DesSoft Client - De Beers (Control and Instrumentation Engineering Software)

De Beers in South Africa 2009 and the future

More than 120 years of home grown

diamond experience

Dr Mark BerryDirectorDBsa

Investments in new production capacity include Voorspoed Mine, which opened in 2008. It is a ‘new generation’ mine, where ‘Women in Mining’ are making their mark – accounting for over a quarter of the technically skilled workforce, and nearly half of all the mines employees. On top of that Finsch Mine Plant efficiency has been significantly improved, and the ‘Peace in Africa’ vessel completed its first year of production off the Northern Cape coast – these three investments contributed R3 billion into the economy.

In 2009 our first key strategic focus area is People; and our key objective is to produce diamonds safely. Our safety indicators reached the best levels in our history, however we want to reach the ‘zero harm’ target we have set ourselves.

In 2008 we banked 120 years of experience – we are using all that experience and our forward looking vision to build our future into the next decade and beyond.

be passionate

pull together

build trust

show we care

shape the future

David NokoManaging DirectorDe Beers Consolidated Mines

The South Africa in which we find ourselves is different to that of two years ago. The political landscape has changed and we face new challenges in our industry, our economy and in our country.

DBCM is doing well in tough times. We are proud that we have been able to secure New Order Mining Rights for the Venetia, South African Sea Areas (SASA), Finsch, Voorspoed, Namaqualand, and the Kimberley Mine. The commitments to the Social Labour Plans, to the De Beers Fund and to small business all play their role in the communities in which we operate our mines.

Employees are more engaged in the work place than before, and jobs are becoming more challenging and fulfilling. De Beers employees are skilling up for the future.

The proven ‘Continuous Business Improvement’ programme helped the company to streamline; to become leaner, more productive and hence more efficient. This has meant that we are now well prepared to realign our operations to the next De Beers Consolidated Mines strategy; which is to have profitable mines operating more efficiently for longer. It was not too long ago that five of the seven operations were running at a loss, in the past year six of the seven reached profitability!

De Beers has taken bold steps to manage the impact of the weakening global economy on its business. The decisions were tough, and cuts were made in all costs throughout the business to minimise the unavoidable and regretful impact on employees. The company is today ‘fit for purpose’, and we are better equipped for the future.

Message from David Noko Our vision: ‘Diamond people creating prosperity responsibly’

‘Doing today better than we did yesterday – forever’

‘We are well prepared for a tougher business env ironment, hav ing improved productivity by 152% in carats mined, increased the efficiencies in all operations and faced up confidently to the impact of the slow down in the world economy in late 2008 and 2009. Importantly we have prepared during these times of downturn for the inevitable recovery; with an optimistic mind.’

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Mining operations

Corporate headquarters

Head Office

Diamond-cutting training centres

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De Beers operations in South AfricaNorthern Cape region

The Northern Cape is the home of De Beers since it’s establishment in 1888, and to the DTC in South Africa. De Beers mining operations at Kimberley, Finsch, Namaqualand and in the Atlantic are testament to the ongoing commitment to the Province. The company’s initiatives in the Province include enterprise development, tourism, education and conservation.

Free State region

The Voorspoed operation opened in November 2008. In the 16 years of Voorspoed’s planned life, it is expected to recover over 10 million carats. Voorspoed is known to produce a few large and exotic coloured stones. The De Beers Ponahalo Trust support educational and job creation projects in the region.

Paul Sparks Ops Manager Namaqualand Mines

Mpumi ZikalalaOps Manager Kimberley Mines

Maxwell MorapeliOps Manager Finsch Mine

Malcom HendrickseOps Manager South African Sea Areas

Andy TaylorOps Manager Voorspoed Mine

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Faried SallieManaging DirectorDiamond Trading Company SA

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Tinie Krugel Manager Lesedi Centre for Human Capital Development

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Finsch Mine

Namaqualand Mines

SA Sea Areas‘Peace in Africa’

Kimberley Mines

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De Beers operations in South Africa

Gauteng region

The economic heart of South Africa, Gauteng, is where De Beers bases its technical, corporate, research and geological services. The Corporate Head Quarters directs company policy including Supply Chain matters where preferential procurement in the last year resulted in R2.85 billion being sourced from our four mining regions; R1.8 billion from Historically Disadvantaged South African (HDSA) owned and empowered companies. The Province is the diamond cutting centre of the country. Cullinan Diamond Mine was sold to an empowerment consortium in mid-2008.

Limpopo region

De Beers’ Venetia Mine is an important revenue generator for the company and the Province as a whole. Venetia engages actively in job creation, education and poverty alleviation programmes. The Oaks Mine, a much smaller De Beers operation in Limpopo, ended production in early 2008.

Production

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Exploration office and laboratory

Off-shore mining operation

Diamond Trading Company SAN

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Centre for Human Capital Development

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Martin PreeceOps Manager Venetia Mine

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Tonnes Tonnes Diamonds Diamonds 2008 2007 treated treated recovered recovered Grade Grade 2008 2007 2008 2007 (cpht) (cpht) (000s) (000s) (carats) (carats)

Cullinan 1 178 2 277 540 964 45.84 42.32 Finsch 6 377 6 018 2 317 2 334 36.33 38.78 Kimberley 5 875 10 070 913 1 638 15.54 16.26 Namaqualand 1 509 4 701 310 767 20.54 16.32 The Oaks 149 253 61 94 40.93 37.19 Venetia 5 975 6 267 7 500 9 080 125.52 144.90 Voorspoed 769 - 128 - 16.64 - SA Sea Areas - - 191 121 - -

TOTAL 21 832 29 586 11 960 14 998

Cullinan Mine (sold 2008)

The Oaks Mine(closed 2008)

Venetia Mine

Finsch Mine

Voorspoed Mine

Johannesburg

Kimberley Mines

De Beers in South AfricaAn empowered company since 2006, De Beers roots are South African – where it was founded 121 years ago. Productivity is rising, skilled jobs filled, R3 billion invested; BEE suppliers supported, employees empowered – subscribing to global best practices and to the philosophy of ‘living up to diamonds’.

Gauteng region

Limpopo region

DBCM wins Productivity SA Chairman’s Award for most improved company

‘Peace in Africa’ on the high seas – 45% of the cost of construction by BEE companies

EmployeesThe company (DBCM) employs 2 574 people in six mining operations and in offices and research facilities in five provinces. The company is compliant with Employment Equity with HDSA accounting for 45% of management (40%: 2007), and Women in Mining exceeding government targets (10%) at 12%.

Fit for business – empowering and commercialProcurement of supplies from business with HDSA representation has reached R2.15 billion a year, 63% of the total spend. Getting ‘fit for business’ was a central theme in the activities of De Beers in South Africa. In 2008, the company received the Productivity SA Chairman’s Award for its achievements of raising productivity by 152% in carats recovered, 106% in tons mined and 180% in revenue per employee – returning most mines to profitability.

Tienie Krugel with Lesedi team members Nico Ross, Christoffel van der Westhuizen and Women-in-Mining candidate Gladys Kobedi

DBCM BEE partners Our partnership with Ponahalo Holdings, resulted in 26% equity in DBCM being owned by the Broad Based Black Economic Empowerment (BBBEE) company. The beneficiaries include the previously disadvantaged, disabled people and all DBCM employees and pensioners. The transaction in 2006 of R3.7 billion exceeded the requirements of the Mining Charter.

Education and skills Skills development accounted for 6.4% of DBCM wage bill devoted to develop skills in the country. DBCM provides basic education as well as community and professional training courses, and supports skills development for small enterprises. The Lesedi Centre for Human Capital Development, launched in Kimberley in 2007, has 500 students with another 3 000 enrolled in e-learning courses. Skills and more Women-in-Mining: Transformation efforts have focused on ‘Women-in-Mining’. The company has its first female mine operations manager, more than a decade of females as truck drivers, and women are prominent in mining, metallurgy, research and exploration. At Voorspoed Mine a quarter of the mining technical workforce is female.

The Rural Schools Project in Limpopo highlights the benefits of partnership between government and private enterprise

HIV/AIDS: employees and communities During the past three years, over R10m each year has been spent in the workplace and R10m for De Beers Community HIV/AIDS Programmes in mining communities. Voluntary counselling and testing programmes succeeded with nearly 80% participation in all operations. ARV’s are provided to employees, spouse or partner and retirees and retrenched former employees unable to join a support programme.

BeneficiationInitiatives such as the Harry Oppenheimer Diamond Training School improve local cutting and polishing skills, and the company has assisted with the establishment of the Northern Cape Government’s Kimberley International Diamond Jewellery Academy. De Beers offered the State Diamond Trader 10% of its production, and supplies about 40% by value of production to its Sightholders (clients).

Rural Development and CommunitiesThe Rural Schools Development Programme in the Limpopo Province is a R23, 8 million partnership with the government to improve schooling for several thousand young learners in rural areas in Limpopo Province. The past year saw the end of mining and a continuing social and environmental plan implemented at The Oaks, with rural development in mind.

The De Beers Fund has helped community development over the decades – running to hundreds of millions of rand assisting thousands of projects. The emphasis is now on fewer larger longer term projects, about 160 – mostly associated with mining communities. In Kimberley small business development and helping Isibindi home-based AIDS care programmes illustrate the breadth of community support from De Beers.

Training in commercial farming skills for the multi-million rand Bronkhorstspruit farmers project (near Cullinan) is another example of a long term project, even after De Beers has ceased to own assets in mining communities.

Conserving energy resourcesDe Beers is a signatory to the National Business Initiative’s commitment to reduce energy and water consumption by 15% by 2015. De Beers managed to reduce its power consumption by about 4% a year since 2006.

DBCM operations focused on reducing power consumption and using water resources sparingly

The De Beers Fund has helped thousands of community development projects over the years

Helping Isibindi home-based care programmes illustrates the company’s breadth of community support

The diamond value chainDe Beers in South Africa – into exploration, mining, recovery, sorting, sales of rough diamonds and marketing programmes. Producing award winning diamond related technology.

Safety first – ‘Zero Harm’. Safety is the vital aspect in our drive for excellence. Behaviour change has led to the all-time low LTIFR (lost time injury frequency rate) of 0.16 in 2008 (0.21: 2007). Fatal and non-fatal accidents move us to increase our efforts to achieve ‘zero harm’ on all operations. De Beers is International Standards Organisation, ISO 14001, compliant, and Safety Managmnent System, OSHAS 18001, certified.

1. ExplorationTo ensure future reserves for mining, De Beers explores and partners with emerging exploration and mining companies in Mpumalanga, and with small scale miners in the Northern Cape and Limpopo Province. De Beers technology is used to explore and to determine the viability of diamond bearing deposits discovered. In the last financial year R100 million was spent searching for new deposits, and in researching and evaluating known indicators.

2. MiningSouth African Sea Areas, De Beers’ marine mining operation off South Africa’s Atlantic coastline, is the country’s first deep-water, full-scale mining operation, undertaken by the ‘Peace in Africa’ – an investment of R1,1 billion. The R1,3 billion Voorspoed Mine came on stream ahead of schedule in mid-2008. About 1 000 jobs were created in the Free State during construction, while over 400 permanent positions now exist. The Finsch Mine Plant was upgraded to improve recovery levels - at a cost of R630 million.

3. Sorting, grading and valuing The Diamond Trading Company (DTC) distributes rough diamonds, locally and abroad. The DTC-South Africa sorting, valuing and sales operations are all based in Kimberley. De Beers has worked with the Department of Mining and offers 10% of its production to the State Diamond Trader.

4. Cutting and polishingAbout 40% of De Beers South African production is sold to the local diamond cutting industry – the highest level of beneficiation of any precious resource. In good times these sales are worth over US$600 million a year.

5. Jewellery manufacturingFor over a decade De Beers DTC South Africa has run the Shining Light Awards competition to encourage and to develop South African jewellery design talent; as well as to create opportunities for skills development and job creation. There have already been almost 100 winners, many of whom have since received international exposure.

6. Promoting local salesMarketing is carried out by De Beers Group Marketing, a business unit within the company. It focuses on innovative marketing activities: developing and marketing ‘big ideas’, which have proved successful at driving demand; further developing the FOREVERMARK programme; and maintaining consumer confidence in diamonds.

w w w . d e b e e r s g r o u p . c o m

Registered Head Office: 36 Stockdale Street, Kimberley 8301

Some of our corporate leaders

Sakhile NgcoboHead of PCA, Exco, DBCM

David NokoManaging Director DBCM

Barend PetersenDirector DBsa and DBCM

Thandi OrleynChairperson De Beers Fund

Cheryl CarolousDirector DBCM

Mike BrownChief Operating Officer, Exco, DBCM

Faried SallieManaging Director DTC SA

Manne DipicoChairman Ponahalo Capital Deputy Chairman DBCM

Nicky Oppenheimer Chairman DBsa and DBCM

Gareth PennyManaging Director De Beers Group

Christie PisaneTechnical Support ManagerDBCM Kimberley Mine

Corporate Headquarters: Cnr Diamond Drive and Crownwood Road, Theta, Johannesburg 2013

Dolly MokgatleDirector Ponahalo

Phillip BartonHead Finance,Exco, DBCM

The Diamond Route – South Africa

The Diamond Route began in 2002 at the Johannesburg World Summit on Sustainable Development. It holistically brings together nine of the De Beers and Oppenheimer family conservation and heritage sites situated in four provinces.

The initiative has made 250 000ha of privately owned land accessible to birders and eco-tourists.

It provides sites for researchers to work in, and focuses the visitor’s mind on the entire ecosystem, linking birds and insects with carnivores, such as wild dogs, through to human heritage sites; notably the Namaqualand Strandveld and Ship Wreck Tour, and the Kimberley Big Hole Experience.

The rural and urban sites are home to over 550 bird species of the 850 in South Africa.

Two of the properties have been classified as Important Bird Areas (IBA) by BirdLife South Africa.

Training guides and starting a birding route and the world’s first insect route, together with hiking and 4X4 trails and accommodation to suit most visitors, are some of the achievements to date. For more information, visit: www.diamondroute.co.za.

Robin MillsDirector DBsa and DBCM

Dr Mark BerryDirectorDBsa