Environmental performance

Petra Diamonds places a great deal of emphasis on environmental stewardship and the rigorous environmental management of our operations and related activities within our area of control and influence. The Group complies with the environmental regulations in the countries in which it operates and implements environmental management and auditing systems based on good practice.

Managing and mitigating environmental impacts

Petra's adherence to South African environmental laws, regulations and requirements supports the Company's commitment to limiting the negative environmental impacts associated with diamond mining activities. In particular, the Mineral Resources and Petroleum Development Act (MPRDA) of 2002 and the National Environmental Management Act (NEMA) of 1998 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 (MSHA) of 1998 as well as its regulations of 1999.

As is required by legislation in both South Africa and Tanzania, each operation has in place an Environmental Management Plan (EMP). This plan has been informed by legislation and the specific circumstances surrounding each 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.

In South Africa, an audit of environmental performance is undertaken every second year in support of the Group's mining rights. In Tanzania, Williamson's EMP is required to be reviewed every five years and the next review will take place in 2010.

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. The EMSs will only be in place once the employees at the mines are fully trained. Training took place in 2009 and will continue in 2010 at the Kimberley Underground and Koffiefontein mines. The fissure mines will not be included in the EMS at this stage. These EMSs are broadly aligned with ISO14001. Williamson Mine has been certified as having been ISO14001 compliant since January 2008, with the most recent audit having taken place in September 2009.

While environmental management at an operational level is the responsibility of the operational management team, a corporate-based environmental co-ordinator ensures compliance, as well as the implementation of plans to meet the Group's strategic objectives. Petra's Environmental Policy (PDF - 25KB) guides the Group's conduct.

Only one significant environmental incident was recorded during the year. The incident involved an oil spill at Cullinan after an oil-cooled transformer caught fire following an electrical short circuit at the Fines Plant. The fire was rapidly extinguished with foam, although some transformer oil leaked from the damaged transformer and had to be contained. An absorbent boom was deployed to absorb any hydrocarbons and to contain the spill from reaching the drains. A peat moss product that repels water and absorbs oil was spread over the spill area and later collected into drums and stored as hazardous waste.

In Botswana, Petra remains aware of its impact on and responsibility to both the physical and social environment in which it operates, hence is fully committed to a holistic and proactive approach to Health, Safety, Environmental and Community (HSEC) cornerstones. In the light of these commitments, Petra has adopted HSEC policies that encompass local legislation and international best practice. Petra provides a copy of its 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 the reporting period 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. With regards to operating in the Central Kalahari Game Reserve, Sekaka personnel engage in detailed consultation with all affected parties.

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.

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.

Water management

Water in Africa is a scarce resource and this may be intensified in the future in the Group's areas of operation by climate change. 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 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 both for environmental and cost reasons.

Water usage is continuously monitored at each of the Company's operations and is considered a critical part of the successful operation of each mine and plant. Water monitoring systems that are monitored in-house are in place at the Cullinan, Kimberley Underground, Koffiefontein and Williamson mines; this service is out-sourced to a consultant at the Helam, Star and Sedibeng mines, and undertaken on a quarterly basis.

Water monitoring was carried out twice during the 2009 financial year 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.

In South Africa, Petra is registered with the Department of Water and Environmental Affairs (DWEA) as a water user. DWEA issues water use licences that govern water usage and discharge into the natural environment.

In Tanzania, Petra is licensed under the Ministry of Water and Irrigation, which issues water rights.

Water for use by operations has various sources:

• At the Cullinan mine, 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 into one of a number of dams. The mine runs a closed circuit water reticulation system that recycles all water, except the one that overflows from the No 2 pollution dam during periods of flooding. Any discharge from here into the watercourses is closely monitored and done in line with permits.
• At the Star, Sedibeng and Helam mines, underground water that ingresses into the operations is pumped to surface for use by the operations.
• 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.
• A small volume of potable water is used for domestic purposes and sourced from local municipalities for the Cullinan, Koffiefontein and Kimberley Underground mines. The Helam, Star and Sedibeng mines use filtered borehole water for potable purposes.

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.

Total water withdrawn from a resource

Mine	Municipal (m3)	Groundwater (m3)	Total	Percentage 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

Kimberley Underground – all water is sent to Dutoitspan, which is De Beers' responsibility.

Total water usage by the Petra group in 2009 was 4,263,018m³.

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. The Kimberley Underground operation sells the water generated from underground operations to the adjacent De Beers mine.

Total water discharged in 2009

Mine	Quality	Destination	Amount allowed to be released (m3)	Actual amount released in 2009 (m3)
Cullinan	10-100% wastewater	McHardy Spruit, Premiermynloop	3,488,000	495,227
Koffiefontein	no permit yet	Upper Orange	no permit yet
Kimberley Underground	on De Beers permit	Lower Vaal	on De Beers permit
Helam	10-100% wastewater	Crocodile (w) Marico	None	None
Sedibeng	10-100% wastewater	Ghaap Escarpment	313,560	None
Star	10-100% wastewater	Middle Vaal	41,760	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 their 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)	2009
Energy from electricity generated (Tanzania)	29 713 690 KW hours
Energy from electricity purchased (SA)	222 913 576 KW hours
Total energy consumption	252 627 266 KW hours

Following the electricity supply crisis in South Africa in 2008 and, in line with Petra’s energy optimisation programmes, a range of initiatives have been undertaken to conserve energy.

The South African mines were required to decrease their electricity consumption by 10% in the year under review in a bid to lower demand on the grid.

Petra has installed generators at all its operations and met this target without compromising production or safety levels.

As an energy saving measure, light switches have been installed underground at Cullinan and Star mines to ensure lights that are not in use are turned off. These mines also use energy saving bulbs as an additional energy saving measure, as well as to decrease operational costs. Similar plans are underway at the other company operations.

Various other energy saving and cost reduction initiatives are being identified for implementation in 2010. At the Williamson mine in Tanzania, an investigation is currently underway into the potential conversion of methane gas as a source of energy.

Petra is currently undertaking a review of its GHG emissions and its approach to climate change. Given that its operations are located in dry and largely rural areas in Africa, it can be expected that climate change could have a significant impact on communities at these operations and on the natural resources (such as water) available to the Company.

Materials usage

The primary materials used by the Company in the production of diamonds are: rock mined, timber, steel, fuel and lubricating oil. The efficient usage of materials forms part of Petra’s environmental management programme.