global warming. In addition, Williamson rented a pavilion and provided logisticial support to the Kishapu District during the World Environmental Day celebrations.

Petra has opted for a teleconference facility to reduce employees' road travel to meetings in line with this initiative, as well as to reduce carbon emissions. To further reduce indirect energy consumption, arrangements to visit mines are done in collaboration with other employees so that two or more drive together in one car. This significantly reduces carbon emissions and eliminates the need for air travel.

Recruitment is also primarily from the local communities in which the operations are situated, in line with Petra's Social and Labour Plans. This greatly reduces the distances employees are required to travel to and from work, contributing to lower carbon emissions. Communal transport (buses) is provided for employees at Star and Sedibeng, as well as accommodation at Helam, Star and Koffiefontein in this regard.

Materials usage

The primary materials used by the Company in the production of diamonds are: timber, steel, fuel and lubricating oil. The efficient usage of materials forms part of Petra’s environmental management programme. The increase in materials used, as reflected in the figures below, is attributed to the Kimberley Underground mine coming on line, as well as the ramp-up of other operations to higher production rates. Steel usage significantly increased as a result of plant upgrade projects at Cullinan and the construction of a new plant at Kimberley Underground.

Material by weight or volume	2010	2009
Timber (000 kg)	873	347
Steel (000 kg)	1,151	265
Fuel (000 /)	5,405	3,783
Gases (000 kg)	594	401
Lubricating oils (000 /)	577	266

Land management, biodiversity and closure

Disturbance of the land on which its operations are located is the most lasting and visible environmental impact of diamond mining. All of Petra's mining activities take place on brownfields operations acquired in an already disturbed state. A key objective of the Group is therefore the rehabilitation of land to appropriate land use where this is possible.

South Africa:

There are no protected areas in close proximity of Petra's South African operations. Dutoitspan in Kimberley was previously a non-perennial wetland, but is now a perennial dam filled with water and minerals owing to historic mining activity in the area. It is not considered a protected area.

An important part of Petra's environmental management strategy is the allocation of protected biodiversity parks for the protection of fauna and flora. In South Africa, 4,456 hectares have been allocated for this purpose, at Cullinan (1,549 hectares), Koffiefontein (1,780 hectares), Sedibeng (737 hectares) and Helam (1,390 hectares).

These game reserves are fenced to ensure a demarcation from the general mining area and are managed by committees. The committee at Cullinan is known as the Premier Wild Life Club whose members consist of present and past employees of the mine. The club’s committee includes a representative of present mine management. Star mine is situated close to an industrial conservancy which looks after the Theunissen area and this includes Theronskop and Lion Hill.

At Cullinan, EMPs are drawn up by the environmental team for any new activity that may have an impact on the environment. Biodiversity is monitored on the rehabilitation trials currently taking place on the No 7 dam wall.

There are a few specifically protected species and habitats at Cullinan. Here the Company uses a biological control process to eliminate alien and invasive species from natural habitats. This process uses the plants’ natural enemies to control and eliminate the spread of alien and invasive species, as opposed to the more common control through herbicides and cutting down of trees. These invasive plant species make use of water resources and also inhibit the growth of other indigenous plants. A total of 25 hectares of alien invasive vegetation were cleared during the past year.

In FY2009, an entirely new species of ant was discovered in an area surrounded by tailings dumps at Cullinan. The proposed name of the new ant species is Afroxyidris taemane (taemane is the seTswana for diamond). A follow-up survey in FY2010 on the diversity of ants at the operation revealed positive results and indicated that there are even more ant species present on the mine dumps than previously indicated.

At Koffiefontein, the rehabilitation of the Eskom tailings dump has started. The mine also has a project under way to remove alien vegetation; indigenous camel thorn seedlings have been germinated to replace alien and invasive species of flora and increase the natural biodiversity of the habitat.

Alien invasive species control was introduced at Helam. The alien invasive species are cut out and treated so as not to spread. The project will carry on until the alien species are completely controlled.

An environmental impact assessment ("EIA") was conducted in 2009 to establish the extent of the Group's mining activities at Kimberley Underground, with a view to planning the location of the Group's tailings facilities and rock dumps. Due to significant mining activity in the area over the last 120 years, the area is severely degraded with almost no natural habitat. In addition the Kimberley town has been built around the mining areas, further affecting the environment. Based on this assessment, current planning leans towards the establishment of a 'super dump' rather than numerous small dumps, as this will naturally have a smaller footprint.

Bunding is already in place at Cullinan, Koffiefontein and Kimberley Underground to contain leaks and spills from hydrocarbons and other potentially hazardous chemicals.

Tanzania:

Williamson has done exceptional work in the re-forestation of the Mwadui area and is proud of the natural forest which now exists here. Although the forest is under immense pressure from neighboring villages, that use its resources for food, fuel and construction, as well as cutting trees to clear space for agricultural crops, the mine protects it in an attempt to conserve it for future generations. The impact of this forest has been so profound that Jackal, Hyena, Reed Buck, Dik-Dik and many other species of smaller animals have returned to the sanctuary it provides.

The area in the centre of the Mwadui Township, which was previously a golf course, has been identified as an area that is to be proclaimed a conservation area. It is the intention to plant this area with only indigenous tree species. The area will be protected to allow for the influx of the wide variety of indigenous wild birds and smaller antelope species in the area.

The environmental unit at Williamson has also implemented a bee-keeping strategy. Hives are provided and bees are supplied for use in parks, gardens and for the forest. Bees and hives are supplied to surrounding villages as well, in an attempt to assist with the repair of the vegetation. Villages are also instructed in the harvesting of honey, to assist with the drive towards self-sustainability.

Williamson has created a Parks and Gardens Department, which is responsible for replanting trees, controlling invader vegetation species in the township areas and maintaining the parks and gardens in the township area.

As part of Petra’s Land Management Programme in Tanzania, Williamson maintains a nursery with a range of indigenous species including acacia, and exotic species. The nursery was expanded from 1,280m² to 3,335m² to increase its potential output and it now has the capacity to raise 500,000 seedlings annually.

The majority of the seedlings raised to date have been given to Williamson employees, the surrounding communities, and used in the rehabilitation programme. In FY2010, Petra distributed a total number of 68,646 seedlings in the region and 1,856 new seedlings were planted.

Due to its excellent work in this area, the mine was selected as the district and regional winner in the annual “Presidential Award on Forest Management and Water Source Conservation”. The certificate was handed over to Williamson during a public day ceremony that was held in the Meatu district on 8 August 2010 by Brig. General (Rtd) Dr. Yohana Balele Regional Commissioner for Shinyanga Region. Handing over the certificate, he said:

"Williamson Diamond Mine is the role model on forest management and water sources conservation. Shinyanga Region is proud of having Petra management at Williamson; they have been a great support in seedling generation and distribution in Kishapu and other nearby districts. Please keep it up!"

Protected species and Petra

None of the International Union for the Conservation of Nature (IUCN) Red List species and conservation list species with habitats in the areas affected by Petra's operations are threatened species. Some of the protected species within the Group's remit are:

• Aquila verreauxii (Verreaux's eagle), more commonly known as the black eagle. A pair of black eagles have been nesting in the main Koffiefontein opencast pit for many years now, feeding off the rock hyrax (dassies) that reside in the waste rock dumps. Black Eagles are not indigenous to South Africa but have settled into the habitat due to appropriate natural conditions. This species is classified by the IUCN as "least concern".
• Redunca fulvorufula - mountain reedbuck. The Reedbuck are located next to Star's mining operations within an industrial conservancy in the Theunissen area, and can sometimes be seen grazing on Theronskop. This species is classified by the IUCN as 'least concern'.
• Ceratotherium simum - white rhino. These white rhinos are classified as “near threatened” on the IUCN Red List and are located at the Cullinan game reserve.

Diamond exploration – Botswana

Petra operates a small but highly focused exploration programme in Botswana. The prospecting of diamonds is carried out through exploration diamond drilling to probe the contents of identified ore deposits and potential sites prior to operation. By withdrawing a small diameter core of rock from the ore body, geologists are able to chemically analyse the core and study the rock.

In Botswana, Petra provides a copy of its health, safety, environment, and community ("HSEC") policy to all staff and contractors, and routinely holds meetings prior to any field operation to discuss the HSEC policy and to ensure staff and contractors are committed to it. These meetings discuss field-operating procedures including ground geophysics, geochemistry and heavy mineral sampling programmes, travel and campsites. These procedures are documented and filed in the Petra office.

During FY2010, Petra conducted very limited ground follow-up of targets selected from previously acquired airborne magnetic data. All work was carried out within valid prospecting licences in accordance with the local law as decreed by the Department of Minerals, Energy and Water Resources. Petra further strives to perform better than the existing guidelines. An example of this is adherence to the Botswana Department of Wildlife and National Parks’ guidelines for conservation areas and game parks outside of officially designated reserves.

Petra aims to ensure that the impact of its activities on the environment is minimal and maintains a responsible and proactive approach to communication with local communities. For example, extensive effort is made to inform all local residents and interested parties of upcoming exploration programmes, be they airborne or ground-based.

The nature of Petra’s diamond exploration programme is largely driven by airborne studies such that its overall ‘footprint’ of environmental impact is small compared to more traditional diamond exploration programmes.