Business Transformation

At Gem Diamonds, we appreciate the role mining companies can play to make a meaningful impact in the areas where we operate. We also recognise that our business needs to be profitable and sustainable to secure the value we can contribute.

During 2017, Gem Diamonds embarked on a Business Transformation (BT) process aimed at enhancing operational efficiencies, improving performance and controlling costs. Our objectives also included maximising value from the operations and enabling delivery of sustainable returns, while optimising the benefit for communities and minimising our environmental impact.

Until recently, our BT process was primarily set up to measure performance in relation to the Company’s financial transformation. However, to fully realise the value of BT in our organisation, we needed to measure the impact on our sustainability performance too. While sustainability principles have always been embedded as a strategic pillar in our approach, we more recently recognised the value of measuring the impact of business efficiencies and improved financial performance on our sustainability performance.

Gem Diamonds defined six sustainability principles that the organisation considers critical in realising its strategy. These include:

As part of the BT process, we performed a high-level assessment to establish the continued relevance of these principles. We also created workstreams, focused on mapping the sustainability principles to BT initiatives, to identify impacts beyond the anticipated operational and financial benefits.

In each of the BT initiatives, we were able to identify sustainability impacts that we could measure in addition to operational efficiencies. To date, we have identified 92 initiatives that will yield both operational efficiencies as well as improved environmental performance. We also identified at least 10 BT initiatives that will optimise the benefit to our host communities.

For instance, resource efficiency is an example of a BT focus area that reduces the financial cost of mining but also results in environmental and community benefit. A recent World Health Organization study estimated that 4.2 million people die every year as a result of exposure to ambient air pollution. A reduction in our carbon footprint through a focus on reducing our resource consumption will, therefore, not only benefit the natural environment, but reduce the levels of air pollution exposure for our communities and employees.

During the year, Letšeng sought to improve the efficiency of mobile combustion by focusing on improving the efficiency of fuel use during loading and hauling activities through driver training and the use of a fleet management system. This served to reduce fuel consumption due to driver error, lessen service and maintenance requirements on the vehicles; decrease idle and queue time through improved loading and hauling scheduling, and minimise load spillage and wastage while increasing payload size by using greedy boards. At the same time, systems were implemented to improve road and tyre maintenance.

Furthermore, Letšeng employed several initiatives to improve both demand-side management and proactively reduce the high energy requirements for equipment start-up following a power failure. This was achieved through the implementation of an early warning system that would pre-empt power failures associated with extreme weather or grid instability. Generators would then be engaged to ensure that large, power-intensive infrastructure, such as our processing plants, would not shut down and thus require exponential energy input to start up again.

The above measures ensured that even though Letšeng had numerous factors driving increased energy consumption, such as a 6% increase in haul distance, additional staff on-site and greater usage of generators than 2017, the Group reported an energy efficiency improvement.

Looking ahead, Gem Diamonds will shift from a focus on business transformation to a continuous improvement mindset to secure the long-term sustainability of our business and, at all times, looking for innovative ways to generate value for all our stakeholders.