Annual review 2007
years of
diamond
production
Namdeb Annual Review 2007
years of
diamond
production
Our vision
Namdeb – the world’s leading alluvial-diamond
mining company.
Contents
Vision, mission and values 1
Preferential procurement
28
100 years of history
2
Social performance
30
How diamonds benefit Namibia
4
Environmental performance
36
Organisational profile
6
Associate companies
42
Chairman’s statement
8
Corporate governance
50
Financial performance
10
Board of directors
52
Namdeb's year in review
14
Alternate directors
53
Managing director’s review
16
G;ossary
54
Economic performance
22
Statutory information
55
Building a sustainable Oranjemund
26
Contact details
55
Our mission
We produce diamonds profitably, sustainably and
responsibly to the benefit of our shareholders and
stakeholders, whilst making a lasting contribution
to Namibia.
Our values
EXcellence Care Integrity TEamwork Diversity = EXCITED
This Annual Review covers the period
1 January 2007 to 31 December 2007, and includes information on Namdeb’s operations, its
subsidiaries and the contributions made to production by contractors. A separate, more detailed
report, to stakeholders, that will highlight our contribution to sustainable development, will be
presented later in the year. For more information on this or any other documentation on the company,
please visit www.namdeb.com or contact External Affairs and Corporate Communications.
www.namdeb.com
EXcellence
Care
The quality of
To do something
being very good at
fairly and with
something
great attention
Integrity
The quality of
TEamwork
being honest and
The ability to work
firm in your moral
well together
principles
Diversity
Recognising
the value of
including all
1
2
Namdeb Annual Review 2007
Namdeb Annual Review 2007
years of
history
Sperrgebiet shipwreck is the find of the
century for Namibia
While the Namibian nation was marking the centenary since the discovery of
diamonds, another fascinating discovery unfolded in April in the form of the oldest
sub-saharan shipwreck yet in Namdeb’s mining area. The find yielded a wealth of
objects including six bronze canons, several tons of copper, over 500 elephant tusks,
navigational instruments, weapons and thousands of Spanish and Portuguese gold
coins, minted in the late 1400s and early 1500s. For Namibia, it is the archaeological
find of the century and a fitting way to celebrate the 100th year of diamond mining in
the Sperrgebiet, where the shipwreck was found.
A shiny treasure starts a diamond rush
Diamonds originated deep in the interior of southern Africa. Over millennia, the Orange River carried
them to the Atlantic Ocean where they were deposited on ancient beaches, which in time became part
of the mainland.
Prior to the discovery of diamonds in the
Namibian desert, some prospecting had
taken place along the coast as early as
1863. David Christiaan, a Hottentot Chief,
gave a Cape Town firm (De Pass, Spence
and Company) a concession extending from
Angra Paquena (Lüderitz) to the Orange River
and 32 kilometres inland from the coast.
In 1908, railway worker Zacharia Lewala
stumbled on a shiny treasure that started a major
diamond rush. As a result, diamond mining
regulations were introduced in 1911 and the
Sperrgebiet or “forbidden territory” was declared.
The harvesting
of diamonds in
Namibia takes
shape
In 1920, Sir Ernest Oppenheimer
formed Consolidated Diamond
Mines of South West Africa (CDM);
in 1923, CDM concluded the
Halbscheid Agreement with the
South West African Administration,
which granted CDM the mining rights
for the Sperrgebiet. Oranjemund, a
unique town that owes its existence
to diamond mining, was established
in 1936. It adopted its name from
its geographical position at the
mouth of the Orange River, the
national boundary between the
Republics of Namibia and South
Africa, and services the Mining
Area 1 and Orange River mines.
The birth of
Namdeb
In 1994, an agreement between De Beers and the Government of the Republic of Namibia resulted in the
formation of Namdeb Diamond Corporation (Pty) Limited. All of the De Beers group’s existing Namibian
mining licences and related rights were replaced by a consolidated and rationalised mineral agreement,
drawn up under Namibia’s post-independence mineral legislation. The formal signing ceremony, attended
by Namibia’s Founding President Sam Nujoma and the then chairman of De Beers Centenary Julian
Ogilvie-Thompson, took place at State House in Windhoek. The key wishes expressed on that historic day
were that Namdeb:
•
In this photograph from the early 1950s,workers
remove diamond-bearing gravel from the bedrock at
Consolidated Diamond Mines of South West Africa.
would grow to become an important global player in the diamond industry; and
• would continue to be the leading national provider of government revenue, foreign exchange earner and
employer, while setting benchmarks in respect of excellence in people.
3
4
Namdeb Annual Review 2007
Namdeb Annual Review 2007
5
They create prosperity
How diamonds
benefit Namibia
Intellectual capital
As the world’s leading alluvial-diamond mining
company, Namdeb has a wealth of expertise
acquired over many years of diamond mining and
aims to create successful and sustainable mining
activity wherever it operates.
The life of Namibia’s onshore operations has been extended through significant
technological and human investment. Namdeb continues to strive to extend the
life of all its mining operations in Namibia – whether through exploring for new
deposits or investing in people and technology to optimise existing resources.
De Beers’ partnership with the Namibian Government has ensured that Namdeb
has access to knowledge and expertise in all aspects of diamond mining through
the diamond pipeline. The NDTC helps to ensure continued demand for Namibia’s most valuable resource.
They build the economy
Integrity
Economic muscle
Namdeb’s contribution to the economy through revenues generated and partnerships forged has
meant that we are the country’s largest financial contributor. Diamonds are an important generator of
export earnings, accounting for more than 40% of export revenue, 7% of government revenue and
more than 10% of gross domestic product (GDP).
Namdeb, De Beers Marine Namibia, NamGem and the Namibia Diamond Trading Company (NDTC)
employ over 3 000 people, most of whom are Namibian citizens. This makes the Namibian De Beers
family of companies one of the country’s largest employers, and creates multiple opportunities for
partners – not only in mining, but also in technology, enterprise development and academic research.
Furthermore, for every 10 people employed at Namdeb, an additional five people are employed
throughout the economy.
Through successful partnerships, and a deep commitment to the Namibian people, Namdeb believes
its sustainable diamond mining enterprise has made tangible differences to the Namibian nation.
Personal strength
As one of the country’s largest
employers, Namdeb provides
exciting learning opportunities for
bursary students and employees,
both within and outside Namibia’s
borders. Namdeb views education
as critical to the growth of a thriving
economy and has made significant
investments in all levels of education
and training to help ensure a brighter
future for the country and its people.
As a key participant in the Kimberley Process, Namibia sets benchmarks in the legislative and regulatory processes and
management of diamond resources. Combined with good government practice, this ensures that revenue from Namibia’s
diamonds is ploughed back into the economy for the benefit of all its people.
Infrastructure
Diamonds are Namibia’s single biggest export product and the backbone of the economy, acting as a catalyst for the provision
and extension of infrastructure such as roads, hospitals, houses and schools. Indeed, Namibia spends almost half of its revenue
on public services, working actively to alleviate poverty, fight disease and advance development.
They make a difference in people’s lives
Through its commitment to working together with both government and the
people of Namibia, Namdeb has successfully ensured that the country’s most
inaccessible diamond resources are turned into wealth that touches the lives of
all Namibians.
Supporting people
Namdeb has successfully helped to develop Namibian society through its
substantial investment in social, educational and environmental projects.
Millions of Namibian dollars have already been spent on projects of all sizes
– from large-scale initiatives to small-business ideas. Namdeb remains the
largest corporate responsibility contributor to the socio-economic development of the country.
Protecting people
Namdeb was the first company in Namibia to provide anti-retroviral treatment (ART) for permanent
employees and their spouses/life partners, and is globally recognised as a leader in combating
HIV/Aids in the workplace.
Protecting lives
People working at Namdeb operations enjoy among the highest levels of safety and
environmental standards in the world. Almost all of Namdeb’s operations have achieved the
highest Nosa ratings as well as ISO 14001 certification.
Conserving the environment
Namdeb continues to be involved in numerous conservation, monitoring and ecological history
programmes which aim to minimise the potential impact of its operations on the environment.
6
Namdeb Annual Review 2007
Organisational
profile
Namdeb Diamond Corporation (Pty) Limited
Founded 1994
Owned
Equally by the Namibian Government and De Beers Société Anonyme
Employees More than 3 000
Head office
Windhoek
Core business Diamond mining in Namibia and related activities such as sorting, cutting and polishing.
Republic of
Namibia
All the diamonds mined at Namdeb’s operations are sold to the NDTC for resale on the
international diamond market.
The town of Oranjemund serves the Mining Area 1 and Orange River Mines operations. It is also the logistics base
for the De Beers Marine Namibia crew-change operation and home to most Namdeb employees. The Namdeb
office in the town of Lüderitz provides services to Elizabeth Bay (E/Bay) Mine, the main operation of Northern
Areas mines.
Republic of
South Africa
The company holds six mining licences in the following areas:
• Mining Area 1, Bogenfels and
Elizabeth Bay licences
Extends from the Orange River in the south to
Lüderitz in the north, and from a few kilometres
offshore in the Atlantic Ocean to around 20 to 35
kilometres inland.
• Douglas Bay Mining Licence
• The Orange River Mining Licence
Extends along the Orange River for about 50
kilometres inland from the Mining Area 1 boundary.
• Atlantic 1 Mining Licence
Encompasses a portion of the middle shelf of the
Atlantic Ocean, from the boundary of Mining Area 1
to about 65 kilometres from the shore.
Orange River Mining Licence
Mining Area 1 Mining Licence
Atlantic 1 Mining Licence
Extends north of Lüderitz for some 60 kilometres
and approximately 15 kilometres inland of the
Atlantic high-water mark.
Bogenfels Mining Licence
Other services
Douglas Bay Mining Licence
fully functional hospital and primary school are maintained by the company. The town of Oranjemund is maintained
A
and prepared for the future positive legacy by the Oranjemund Town Management Company, a wholly owned
subsidiary of Namdeb, while diamond cutting and polishing is done by NamGem, another wholly owned subsidiary
based in Okahandja. The company’s social responsibility programme is managed by the Namdeb Social Fund (NSF)
while Oshipe Development Fund, a wholly owned subsidiary of Namdeb, aims to promote entrepreneurship and
small business development through investment in commercially viable business in the country.
Elizabeth Bay Mining Licence
Mining Licence 128A, 128B, 128C
Exclusive Prospecting Licences (EPL)
(3605, 3606, 3607, 3608, 3609, 36010
and 36011) Caprivi Region
8
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Chairman’s
statement
Queen Elizabeth II, at one of her recent birthday
celebrations, commented that “everyone can get old
– you just have to live long enough.” This comment
holds so much truth in every aspect of life, including
diamond mining. Of course, it’s not the years alone
which matters, but what one has achieved with them.
As diamond mining in Namibia enters its 100th
year, we look back with immense pride at a long
and colourful diamond mining journey of success,
achievement, partnership – and living long enough to
be successfully a century old.
In what is perhaps a timeous reminder of the
impressive age we have attained, 2007 has proven to
be one of the more difficult years in the recent history
of land mining. The land operations recovered 60 000
carats less than its budget of 1,1 million carats and
exceeded its cost budget. Some of the reasons for the
under-performance of our Namdeb land operations
were:
• A fire at the No. 3 Plant Main Control Centre;
• Lower than expected productivity, especially in the
mining production areas;
• Increase in costs, especially fuel;
• Adverse weather conditions, thereby increasing
the cost of maintaining the sea wall; and
• Incidents of flooding of the mini-mine.
Building for the future –
by learning from experience
This is indeed an impressive achievement and clear
testimony that De Beers Marine Namibia has grown in
leaps and bounds to take over the leadership mantle
from Namdeb land – a role it will increasingly play in
future.
Our safety performance for 2007 was much improved
compared to 2006. We closed the year with a LTIFR
of 0,17 and reduced injuries and vehicle accidents by
more than 40% in comparison to the previous year.
We reached the 6 Million Fatality-Free Shift mark in
November, retained NOSCAR status, retained our ISO
14001 certification and also obtained OHSAS 18001
certification.
Throughout the journey of mining for a century we
have had to adopt and employ new methods to mine
successfully and sustainably. At this point in the history
of Namdeb, greater impetus is required to accelerate
fit for purpose, flexible and non-traditional working
and employment practices to ensure that Namdeb
continues to be the world's leading alluvial diamond
mining company.
The electricity challenge currently being experienced
across southern Africa and the ever-increasing fuel
price will certainly have an adverse effect on our
operations as we move to close Chapter II (delivering
cumulatively 10 million carats by 2010).
Being uncompromising on safety in the workplace
must become a standard of perfection that we all
strive for. Any incident or injury on duty is simply one
too many.
While we did not achieve all our production and
financial targets over the last year, we are fortunate
to have two strong shareholders in De Beers and
the Government of the Republic of Namibia. The
strength of this partnership is the reason why we can
look back to 2007 and see it as a year of learning
and experiences that can only make us better and
stronger.
In terms of the environment, we continued to make
great progress on our rehabilitation plan and enjoying
tremendous support from our stakeholders.
We will take the lessons of 2007 as an inspiration
to deliver bigger and better results for all our
stakeholders and shareholders in 2008 and beyond.
Another important milestone was attaining first and
second position in the prestigious NOSA International
Top 100 Mines Competition.
While these reasons provide a sound technical
explanation for our under-performance, the more
salient explanation lies in the reality that land-based
mining is now in its 100th year – and has reached
a point which will require extra-ordinary techniques
and skills to continue to make it a success. More
importantly, land-based mining will require realistic
and sustainable targets for us to continue to enjoy the
fruits of diamond mining.
As we set forth into 2008 we must remind ourselves
of our motto: ‘On diamonds we build’. Our motto
provides us with the very important reminder that
beyond our commercial objectives, Namdeb carries
a national duty. This duty is best encapsulated by
Namibia’s Vision 2030 – which sets very bold targets
for Namibians to enjoy standards of living equal to
their counterparts in Europe by 2030. As one of
the country’s biggest contributors to the Namibian
treasury, Namibians look to Namdeb to play a leading
role in the national development of the country.
However, management has prepared well for these
challenges, and has had the vision to invest for the
future. As a result, in spite of the set-backs on the
land operations, Namdeb’s total diamond production
continued to exceed 2 million carats – with land
accounting for 1,04 million carats and marine for
1,x 14 million carats.
In spite of our challenges with land mining, Namdeb
has no intention of relinquishing its prominent position
in Namibia – that of being one of the most important
players in the economy. To do so, we must reassess
our operations and take courageous decisions to
ensure that Namdeb is correctly resourced to address
the challenges of mining profitably and sustainably.
Nicky Oppenheimer
Chairman
9
10
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Financial
performance
Highlights
Production exceeded two million carats for the second year in a row – a 4%
improvement on 2006. However, as a result of production schedules, carat
sales were 5% below those of 2006.
Production statistics
2007
000s
2006
000s
Carats produced
2 176
2 085
Carats sold
2 060
2 174
– land
1 030
1 120
– marine
Diamond sales revenue at N$4,56 billion is 15% lower than in 2006 as a result
of the reduction in carats sold and a change in mix, combined with the effect
of the price correction in the rough diamond market in the second half of 2006.
Rough diamond prices have been strengthening during 2007.
Profit before tax decreased to N$776 million (2006: N$1,294 million), mainly
due to the reduction in revenue combined with increased production costs,
partially offset by a decrease in other operating expenses.
Taxes amounted to N$633 million (2006: N$989 million), representing 82% of
pre-tax profits (2006: 76%).
Production costs came under pressure during 2007 due to higher than
anticipated fuel prices and salary increases granted, as well as additional
maintenance work required on the sea wall due to adverse weather conditions.
Other operating expenses decreased due to the arrangements of the new sales
agreement coming in to effect in 2007 which led to the establishment of NDTC –
a 50:50 joint venture marketing company responsible for valuing, sorting, selling
and marketing of Namdeb’s production.
Tons stripped/treated – land
Square metres mined – marine
1 030
1 054
56 165
58 532
5 312
5 327
Value-added distribution
2006
2007
10%
18%
39%
29%
48%
38%
5%
Employee compensation
Dividends paid to shareholders
Direct and indirect taxes
Retention to support future business growth
13%
11
12
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Financial
performance
Balance sheet
As at 31 December 2007
2007
N$ millions
2006
N$ millions
ASSETS
Non-current assets
Property, plant and equipment,
mining rights and investments
1 206
1 169
1 206
1 169
Current assets
Diamond and stores inventories
Trade and other receivables
Cash and cash equivalents
419
355
-
214
322
336
774
872
1 980
2 041
125
260
112
202
385
314
Total assets EQUITY AND LIABILITIES
Capital and reserves
Share capital and non-distributable reserves
Distributable reserves
Non-current liabilities
Deferred taxation Provisions for liabilities and charges
Current liabilities
Trade and other payables Shareholders for dividends
Net bank overdraft
Taxation liability
Total equity and liabilities
Income statement
2007
N$ millions
2006
N$ millions
Diamond sales
4 562
5 366
Cost of sales
3 503
3 590
Other operating expenses
283
482
Profit before tax
776
1 294
Taxation 633
989
Net profit for the year 143
305
2007
2006
N$ millions
N$ millions
829
1 805
(1 049)
(615)
Net cash from operating activities
(220)
1 190
Net cash used in investing activities
(204)
(439)
Net cash used in financing activities
(252)
(148)
Net (decrease) / increase in cash and cash equivalents
(676)
603
Cash and cash equivalents at beginning of the year
336
(267)
Cash and cash equivalents at end of the year
(340)
336
For the year ended 31 December 2007
Cash flow summary
For the year ended 31 December 2007
Cash generated from operations
226
470
179
428
696
607
547
12
340
-
899
532
165
423
1 120
1 980
2 041
Taxation paid 13
14
Namdeb Annual Review 2007
Namdeb Annual Review 2007
15
September 2007
Namdeb’s year
in review
Namdeb operations hosted former President Sam
Nujoma. The visit to the Sperrgebiet and Atlantic 1
was hosted by the Geological Department in
conjunction with De Beers Marine Namibia.
June 2007
January 2007
The Government of the Republic of Namibia and
De Beers reached an agreement that will secure
the sales of Nambia’s diamonds through the
Namibia Diamond Trading Company until 2013.
May 2007
For the first time, this unique agreement will extend
from diamond mining into diamond marketing through
the establishment of a 50:50 partnership in a new
company – Namibia Diamond Trading Company –
charged with the responsibility of valuing, sorting, selling
and marketing of Namdeb’s diamond production.
One of Africa’s greatest present
day explorers, Kingsley Holgate
and his expedition team visited
Oranjemund on their Cape to Cape
expedition – The Outside Edge – a
circumnavigation of Africa by land
through 33 countries.
As part of a benchmarking exercise,
Zimbabwean Minister of Mines and
Mining Development Charles Tahwa,
accompanied by his Namibian counterpart
Erkki Nghimtina and other high ranking
officials, visited Namdeb operations.
November 2007
Namdeb achieves six million fatalityfree shifts – a record to be proud of and
celebrate while realizing that it is vital that
the company remains a leader in safety.
Namdeb hosts the annual West Coast
Metallurgical conference, with the focus
on metallurgical processes across the
principal areas of ore preparation, or
concentration, recovery processes,
design, commissioning, technology and
project overviews from business units.
March 2007
As part of Namdeb and its group of companies'
social responsibility programme, NamGem
Diamond Manufacturing Company handed over
a newly renovated farmhouse (at a cost of
N$350 000) to the Ileni Twikwafeni Project, a
community initiative of the Five Rand Camp on the
outskirts of Okahandja. The facility hosts, among
others, community based activities, HIV/Aids
counselling and home-based care activities, as
well as a number of income generating projects.
July 2007
Oranjemund Town Management Company,
a wholly-owned Namdeb subsidiary tasked
with preparing the town of Oranjemund for
proclamation and a prosperous future beyond
the mining era, is officially launched.
October 2007
National Diamond Trading Company and
De Beers Group announce the
outcome of the first application process
for the supply of rough diamonds
to 11 sightholders in Namibia.
April 2007
Namdeb Financial Performance for the year ended 31 December 2007
Highlights
0RODUCTIONEXCEEDEDMILLIONCARATSFORTHESECONDYEARINAROWAIMPROVEMENTONBUTASA
RESULTOFPRODUCTIONSCHEDULESCARATSALESWEREBELOWTHOSEOF
$IAMONDSALESREVENUEAT.BILLIONISLOWERTHANINASARESULTOFTHEREDUCTIONINCARATS
SOLDACHANGEINMIXCOMBINEDWITHTHEEFFECTOFTHEPRICECORRECTIONINTHEROUGHDIAMONDMARKETINTHE
SECONDHALFOF2OUGHDIAMONDPRICESHAVEBEENSTRENGTHENINGDURING
0ROlTBEFORETAXDECREASEDTO.MILLION.MILLIONMAINLYDUETOTHEREDUCTIONIN
REVENUEINCREASEDPRODUCTIONCOSTSPARTIALLYOFFSETBYDECREASESINPROSPECTINGCHARGESANDOTHER
OPERATINGEXPENSES
4AXESAMOUNTEDTO.MILLION.MILLIONREPRESENTINGOFPRETAXPROlTS
0RODUCTIONCOSTSCAMEUNDERPRESSUREDURINGDUETOHIGHERTHANANTICIPATEDFUELPRICESAND
SALARYINCREASESGRANTEDASWELLASADDITIONALMAINTENANCEWORKREQUIREDONTHESEAWALLDUETOADVERSE
WEATHERCONDITIONS
%XPENDITUREONPROSPECTINGAND2$ARELOWERTHANINASTHE-ARINE$REDGINGPROJECTEXPENSES
INCURREDINWERENOTREPEATEDIN
/THEROPERATINGEXPENSESWEREFAVOURABLYIMPACTEDBYTHEARRANGEMENTSOFTHENEWSALESAGREEMENT
COMINGINTOEFFECTINWHICHLEDTOTHEESTABLISHMENTOF.$4#nAJOINTVENTUREMARKETING
COMPANYRESPONSIBLEFORVALUINGSORTINGSELLINGANDMARKETINGOF.AMDEBSPRODUCTION
Production statistics
Balance sheet
2007
000s
2006
000s
Carats produced
2,176
2,085
Carats sold
2,060
2,174
sLAND
sMARINE
4ONSSTRIPPEDTREATEDnLAND
3QUAREMETRESMINEDnMARINE
Income statement
2007
!SAT$ECEMBER
2007
Non-current assets
s 0ROPERTYPLANTANDEQUIPMENT
MININGRIGHTSANDINVESTMENTS 1,206
Current assets
s $IAMONDAND
STORESINVENTORIES
s 4RADEANDOTHERRECEIVABLES
s #ASHANDCASHEQUIVALENTS
Value added distribution 2007
Total assets
1,169
774
872
1,980
2,041
EQUITY AND LIABILITIES
Current liabilities
s 4RADEANDOTHERPAYABLES
s 3HAREHOLDERSFORDIVIDENDS
s .ETBANKOVERDRAFT
s 4AXATIONLIABILITY
Total equity and liabilities
$IAMONDSALES
#OSTOFSALES
'ROSSPROlT
0ROSPECTINGAND2$
/THEROPERATINGEXPENSES
Profit before tax
4AXATION
776
1,294
Net profit for the year
696
607
899
1,120
1,980
2,041
143
305
Cash flow summary
2007
#ASHGENERATEDFROMOPERATIONS
4AXATIONPAID
Capital and reserves
s 3HARECAPITALAND
NONDISTRIBUTABLERESERVES
s $ISTRIBUTABLERESERVES
Non-current liabilities
s $EFERREDTAXATION
s 0ROVISIONSFORLIABILITIES
ANDCHARGES
Value added distribution 2006
2006
2006
ASSETS
2006
.ETCASHFROMOPERATINGACTIVITIES
.ETCASHUSEDININVESTINGACTIVITIES
.ETCASHUSEDINlNANCINGACTIVITIES
.ETDECREASEINCREASEIN
CASHANDCASHEQUIVALENTS
#ASHANDCASHEQUIVALENTS
ATBEGINNINGOFTHEYEAR
Cash and cash equivalents
at end of the year
(340)
On the occasion of its full results for the period
ending December 2006, Namdeb announces a
27% increase in its carat production, attributed
to an increase in land-based production at the
mine’s No 3 Plant, Pocket Beaches as well as
increased marine production.
Namdeb operations, through the Sida Ei !gûs
Task Group, hosts an inter-ministerial delegation
to brief them on the future of land-based
operations and developments.
336
For more information, contact:
(ILIFA-BAKO'ROUP-ANAGER%XTERNAL!FFAIRSAND
#ORPORATE#OMMUNICATIONS.AMDEB#ENTRE
TH&LOOR$R&RANS)NDONGO3TREET7INDHOEK
4ELEPHONE
&ACSIMILE
EMAIL
HILIFAMBAKO NAMDEBCOM
7EBSITE
WWWNAMDEBCOM
Our Values
EXcellence
Care
Integrity
February 2007
TEamwork
Diversity
We are
‘EXCITED’
Namdeb Social Fund donates over N$3 million
to 42 projects and organizations countrywide
ranging from education, health and welfare,
community development and SME projects.
August 2007
Namdeb breaks a record at the NOSA Top 100
international mining companies awards ceremony
by receiving three top safety awards – the first time
ever in the history of NOSA that a mining company
has won more than one of the top three awards.
Namdeb and the Mineworkers Union of Namibia
(MUN) successfully concluded wage negotiations on
a 10% increase across the board for the company’s
union members (who make up 70% of staff).
December 2007
Chairman of De Beers, Nicky Oppenheimer,
officially launched the De Beers Namibia Fund.
The fund is the official vehicle through which
De Beers will support corporate social
investment initiatives in Namibia.
16
Namdeb Annual Review 2007
Managing
director’s review
Namdeb Annual Review 2007
Strong production levels and bold new
initiatives mark Namdeb’s contribution
to national development
The year 2007 was exciting for Namdeb, with the
company recovering over two million carats for the
second year in succession. Production from marine
mining yielded 1,18 million carats (up from 1,05
million carats in 2006) and land operations produced
999 000 carats (compared to 1,035 million carats
in 2006).
This achievement is particularly pleasing as, only
a few years ago, it was considered impossible for
output to exceed the regular production levels of
1,3 million carats per annum. However, with the
application of innovative beach accretion strategies,
Namdeb has been able to extend its land operations
in Mining Area 1 and boost production substantially.
Record production despite challenges
The record figures of 2007 were achieved in spite
of production disruptions and adverse weather.
Damage from fire at Number 3 Treatment Plant
rendered it inactive for five months. There were
also added costs to transport ore to alternative
treatment facilities. Poor weather during the
winter months created harsh sea conditions,
leading to additional maintenance costs for the
sea-walls that protect the low-lying mini-mines.
Production from the Elizabeth Bay Mine exceeded
budget for the first time since the commissioning
of the new treatment plant in 2004. Similarly, the
combined contractor operations had a good fourth
quarter, making up for the production shortfalls
incurred during the third quarter. A total of 30 000
carats was recovered from the combined surf
zone, shallow marine and mid-water operations.
The larger-than-expected average stone size
from this area contributed to a very good financial
performance. During the course of 2008, it is
anticipated that the shallow marine sector will
expand, with the addition of three vessels.
Financial overview
Notwithstanding a good production, Namdeb did
not achieve budget, mainly as a result of a shortfall
in carats sold and an increase in unbudgeted
expenditure – as discussed above and in other
relevant sections of this report. The company’s
turnover was N$4,6 billion (15% lower than 2006)
and the distributable amount was N$671 million.
Strategic review
In our previous year’s report (2006), we outlined
the objectives for a comprehensive strategic
review for Namdeb land operations, which we
believe will deliver a turn-around strategy through
project Sida Ei !gûs. Indeed, as reported then,
2007 was a year of designing and developing
this change management strategy. We are happy
to report some positive achievements. The Sida
Ei !gûs strategy is premised on three pillars:
1. A business model to guide future decisions
about the full diamond pipeline from
exploration through to closure of operations.
2. Achieving the full potential of Namdeb's mineral
resources. This will be done by improving current
operations through asset sweat opportunities
and cost optimisation, as well as the delivery
of new projects; these projects will generate
new carat opportunities to replace depleting
resources, while exceeding Chapter 2 Big
Hairy Audacious Goal (BHAG) and increasing
our life of mine and production projections.
3. Creating a positive legacy through the
implementation of an integrated closure plan.
The strategy will be achieved through seven work
streams or strategic initiatives: Carats Today,
Carats Tomorrow, Business Investment Model,
Overheads and Costs Optimisation, Positive Legacy,
Organisational Effectiveness, Communication
and Change Management. Instead of rolling
out these initiatives exclusively as a separate
Sida Ei !gûs project, the workstreams will be
implemented as part of the ongoing operations.
With this re-organisation, the new Corporate
Strategic Plan is now in an improved position
to guide management efforts to restructure the
Namdeb land operations into a more fit-forpurpose business uwnit that will deliver results
while downscaling the operations. We have
commenced the implementation of this strategy and
believe that Sida Ei !gûs provides the appropriate
change framework for Namdeb land operations.
17
18
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Managing
director’s review
Organisational effectiveness
To enhance efficiency and to eliminate unnecessary
duplication and bureaucracy, we continued to
embed the principles of workplace accountability
throughout the organization. Accordingly, we
have embarked upon a comprehensive review of
systems, policies and processes to make them
simpler, faster and more effective to ensure fast and
effective service delivery across the organization.
We have set ourselves an ambitious goal of
pushing the organization’s maturity level from
Level II to Level III, where systems, policies and
procedures are standardized and benchmarked
against best practices. We have adopted a new
remuneration policy and retention strategy, as
well as a review of the current employee value
proposition to meet the ever changing needs
of a diverse and knowledgeable workforce.
Safer operations
The combined lost time injury frequency rate (LTIFR)
for all of Namdeb’s operations was 0,17 in 2007
continued
(compared to 0,35 in 2006). Although we have
zero tolerance towards injuries and accidents,
the 2007 LTIFR is a commendable improvement
on the previous year. Namdeb also recorded six
million fatality-free shifts, which is a remarkable
achievement for an operation of its size and age.
Our business philosophy and principles require all
Namdeb operations to adhere to the national safety
legislation and work towards best practice safety
standards such as OHSAS 18001 and the NOSA
Integrated Safety, Health and Environmental System.
We continued liaising with regulatory agencies,
employee representatives and local communities to
promote partnership on safety issues and enable
a supportive and accident-free safety culture. All
employees and contractors follow health and safety
practices consistent with our health and safety policy.
All Namdeb operations hold the five-star platinum
NOSCAR status, graded on the NOSA Integrated
Safety, Health and Environmental system. Since
2005, all our active operations have been included
in the list of NOSA Top 100 International Mining
Companies. We are particularly pleased that in 2007,
Elizabeth Bay Mine was awarded first position in this
league, with Orange River Mine named as runner-up.
Similarly, during November 2007, Namdeb
achieved a new milestone by obtaining
OHSAS 18001 certification.
Environmental management
Effective management of the impact of mining and
rehabilitation is part of any good mining process and
mines are accountable for ensuring that the impacted
areas are rehabilitated. In line with the Minerals
(Prospecting and Mining) Act of 1992, Namdeb’s
environmental and rehabilitation policies prescribe
the rehabilitation requirements in its license areas.
To ensure that Namdeb fully complies with national
rehabilitation standards (or, in the absence of national
standards, global best practice), the company
has contracted a specialist desert ecologist to
develop its comprehensive rehabilitation plan. This
approach has provided a strong scientific basis for
the rehabilitation plan, allowing the formulation of
practical solutions with a clear business case.
Managing the mining footprint
Namdeb’s rehabilitation plan was finalised
at the end of October 2007. Seven pilot
projects were devised to provide a more
accurate costing of the tasks of rehabilitation,
so that these could be fed into the detailed
cost estimate for the March 2008 board
meeting. The first of these pilot projects
has been completed and signed off; the
project was the rehabilitation of overburden
dumps and mined areas at Aches and other
disturbed areas along the Sendelingsdrif to
Oranjemund road. The other pilot projects
– in Mining Area 1 and along the road from
Oranjemund to Lüderitz – are ongoing.
Partnering with government and private
institutions has enabled Namdeb to go
far beyond complying with minimum legal
requirements. Namdeb participates in the
Millennium Seed Bank Project, together with
Namibia’s Ministry of Agriculture, Water and
Forestry and the Royal Botanic Gardens
at Kew in London. This project researches
the development of restoration techniques.
Rehabilitation planning is co-ordinated with
the Ministry of Environment and Tourism’s
planning for the future Sperrgebiet National
Park, and ministry staff is directly involved
in Namdeb’s rehabilitation projects.
An inter-ministerial committee has been
mandated by the Namibian Government to
provide input to Namdeb’s Strategic Business
and Closure Plan. A familiarisation visit took
place in 2007. A rehabilitation programme is
presently being developed which will schedule
rehabilitation activities over the coming years.
Environmental certification requirements
The South African Bureau of Standards (SABS)
conducted an ISO 14001 surveillance audit during
November 2007, and confirmed our continued
compliance to the ISO 14001:2004 Environmental
Management System. Non-conformities were
classified as minor, and related to minor legal
issues, operational practice and progress with
environmental management plans. Conclusions were
that the system had been improved, management
actions had been taken, and personnel were keenly
committed to maintaining and improving the system.
The complement of environmental personnel at the
operations was increased to ensure the maintenance
of the Environmental Management System to
ISO 14001 requirements. A detailed, fast-track
orientation and development plan was developed
to assist with the training of the new recruits.
Health focus continues
Namdeb has a holistic wellness programme that
focuses on the prevention and care of diseases,
providing a variety of services and a specific focus
on HIV and Aids. The HIV and Aids management
strategy covers a range of key areas, including
care and support to employees, life partners
and community members, as well as awareness
and education programmes to support the
efforts of government and other stakeholders.
19
20
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Managing
director’s review
About 90% of the employees are well informed and
find the wellness programme useful and interesting,
according to the latest Key Area Performance (KAP)
survey. During 2007, more than 80% of employees
undertook voluntary counselling and testing.
Anti-retroviral therapy is provided at no charge
to employees and life-partners. The majority of
Namdeb HIV-positive employees are registered for
treatment, with 80% compliance. There has been an
overall decrease in HIV prevalence due to employee
movements (reducing from 11,4% in 2003 to 8,7%
in 2007) and in most age groups and job bands.
Preferential procurement and entrepreneurship
The Namdeb black economic empowerment (BEE)
policy provides guidance on how the company
can contribute to the Namibian transformation
requirements and the national ‘Vision 2030’
development strategy. It aims to foster a culture of
entrepreneurship among historically disadvantaged
Namibians, promote the development of commercially
continued
viable and sustainable businesses, and facilitate
the transfer of capacity to Namibian suppliers.
business development (11%). More details of the
fund’s donations can be found on pages 34 and 35.
In 2007, Namdeb had N$1,48 billion in controllable
procurement spend, of which N$633 million
(42%) was with accredited Namibian companies
with various levels of transformation status.
The company concentrates its procurement
empowerment efforts on businesses which have
a broad-based empowerment status, are based
in the regions of Namdeb operations, and provide
those products and services that are required
by Namdeb’s range of business activities.
Building our skills base
Namdeb is committed to the development and
enhancement of critical mining skills. In the year
under review, 27 young Namibians were sponsored
by Namdeb at tertiary academic institutions in
southern Africa, to pursue studies in various
technical disciplines core to Namdeb’s operations;
25 of these students were from historically
disadvantaged groups and nine were female.
Oshipe Development Fund, a wholly-owned
subsidiary of Namdeb, contributes to small
enterprise development through financial
assistance, ongoing monitoring and business
advice. To date, Oshipe has invested N$8,9
million in seven businesses, of which N$3,6 million
(73%) were in five projects by the end of 2007.
Ten bursary holders completed their studies and
took up employment with Namdeb as graduate
trainees in 2007, and another five were in their final
year of studies. Twelve bursaries were awarded for
the year 2008 in the fields of engineering, control and
instrumentation, metallurgy, mining, administration
and geology. This takes the total value of Namdeb
bursaries in the year ahead to N$2 million.
In April 2007, the Office of the Prime Minister
appointed consultants to design a transformation
strategy for Namibia. This process of Transformational
Economic Social Empowerment Framework
(TESEF) incorporates a number of the key principles
that Namdeb has incorporated in its preferential
procurement activities, and the company contributes
to TESEF at its own operations, within the Namibian
Chamber of Mines, and at strategic and national level.
Namdeb also operates a grant scheme which
provides financial assistance with no payback
obligations to deserving Namibians who wish
to further their studies. During 2007, 187 people
benefited from the scheme, including 63 dependants
of Namdeb employees. Both the bursary and grant
schemes supplement talent management and
are aligned to the human resources development
plan as outlined in the national ‘Vision 2030’.
Corporate social investment
Details of these and other skills development
initiatives can be found on pages 30-32.
In pursuit of its business goals, Namdeb is
committed to sustainable development, especially
in the local communities where it operates.
The Namdeb Social Fund is the country’s
leading corporate social responsibility fund,
and has donated over N$20 million to various
beneficiaries since its inception in 1994.
In 2007, the fund contributed N$3,3 million to some
40 projects in areas including education, health
and welfare, community development and sport
development. Education was the biggest beneficiary,
receiving 36% of the fund’s donations; this was
followed by health and welfare (16%), community
development (12%), public affairs (12%) and small
Outlook for 2008
The Sida Ei !gûs project, which commenced full
implementation in the fourth quarter of 2007, set the
conceptual framework for the future of Namdeb land
operations. If fully implemented, the strategy holds
immense potential to reposition the land operations
as a much smaller and decentralized business
unit, while still making a significant contribution
to production and revenue for its shareholders.
However, it must be accepted that it will not be
able to sustain the current levels of employment
and the overheads associated with maintaining
the town of Oranjemund. We have – over the last
five years or more – been communicating to all
stakeholders the challenges posed by the declining
carats profile and the need to prepare for the lower
production outputs we are witnessing today.
There remains potential if the Carats Tomorrow
projects are able to add new reserves that can
extend the life of mine and save some jobs. We are
therefore committed to pursuing these opportunities
in line with our chapter 2 BHAG strategy, to ensure
that the company delivers 10 million profitable
carats and a distributable amount of N$1,1 billion
to our shareholders by 2010. This can only be
achieved by ensuring that the organisation is quick
and effective in its response to challenges at both
an operational level and in the global market.
The next two years will therefore see significant
changes as we strive to position Namdeb for future
growth with a structure and culture that is ‘fit for
purpose’. The fact that we are witnessing many
fundamental changes within our company is a
sign of strength and that we are indeed a learning
and proactive organisation. It is a testimony to
our tenacity and flexibility that we continue to
thrive in rough times, as we have done through
the 72 years of diamond mining in this country.
Inge Zaamwani-Kamwi
Managing Director
21
22
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Economic
performance
23
Innovative technology
pays dividends
Diamond Area No 1: Over one million carats
produced on land
Diamond Area No 1, situated on the south-western
coast of Namibia, is an important contributor to
Namdeb’s production. The carat production fell short
of the budgeted target by 7% and the tons treated
by 5%. The main factor in the negative variance in
Diamond Area 1 was that 3 Plant was not in operation
for approximately five months due a fire incident that
damaged its motor control centre. The impact was
mitigated by treating the diamondiferous material at
4 Plant on a continuous operation bases.
The project has developed to the stage where a test
production unit is required to verify certain critical assumptions
in order to substantiate the business case, and the necessary
preparations to start construction of this unit by the end of
2008 are on track.
The Jet Rig inter-tidal corridor sampling machine is in the
process of gathering bulk samples, while the Seawalker
platform is being converted for sampling in the ultra shallow
water during 2008.
Production ramp-up from this potentially high prospective
block is scheduled to commence in 2009.
Conventional mining operations at 3 Plant, 4
Plant, Recovery Tailings Retreatment (RTR) plant,
Pre-treatment Facility (PTF), Pocket Beaches,
Elizabeth Bay and Orange River Mines continued.
Technical challenges were experienced at the RTR
plant during the first quarter of 2007. These were
resolved during the year. The planned tailings dump
retreatment operations at 3 Plant were postponed as
additional ore of economical grade became available.
Mining at Pocket Beaches Site 2 was completed
with the depletion of the ore body. The plant and
workforce were successfully deployed to Sites 11 and
12. Commissioning of the plant started during the
last quarter of 2007 and full production is expected
during 2008. The final recovery facility was relocated
to the Orange River Mines to recover diamonds
from stored X-ray tailings. At Elizabeth Bay, the
upgraded front end was successfully commissioned.
Inshore Project at advanced stage
Project work to prove the technical and economic
viability of exploiting the Inshore mining area is at an
advanced stage.
This area comprises the Inter Tidal Corridor and Ultra
Shallow Water portions of the land-based mining
licence, and is typified by shallow water and high
energy surf which is inaccessible to sea-going vessels.
Jet rig sampling platform in operation
Mining Area 1
The mini-mine concept has been proven successful over
the past two years as an effective way of mining accreted
areas and spreading risk in the north of Mining Area 1 (MA1).
24
Namdeb Annual Review 2007
Economic
performance
The same concept is currently being applied to
the G100 mine in the south of MA1. These smaller
areas improve the management of sea walls and the
creation of clear workplace accountability on site.
The mini-mines have contributed to the increased
carat production and extended life of MA1.
Because of increased hauling distances, Wet In-Field
Screens have been erected at the most northern
mines to decrease hauling and plant costs. The Wet
In-Field Screening product is approximately 30% of
the run-of-mine volumes.
Namdeb Annual Review 2007
continued
were treated, of which 2,7 million tons were mined
by contractor B&E. Total waste removed in 2007
amounted to 4,5 million tons.
Orange River Mines also retained its NOSCAR status
for the ninth consecutive year, and obtained OSHAS
18001 accreditation; it also retained its ISO 14001
status. It is worth noting that out of the top 100 mining
companies in southern Africa, the Orange River Mines
were placed second for safety. The rehabilitation of
old, worked out mining areas and management of
environmental impact on new areas continues to be
a priority.
Orange River Mines
The Orange River mining area stretches from the
Orange River mouth in the west to Sendelingsdrif
in the east and currently focuses on the mining of
ancient gravel terraces at Daberas. The current mining
plan indicates a remaining production life of two and
a half years at Daberas, ending in the second quarter
of 2010.
Elizabeth Bay Mine: record performance
However, overall resource depletion of the Orange
River mining area is still in its infancy as only
Auchas and Daberas have been partially mined to
date; significant resources still remain at Arisdrift,
Auchas Lower, Auchas (remnant mining), Obib and
Sendelingsdrif. A pre-feasibility study has been
completed on the Sendelingsdrif deposit so that
mining may start once Daberas is depleted. However,
current resource grade renders Sendelingsdrif
unprofitable.
The mineral resource department was able to add an
additional 150 000 carats to the resource in 2007. The
crushing capacity of the Northern Area Sampling Plant
(NASP) was improved by the installation of a mobile
crusher unit as part of the flow sheet. A working 3-D
geological model has been introduced to manage the
resource more effectively. 2007 saw high Mine Call
Factors (MCFs) in the first half of the year and low
MCFs in the second half, resulting in an average MCF
of 0,95.
In order to better get a firm understanding of the grade
of the resource at Sendelingsdrift, a sampling exercise
was initiated in 2006 which continued through 2007.
This exercise will only be concluded at the end of
2008. Based on the success of the sampling results, a
full feasibility study maybe will be initiated that will lead
to the construction of Sendelingsdrif mine.
In 2010, Sendelingsdrift may become the next mine in
the Orange River Area.
The bulk of the run-of-mine material originated from
the southern regions of the ore body, where bigger
stone sizes and high average grades occur. Due to its
close proximity to the sea, dewatering of mine sites
was a challenge, which was overcome with additional
pumping capacity.
In 2007, a total of 85 000 carats were recovered from
Daberas Mine. Altogether 6,1 million tons
Northern Areas Mines received its tenth consecutive
NOSCAR, obtained OSHAS18001 accreditation
and retained ISO 14001 certification. It obtained the
number one position in the top 100 mining companies
in southern Africa in safety. No lost time injuries were
recorded during the year.
A new stripping contract of 1,8 million tons was
awarded to HPC Civils with RCC/Teichman continuing
with an additional 1,3 million tons. Blasting activities
continued as normal in the blocks where consolidated
material was encountered.
MineSight, a mine planning software package, was
introduced to assist with effective monthly plans. The
Phase II upgrade of the primary crushing section was
successfully commissioned and the tonnage through
put was ramped up to the design capacity of 800
tons per hour. Minor punch list items are still to be
addressed in 2008.
The auxiliary tip had a lower than expected availability
which resulted in a tonnage shortfall of 9%. The carat
recovery was 3% above the budget of 331 000 carats.
This was the highest carat recovery for any value centre
in recent history.
In the continued effort to eliminate diamond theft,
investigations by the security department uncovered a
syndicate operation – resulting in the discharge of two
employees.
Northern Areas Midwater Production
The management of the Epia/Trans Hex midwater mining
contract was taken over by Namdeb from DBMN in
April 2007. The vessels mined 87 731m² of seabed and
recovered 37 334 carats in 2007. This exceeded the
expected production by 33%. A new agreement was
negotiated for a further period of two years.
The larger-than-expected average stone size
contributed to a very good financial performance. The
increased stone size was mostly due to shortfalls from
the land-based contractor being made up by additional
production from the shallow marine operations. During
the course of 2008, it is anticipated that the shallow
marine sector will expand by 33% with the addition of
three more vessels.
Pocket Beaches Phase 2 implemented
Several diamond-bearing ore pockets have been
identified and sampled in the area between Chameis
Bay and Bogenfels Arch. The first, Site 2, which
was brought into production in March 2004 using
conventional mining methods and a mobile treatment
plant, was depleted during early 2007.
Phase 2, focusing on the mining of Site 11 and
Site 12 (which contain a number of rich areas), has
commenced production during 2007. Concurrent with
dredging of overburden in the highly permeable water
rich areas, conventional dry mining commenced in
other more accessible areas.
Beach and marine contractor operations
Specialised cut-off wall technology is employed to form
an active buffer, preventing uncontrolled seepage of sea
water into the mining blocks. These will be drained after
dredging and mined in the normal dry-mining fashion.
Contractor operations recovered 29 776 carats in 2007
from the combined surf zone, shallow marine and landbased operations. This was 1% below the expected
production.
Although fully operational, production ramp-up is
slower than planned and technical challenges are
receiving the necessary attention.
25
26
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Building a sustainable
Oranjemund
About 10 years ago, Namdeb started a major initiative
of building a sustainable Oranjemund that will
continue to exist independent of its mining operations.
Building a positive legacy is one of the three strategic
objectives of Namdeb’s business strategy adopted in
2007 and the sustainability of the town forms a key
initiative under the positive legacy leg of the strategy.
This will trigger the process of instituting a Local Authority
Council in terms of the Local Authorities Act of Namibia. The
Council will be preceded by local authority elections under
the guidance of the Electoral Commission of Namibia. We
expect the Local Council to be in place early 2009 while open
access and land transactions can only take place after the
Local Council is instituted.
In 2004 Namdeb registered Oranjemund Town
Management Company (Pty) Ltd (OTMCo), a whollyowned subsidiary of Namdeb, as a vehicle to drive
the sustainability initiative and secure a long-term
future for the town. Together with senior Namdeb
management and the Mineworkers Union, the residents
of Oranjemund and local businesses are fully
represented on the board.
Two major issues that might delay the institution of the
local authority are the agreements between Namdeb and
Government on asset transfer, maintenance and operation,
and the proclamation of the Oranjemund-Rosh Pinah road to
link Oranjemund with the rest of Namibia.
The purpose of the OTMCo is fourfold:
•
•
•
•
To implement and manage the town
establishment process to declare Oranjemund
as a Local Authority in terms of the Local
Authorities Act (Act 23 of 1992);
To initiate and develop a diversified economic
base for Oranjemund to ensure that the town will
continue to exist without the mining activity;
To build capacity for effective town
management and administration to ensure
that when the Local Authority is established,
the town has the necessary knowledge,
skills and experience for a smooth transition
from a mining town to a local authority;
To administer and manage well-established
municipal and other related services as
a forerunner of a local authority.
Town establishment
The town establishment process will create property
rights and institute a Local Authority Council to
promote town sustainability as it will create security
of tenure and facilitate open access to Oranjemund.
Oranjemund will be ready in September
2008 to be proclaimed as a town in terms
of the Town Planning Ordinance.
Diversify economic base
The Namdeb Board has approved N$5 million to investigate
alternative sustainable economic opportunities that can
support the town and create alternative employment
prospects. Following an open tender process, three
consultants were appointed to conduct feasibility studies for
the development of:
1. Mari-culture in the mined-out ponds;
2. Tourism;
3. Agriculture; and
4. Secondary school and technical training centre
The feasibility studies for mari-culture, tourism and agriculture
are completed while the study on the secondary school
and technical training centre will be completed in August
2008. The remainder of the N$5 million is earmarked for an
integrated mariculture pilot project in one of the mined-out
ponds. A submission was made to the board to approve the
pilot project. The tourism potential of the town has already
attracted interest from large scale private investors to develop
significant tourism products and services.
Capacity building and effective town management
OTMCo has continued to develop local municipal skills
while educating the community through several formal and
informal sessions on their civic responsibilities once the Local
Authority Council takes over the management of the town. The
involvement of the community has increased significantly over
the last two years with more than 100 community members
attending each of the last two formal sessions.
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Namdeb Annual Review 2007
Namdeb Annual Review 2007
Preferential
procurement
Preferential procurement helps ensure that mining
revenues stimulate growth in other sectors. It also
helps offset historical economic inequalities.
Procurement arrangements form a critical
component of the De Beers strategy for
driving economic development wherever it
operates. Procurement policies and procedures
are highly developed in Namibia.
Each of our operations also works with existing
suppliers to assist them in their transition to
becoming BEE-owned and “transformed”
businesses. The Namdeb BEE Policy provides
guidance on how the company can contribute to
Namibian transformation requirements and the
national Vision 2030 development strategy.
Specific guidance on the identification and
prioritisation of historically disadvantaged
local suppliers is given through Namdeb's
preferential procurement policy that requires
the accreditation of a supplier’s BEE status.
Preference is given to enterprises owned by
HDNs, BEE enterprises and Namibian enterprises.
The Namibian Preferential Procurement Council
(NPPC) is working with the government to
develop consistent HDN criteria and guidance.
In 2007, Namdeb spent US$7,8 million with HDNowned, empowered and influenced businesses.
This expenditure is likely to increase as the national
framework is progressively implemented.
It aims to foster a culture of entrepreneurship
among historically disadvantaged Namibians
(HDNs), promote the development of commercially
viable and sustainable businesses, and facilitate
the transfer of capacity to Namibian suppliers.
Namdeb: Value of spend - accredited vs not yet accredited suppliers
Jan 07 - Dec 07
Millions
NAD 100
NAD 90
NAD 80
NAD 70
NAD 60
NAD 50
NAD 40
NAD 30
NAD 20
NAD 10
NAD
Jan-07
Feb-07
NPPC accredited
Not yet accredited
Mar-07
Apr-07
May-07
June-07
July-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
29
30
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Social
performance
During the year under review, Namdeb improved
benefits to its employees by;
• Allowing employees on one-year, fixed term
contracts to be registered as members of the
Provident Fund.
• The introduction of the Sida Ei !gûs incentive
scheme by incorporating all other schemes into
one team based scheme for all employees from
A-band to D-band.
Total employees per work area
Mining Area 1
Orange River Mining
Northern Areas Head office Total 2 429
249
262
42
2 982
Status of employees
Citizens Permanent residents Expatriates 2 880
63
39
Employment type
Permanent Fixed term-contractors
Contractors Temporary Total 2 435
547
54
56
3 092
Labour turnover
2002 11,0%
2003 6,7%
2004 9,1% (total turnover)
6,2% (excluding voluntary separation)
2005 6,0%
2006
9,7%
(total turnover)
5,0%
(excluding dismissals and retirements)
2007
13,0%
(total turnover)
6,0%
(exclude dismissals, retirements and voluntary separations)
A model union relationship
The Mineworkers Union of Namibia (MUN) is the
recognised union in the mining industry and most
of Namdeb’s employees (69,1%) are members.
During the year under review, Namdeb and
MUN signed an occupational safety, health and
environmental (SHE) Agreement which is aimed to
set down principles and procedures which shall
govern the relationship in respect of SHE matters.
Namdeb has introduced the policy on voluntary and
random testing for alcohol and drugs. This policy has
a preventive emphasis in the form of early detection
and rehabilitation. This initiative will improve safety
conditions at Namdeb and will also undoubtedly
have a positive spin-off on the quality of work and
family life which we at Namdeb strive to nurture in
accordance with our values, especially that of care.
Considering the travelling times for our employees
who work continuous operations at our Orange
River Mines, Namdeb applied to the Ministry of
Labour and Social Welfare for an exemption from
the seven-days-on–seven-days-off regulations, to
allow 14-days-on-14-days-off. With due regard
to employee safety on the road, the company
extended the mustering point from Keetmanshoop
to Tsumeb. This change enabled employees to
spend longer periods with their families back home.
Building our skills base
Namdeb is committed to the development and
enhancement of critical mining skills. Thirtythree young Namibians are currently sponsored
by Namdeb at tertiary academic institutions
in southern Africa, pursuing studies in various
technical disciplines core to Namdeb’s operations.
During the year under review we sponsored 27
bursars of which 25 were historically disadvantaged
and nine were female. Ten designated group
bursary-holders completed their studies and
took up employment with Namdeb as graduate
trainees. Another five are in their final year of
studies and will commence work in 2008.
Twelve bursaries were awarded for the year
2008 in the fields of engineering, control and
instrumentation, metallurgy, mining, administration
and geology. This takes the total value of Namdeb
bursaries in the year ahead to N$2 million.
Some N$710 000 was spent in 2007 on twenty-nine
full-time employees who were on developmental
programmes. These programmes prepare them to
be appointed to positions held by non-citizens, and
to enhance their supervisory and training skills.
Namdeb also operates a grant scheme which
provides financial assistance – with no payback
obligations – to deserving Namibians who wish
to further their studies. As of 2007, a decision
was undertaken to allocate the grants twice a
year to benefit more deserving Namibians.
Technical training also plays an integral role
at Namdeb. Training for artisans, mining and
metallurgical operators is on-going to ensure that
we keep abreast of technological advancements.
An amount of N$415 813 was contributed
towards tuition fees for meritorious Namibian
students studying at various institutions in different
fields. During 2007, 187 people benefited from
the scheme. N$129 865 of this was awarded
to 73 dependants of Namdeb employees.
Both the bursary and grant schemes supplement
talent management and are aligned to the human
resources development element of Vision 2030.
There are various training and development
initiatives ongoing at Namdeb. The Namdeb Self
Study Assistance scheme encourages employees
to further their studies in fields of their choice; on
successful completion, they receive 87,5% payback
of the money they used to study. Approximately
N$150 000 was spent on employees in 2007.
Namdeb collaborates with the Maccauvlei
Learning Academy to develop employees. The first
programmes were introduced in the early 1990s and
to date approximately 250 employees have gone
through these programmes.
Technical training also plays an integral role
at Namdeb. Training for artisans, mining and
metallurgical operators is on-going to ensure that
we keep abreast of technological advancements.
In 2007 N$676 581 was spent on Namdeb
artisans through various external courses.
During the year under review 50 job attachments
from Namibian institutions such as NIMT, Valombola
Vocational Training Centre, Windhoek Vocational
Training Centre and the Mechanical Training Institute
were accommodated. In September 2007, 25 trade
bursars were offered bursaries as electricians, diesel
mechanics, millwrights and fitter and turners.
A highlight of 2007 was the Sida !nans
teambuilding and diversity training intervention.
This resulted in a better understanding of
diversity and improved teamwork and cost the
company about N$3 million. Employees from the
Managing Director down to the lowest category
of employees have attended this training.
31
32
Namdeb Annual Review 2007
Social
performance
In support of harnessing talent, the young
professional’s forums have proved to be hugely
successful. Such forums allow our graduates from
all disciplines the opportunity to share and learn
from each other as a peer group, as well as from
senior managers who share their experiences. We
have approximately 30 Namibian employees in our
employment who fall within this category at any
given time. Their disciplines range from technical
areas of mining, engineering, metallurgy, and mineral
resources to those of human resources and finance.
Safety
Our principles require all Namdeb operations to
adhere to national safety legislation and work
towards best practice safety standards such as
OHSAS 18001 and the NOSA Integrated Safety,
Health and Environmental System. We work with
regulatory agencies, employee representatives
and local communities to promote partnership
on safety issues and enable a supportive and
accident-free safety culture. All employees and
contractors follow health and safety practices
consistent with our health and safety policy. We
conduct regular internal and external health and
safety audits to evaluate our performance.
Key risks
All occupational health and safety risks are managed
through ongoing hazard identification and risk
assessments, as well as implementation and
monitoring of control measures to reduce such
risks. A Namdeb risk log is kept for all identified
risks. The six top safety risks have been identified
as follows and are managed through critical
procedures and emergency response plans:
•
•
•
•
•
•
Vehicles
Isolation/electricity
Height work
Confined space work
Lifting operations
Flooding
Namdeb Annual Review 2007
33
continued
Managing these risks requires stringent
adherence to standards developed to ensure
safe conditions and efficient operations. It also
requires a culture of safety consciousness and
safe behaviour by the workforce, reinforced by the
participation of management, systematic training
and regular internal and third party audits.
Preventing fatalities
All incidents are thoroughly investigated and
reviewed with a clear view to achieve our zero
fatalities target. During November 2007, Namdeb
recorded six million fatality-free shifts.
Management systems
All Namdeb operations have five-star platinum
and NOSCAR status on the NOSA Integrated
SHE System. Since 2005 all our operations
have been listed on the NOSA International
Top 100 Mining Companies list and in 2007
Elizabeth Bay Mine was awarded first position
with Orange River Mine as runner up.
During November 2007 Namdeb achieved a
new milestone by obtaining OHSAS 18001
certification. The current Lost Time Injury
Frequency Rate is 0,17 (per 200 000 hours).
We require contractors to adhere to the same
standards as our own employees; contractors
are required to attend induction programmes
before working on mine sites. When contractors
are found to have insufficient skills or knowledge
of our health and safety procedures, they are
provided with the appropriate training before
being permitted to work. Contractors commit to
our safety policy when entering into contracts,
and are monitored on performance.
In the quest for ever-increasing safety, the Alcohol
and Drug Abuse Management Programme
introduced random and voluntary testing
during 2006; this has delivered positive results
with a significant decrease in alcohol related
vehicle accidents over the past two years.
Engaging employees
Formal mechanisms for engaging and building
employee awareness on safety issues include
management briefing sessions, mine wide notices,
safety alerts, refresher safety inductions, “stop
production for safety” sessions, videos, posters,
safety campaigns and formal safety meetings.
The aim of these meetings is to discuss issues of
concern to employees and determine how they
should be addressed. Issues that are not resolved
may be escalated to the Safety Committee.
Namdeb has a safety and health agreement with the
Mineworkers Union of Namibia which allows for a
communication structure within the company, at various
levels, which culminates in a communication forum
involving all representatives at senior management
level. Two full time safety and health representatives,
elected by the workforce, are employed and each
business and functional unit workplace safety and
health representative is elected and appointed in
line with the Safety and Health Agreement.
34
Namdeb Annual Review 2007
Social
performance
Namdeb Social Fund (NSF) donation highlights
Namdeb has successfully helped to develop Namibian
society through its substantial investment in social,
educational and environmental projects. Millions of
Namibian dollars have already been spent on projects
ranging from the largest of beneficiaries to the support
of small business initiatives. Namdeb remains the
largest corporate responsibility contributor to the
socio-economic development of this beautiful nation.
Every year, the NSF donates well over N$1 million and
has since its inception in 1994 donated in excess of
N$25 million. This contribution has significantly aided
the development and prosperity of Namibian society in
line with the fund’s vision to be the leading Namibian
corporate social investment fund.
This social investment reflects a fundamental
commitment by Namdeb to good corporate
citizenship; also it complements and extends
the far larger contribution to Namibia’s economic
development, which the company makes through
its successful business activities.
In 2007, the fund invested more than N$3,3 million in
forty projects and institutions from all over the country.
Education was the biggest beneficiary at 36%,
followed by health and welfare (16%), community
development (12%), public affairs (12%), and small
business development (11%). Other beneficiaries were
in the categories of youth & development, and sports.
The following are some highlights of projects that
received significant donations in their respective
categories:
Namdeb Annual Review 2007
continued
•
•
•
•
•
•
•
•
•
•
•
•
•
•
NDTC: N$100 000 sponsorship of Project Etango
Health Unlimited Namibia: N$100 000
sponsorship of adolescent sexual reproductive
programme
Dr Christine Swart Opperman AIDS Orphan
Trust: N$50 000 towards the charity orphanage's
activities
Verna’s Academy of Dress Design: N$50 000
sponsorship of the academy’s annual activities
Cancer Association of Namibia: N$50 000
sponsorship of the association’s activities
Community development (N$396 852)
Education (N$1 221 225)
Waldorf School Windhoek: N$200 000 donation
towards the purchase of equipment for the
chemistry and science laboratories
Southern Cluster: N$200 000 towards the
construction of two classroom blocks for the
secondary school in Lüderitz
ETSIP: N$200 000 towards the GRN education
initiative
Gobabeb Training and Research Centre: N$150
000 donation towards the centre’s research and
training activities
Helena van Rijn Primary School in Lüderitz:
N$87 000 sponsorship towards the purchase
of a school mini bus
Institute for Domestic Science & Agriculture:
N$87 000 purchase of training equipment for
the institution
Michelle McLean Children’s Trust: N$60 500
sponsorship towards the Grade 12 financial
skill training in the Caprivi and Karas regions
Martin Luther High School: N$57 000 for
purchasing of chairs in their assembly hall
Orison Educational Services: N$50 000
sponsorship of the National Mathematics
Congress 2007
WorldTeach: N$50 000 sponsorship of teacher
volunteers
Health and Welfare (N$556 000)
•
•
35
•
•
Aus Community Conservation Trust: N$200 000
donation towards the water recycling plant
Municipality of Karasburg: N$100 000
sponsorship of computer equipment for the
council
NACOBTA: N$61 852 sponsorship of the
production and marketing of material on rural
tourism
Beneficiaries of NSF donation to CLaSH for “Operation
Omakutsi”, which is middle ear surgery to restore
hearing to patients
N$
Education
Bicycles and packs donated by the NSF to volunteers
at Cheshire Home Anamulenge
Public affairs (N$400 000)
Ministry of Trade and Industry: N$200 000
sponsorship of the trade and investment conference
National Park Etosha Centenary Project: N$100 000
towards the production of a map and tour guide
PALDIF: N$50 000 donation towards the foundation
LSI Foundation: N$50 000 donation towards the
foundation
Small business development
(N$350 000)
•
•
•
Namibia National Chamber of Commerce:
N$200 000 sponsorship of the SME toolkit via
Oshipe
Oshipe: N$80 000 sponsorship of the franchise
conference
Elephant Craft Centre: N$70 000 towards
purchasing of the dust collecting equipment and
raw materials
1 221 225
Health and welfare
556 000
Community development
396 852
Small business development
350 000
Youth & development
135 000
Public affairs
400 000
Sports
73 840
E/Bay Discretionary Fund
150 000
NamGem Discretionary Fund
50 000
Total
3 332 917
NSF donation summary Jan-Dec ‘07
2%
5% 2%
Education
12%
Health and Welfare
36%
4%
Community Development
Small Business Development
Youth and Development
Public Affairs
11%
Sports
Sports received N$73 840, Youth and development
N$135 000 and the E/Bay and NamGem discretionary
funds received N$150 000 and N$50 000 respectively.
E/Bay Discretionary Fund
12%
16%
NamGem E/Bay Discretionary Fund
36
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Environmental
performance
ISO 14001: 2004 certification
Namdeb is ISO 14001 certified for all activities,
products and services that the organisation controls
or influences that have or can have a significant
impact on the environment, related to Mining Area
1 (Mining, Treatment, Mineral Resources, Waste
Management and Engineering Departments), Elizabeth
Bay Mine, Orange River Mines and Exploration.
The South African Bureau of Standards (SABS)
conducted an ISO 14001 surveillance audit during
November 2007. Continued compliance of the
ISO 14001:2004 Environmental Management
System (EMS) of Namdeb was confirmed. Nonconformities recorded were related to legal issues
and operational practice and progress with
environmental management plans. All the findings
were classified as minor. Conclusions were that
the system had been improved, management
actions had been taken, and personnel were keenly
committed to maintaining and improving the system.
The complement of environmental staff at
the operations was increased to ensure the
effectiveness and maintenance of the EMS to the
ISO 14001 requirements. A detailed, fast-track
orientation and development plan was developed
to assist with the training of the new recruits.
Year
2004
2005
2007
2007
Major Moderate 0
17
0
7
0
15
0
6
Minor Near-miss
90
30
106
21
113
10
63
15
Environmental incidents
No major environmental incidents occurred and
no fines were incurred during 2007. Moderate
environmental incidents included mostly fuel and
lubricant spillages. Incident trends are recorded to
aid the investigation process, which includes
determining root causes and drawing up mitigation
plans. Whenever it is necessary, internal standards
are reviewed as part of the corrective action. Sites are
established in Namdeb’s licence areas to remediate
contaminated soil. Various designs are tested to
determine an effective remediation process.
Environmental expenditure
The total environmental expenditure for 2007 is
N$9 021 728. This includes working costs, capital
projects and environmental sponsorships. These costs
are for environmental research, rehabilitation, water
management, waste management, environmental
personnel, environmental training, administration,
environmental management systems and consultancies.
Environmental incident type trends for 2007
Identifying plants of conservation importance
in areas to be mined is the first step in
developing practical management actions
54%
Spillage of fuel and lubricants
(outdoors and > 25 litres indoors)
0%
0%
Incorrect waste seperation
18%
Release of hazardous substances into
the environment (e.g. paint, fluoresent
tubes, batteries, radiation sources
Spillage of fine tailings (slimes)
1%
Illegal dumping and littering
4%
Spillage of effluent (e.g. sewage)
16%
Wildlife and plant incidents
(disturbances, collection,
killing/hunting illegal
fishing)
or illegal
fishing)
4%
Misuse of natural resources (e.g.
water, electricity)
0%
Disturbance of historical,
paleontological and
archaeological sites
2%
Other environmental incidents
1%
Uncontrolled driving off
existing tracks and roads
37
38
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Environmental
performance
continued
Fresh and sea water consumption in 2007
4%
Fresh water consumption in 2007
10%
29%
65%
6%
86%
Mining fresh water
Mining fresh water
Town water
Re-used/recycled water
Mining seawater
Town water
Environmental Expenditure
Costs
(N$) 2007
Costs
Environmental Expenditure (N$) 2007
Capital Costs
5 406 075
Working Costs
3 496 415
Sponsorships
119 238
Total
9 021 728
Water consumption
Namdeb uses mainly sea water (86% of the total
water consumption) and only a small portion
of non-potable water for its mining operations.
Processing plants recycle a large portion of their
water. Only one third of the consumed fresh water
– all abstracted from the Orange River – is used for
mining operations; the remainder is for domestic
consumption. Some six percent of the freshwater
is recycled and re-used for the watering and
maintenance of public parks and the local golf course.
Impact assessments and monitoring
The Environmental Impact Assessment (EIA)
process is conducted in all Namdeb’s operations
to enable the company to identify various potential
environmental impacts at an early stage of a
project, operation, mining or prospecting activity.
Namdeb has dedicated internal human resources
to ensure environmental requirements are
assessed and included in the mine life cycle from
the exploration phase to the closure of a mine.
A baseline survey was conducted for monitoring the
environmental effects of sediment discharges from the
Uubvlei treatment plant on sandy beach and rocky
inter-tidal biota in Mining Area 1. The monitoring of
environmental effects of Pocket Beach mining on sandy
beach and rocky inter-tidal biota continued. A baseline
survey was conducted of the near-shore marine
benthic communities in the Bogenfels area. The annual
monitoring survey of inter-tidal and sub-tidal rocky
shore communities at Elizabeth Bay also continued.
Risk assessments were conducted for the
Large Diamond Recovery (LDR) project and the
Geological Sampling Recovery (GSR) project.
Energy consumption and
greenhouse gas emissions
Namdeb’s main energy consumption is
related to fuel used in its earthmoving
and vehicle fleet, and in generators.
Namdeb re-uses oil by burning this to generate heat
for drying gravel during the sorting process. Some
oil is recycled. Employees are briefed regularly on
the need to save energy, and labour shift systems
have now been adapted to enable energy savings.
Initiatives to manage the mining footprint
Namdeb’s rehabilitation plan was finalised at the end
of October 2007. Seven pilot projects were devised
to more accurately cost the tasks of rehabilitation to
feed into the detailed cost estimate for the March
2008 board meeting.
The first of the pilot projects have been completed
and signed off. These were the rehabilitation of
overburden dumps and mined areas at Auchas and
disturbed areas along the road from Sendelingsdrif to
Oranjemund. The other pilot projects in Mining Area 1
and along the road from Oranjemund to Lüderitz
are ongoing.
A site visit was undertaken by the Environmental
Department of De Beers RSA Group Services
to the Group Exploration Namibia Project in the
Caprivi. The visit was aimed at assessing risks
associated with the exploration activities and
developing mitigation plans. Other objectives
included the initiation of an environmental
monitoring and reporting programme and the
introduction of the Exploration ECOHS guidelines.
De Beers Marine Namibia, on behalf of
Namdeb, awarded a contract to the Centre for
Scientific and Industrial Research (CSIR) for:
• reviewing and updating the Atlantic 1 Mining Licence
Environmental Management Programme Report;
• developing an Environmental Impact Assessment
and Environmental Management Plan for
Mining Licences 128 A, B and C; and
• conducting an Environmental Impact
Assessment and developing an Environmental
Management Plan for the feasibility phase
of the Marine Dredging Project.
All three contracts are still in progress.
The effects of disposal of fines into the ocean is
monitored in long-term studies of marine organisms
39
40
Namdeb Annual Review 2007
Namdeb Annual Review 2007
41
Environmental
performance
continued
Partnering with governmental and private institutions
has enabled Namdeb to go beyond simply complying
with minimum legal requirements. The Millennium Seed
Bank Project, under the umbrella of Namibia’s Ministry
of Agriculture, Water and Forestry and Royal Kew
Botanic Gardens in London, assists with developing
restoration techniques. Rehabilitation planning is coordinated with the Ministry of Environment and Tourism’s
planning for the future national park and ministry staff
is directly involved in Namdeb’s rehabilitation projects.
publications, contributions to park management and
tourism consultancies, as well as park infrastructure
and joint awareness events are some of the initiatives
in which Namdeb has partnered with SKEP.
An inter-ministerial committee has been mandated
by the Namibian Government to provide input
to Namdeb’s strategic business and closure
plan. A familiarisation visit took place in 2007.
An established marine monitoring programme in licence
areas adjacent to the Namibian coastline ensures that
impacts and recovery rates of marine biota in intertidal and sub-tidal environments are investigated.
A rehabilitation programme is presently being
developed which will schedule rehabilitation
activities over the coming years.
Stakeholder engagement
Biodiversity conservation
In recognizing its responsibility to mitigate the impacts
of mining on the environment, Namdeb supports a
number of conservation projects in the Sperrgebiet.
Namdeb sponsors a research project which
analyses the possible impacts of mining on the
productivity of the Damara tern, a flagship species
to the Namibian coast. This study also allows for the
full-scale study of the birds biology and behaviour,
which would contribute to a better understanding of
this small sea-bird. The study also aims to provide
conservation-relevant outputs for the breeding areas.
Namdeb continues to support the Brown Hyena
Research Project to assess the potential impact
of mining on brown hyena movement and activity.
Brown hyenas are fitted with latest-technology
GPS collars and data are downloaded to track their
movement. This provides insight into their activity
pattern and habitat uses. Should any changes
in their behaviour be detected due to human
disturbance, mitigation measures will be employed.
One of the many rehabilitated areas on our
west coast operations
Namdeb also actively contributes to the Succulent
Karoo Ecosystem Programme (SKEP). Joint
Namdeb participates in the six-monthly bird surveys in
the Orange River Mouth wetland which is a Ramsar site.
Namdeb also supports the removal of alien vegetation
in the wetland by Raleigh International in collaboration
with the Ministry of Environment and Tourism.
To share, determine and improve on best environmental
management practices, stakeholders from
governmental and non-governmental organisations
in Namibia and South Africa were engaged during
the year. These engagements were conducted
via workshops, information sharing forums, ad
hoc technical meetings, joint partnerships, liaison
meetings, site visits, environmental clubs, and regular
environmental articles in the Sperrgebiet Gazette,
as well as telephone and email discussions.
42
Namdeb Annual Review 2007
Associate
companies
Namdeb Annual Review 2007
De Beers Marine Namibia achieves
another record production year
DBMN mined 5,3 km² and produced 1,05 million
carats (3% up on 2006) against the original budgets
of 5,1 km² and 970 000 carats respectively. This
was, for the fifth time in a row, a record annual carat
production from the Atlantic 1 marine mining license.
DBMN made history when production exceeded one
million carats for the first time in 2006. The exceptional
performance in 2007 was mainly due to resource
performance and efficiency improvements.
During the year under review, DBMN successfully
upgraded the mv Debmar Atlantic from a 500mm to
a 600mm mining system at a capital cost of
N$350 million. DBMN also constructed and
commissioned a second crawler for the mv Ya Toivo
at a capital cost of N$100 million.
Resource Development
Pre-production sampling
Pre-production sampling in 2007 in the Atlantic 1
mining licence totalled 40 days during which 398
samples were collected by the mv Coral Sea. The
sampling focused on the development of existing
production and the testing a new sampling tool. Fewer
sampling days were undertaken in 2007 than in 2006
as the company reserve levels were in excess of the
required minimum level. A large sampling campaign
totalling 296 days is planned for 2008 to bring reserve
levels in line with the company’s future revised strategy.
In addition to the above, 702 samples were acquired
in 36 days by the mv Douglas Bay in the same licence
area. The sampling was focused on generating
resource in a new production node. A total of 166
days of mv Douglas Bay sampling is planned for
Resource generation in 2008.
Exploration sampling
Exploration sampling in 2007 in the Atlantic 1 licence
totalled 30 days during which 372 samples were
collected by the mv Douglas Bay. The sampling was
focused on the mud-belt and offshore Atlantic 1,
where 15 days of sampling were conducted in each
of these areas. The sampling within the mud-belt was
a follow-up on previous exploration programmes in
2005, whereas the offshore Atlantic 1 sampling was
conducted in new targets identified with low resolution
geophysical surveys. A total of 30 days of exploration
sampling has been planned for 2008.
Safety, health, the environment and security
A solid safety performance
DBMN retained its NOSCAR, ISO 14001, ISM and
OHSAS 18001 certifications. The Lost Time Injury
Frequency Rate achieved for 2007 was 0,17 – resulting
from two lost-time injuries.
Health
During 2007, DBMN implemented regular drug and
alcohol testing at the work place.
A fourth prevalence survey was held during the period
under review, covering 97% of all DBMN employees.
The company conducts prevalence surveys every
second year, to determine the HIV-infection rate, and
adapts its strategy according to the results.
On-site voluntary counselling and testing (VCT)
continued to make a difference during the year under
review. DBMN makes anti-retroviral therapy available
free of charge to all affected DBMN employees and
their life partners. On-site baseline screening check-ups
are also in place to assess and educate employees on
chronic and acute illnesses.
Environmental responsiveness
The ISO 14001 Environmental Management System
surveillance audits were completed successfully during
2006 and 2007.
Various developments related to the Marine Dredging
Project took place during the period under review:
• During 2006, Enviro-Fish Africa (Pty) Ltd completed
the pre-feasibility phase of the Atlantic 1 dredging
trial environmental impact assessment (EIA)
and management plan review and update. The
environmental clearance certificate for this prefeasibility phase was obtained from the Directorate
Environmental Affairs of the Ministry of Environment
and Tourism in 2007.
43
44
Namdeb Annual Review 2007
Associate
companies
Namdeb Annual Review 2007
continued
• In mid-2007, the Centre for Scientific and Industrial
Research (CSIR) was appointed to: i) conduct an
EIA and develop an Environmental Management
Plan (EMP) for the feasibility phase of the Marine
Dredging Project; ii) review and update the Atlantic
1 Mining Licence Environmental Management
Programme Report (EMPR); and iii) develop an
EIA and EMP for Mining Licences 128 A, B and C.
These reports are currently under review, prior to
submission to the authorities for approval.
The 2006 benthic samples were analysed during
2007. As part of the company’s initiative to streamline
environmental research and monitoring programmes
to better determine and understand the potential
impact and recovery of mining areas. The approach
to and purpose of the benthic surveys were revised
together with the benthic specialist during 2007. As
a result, the number of impact and control sites was
increased from three sites to 22 sites in the Atlantic 1
mining licence area.
The annual benthic sampling survey for 2007 was
based on this revised sampling plan and a total of
563 samples were collected for faunal and sediment
analysis from Atlantic 1 (22 sites) and the mid-water
areas (eight sites) off Bogenfels, Chamais and Kerbe
Huk. It is the first time that such a large sampling
spread was achieved for Atlantic 1 and this effort may
yield useful baseline results.
During 2007, an environmental GIS database was
initiated. The immediate to long-term objective of this
was to re-visit both current and historical data stored
on the environmental data drive, and to collate all
data that can be spatially depicted. This will make
environmental data more easily accessible for other
disciplines such as mine planning and strategic
projects.
Protecting the national resource
One employee was dismissed for breach of trust whilst
a total of three diamonds (3,45 carats) with a value of
N$18 478 were recovered. Continuous improvement
in security systems and training of security personnel
is ongoing.
Human Resources
Skills development
DBMN has career paths and development initiatives
for various core skills, including engineering and
deck cadets, trainee technicians, marine electricians,
trainee production drillers, trainee crawler pilots,
apprentices, officers on full time studies and ratings
in training and graduate trainees. In addition, DBMN
focus on ensuring that our leaders in the company are
adequately skilled with management skills.
DBMN also awards bursaries on an annual basis
including one bursary to the most deserving science
student – the Diamond Award for Science.
Diversity
During 2007, a follow-up diversity survey was
conducted among the DBMN workforce. This survey
aimed at tracking progress made with the company’s
diversity project – Kopano Dantago ("Together we
will win"), which was implemented during the period
under review. The survey showed an improvement
in the understanding of diversity issues. The results
have been analysed, and further action is planned
for 2008 to further improve diversity awareness and
relationships within the company.
Positive labour relationships
The relationship between DBMN and the Mineworkers
Union of Namibia continued to be constructive during
the period under review. As part of this relationship,
the company and the union concluded the 2007/2008
Substantive Agreement that provided for the increases
to basic salaries of employees in the bargaining unit.
No labour disputes, strikes or demonstrations were
recorded during the period under review.
Social responsibility
The DBMN operations take place offshore, so there
are no communities in the immediate vicinity of
operations that are directly affected by it. However,
it is the company’s belief that as a corporate citizen
of Namibia, it should do its best to contribute to the
upliftment of society as a whole, and this is done
through the DBMN Social Responsibility Committee.
During 2006 and 2007, DBMN donated approximately
N$300 000 per annum to worthy causes. Beneficiaries
included the Friendly Haven Shelter for Abused
Women and Children, the Aquaculture Information
Campaign and the Katutura Hospital.
45
46
Namdeb Annual Review 2007
Associate
companies
Namdeb Annual Review 2007
continued
Namibia Diamond Trading Company
In 2007, the sales contract renewal negotiation
was successfully concluded with the birth of a new
company, Namibia Diamond Trading Company
(NDTC). NDTC will, for the first time, sell diamonds
from Namdeb’s production as well as an aggregated
London mix directly to the local cutting and polishing
industry. The contract will last until 2013, during
which time the effects of beneficiation will no doubt
impact positively on the Namibian economy.
NDTC completed the valuation and sale of
2,06 million carats produced by Namdeb
– a decrease of 5% on 2006.
As part of a group-wide De Beers effort to combat
the effects of negative publicity that could affect
consumer confidence – particularly in the light of the
release of the movie ‘Blood Diamond’ – a vigorous
worldwide campaign was launched. In Namibia, a
national campaign entitled ‘Diamonds for Good’
was launched by the Minister of Mines and Energy,
Honourable Erkki Nghimtina. Namdeb contributed
to the national campaign through media and
stakeholder engagement, as well as internal employee
communications across the group. Information packs
focused on the indelible contribution that diamonds,
combined with good government, have made to the
development of Namibia. Packs were distributed
to key stakeholders in government and tourism,
as well as local jewellers and business sectors.
The media campaign included adverts with key
‘Diamonds for Good’ messages placed in all local
newspapers and publications, and on outdoor
media around the country at strategic locations.
Sharing diamond wealth with
less privileged Namibians
The year under review was a busy year for
the NDTC’s project Etango. In addition to
setting up two more centres in Rundu and
Keetmanshoop, the NDTC welcomed Old Mutual
Namibia on board as partner in the project.
Together with Old Mutual, the objectives
for 2008 include the setup of four
additional centres country-wide.
A difficult year for the rough market
2007 was a difficult year, with stocks and bank
indebtedness increasing by mid to high single
digits. Liquidity and cash flow were major focal
points throughout the year as retailers squeezed
manufacturers on price and terms. As a result, prices
softened in the stock growth areas for the first time
since the late 1990s. Prices for larger, better-quality
goods remained firm as demand outweighed supply.
Polished market – mixed reports
In the US, high-end polished stones clearly outperformed the middle and lower-end segments. This
culminated in high-end jewellers and some large chain
stores reporting that expectations had been met or
exceeded, while other chains and independents were
softer. Asia Pacific ended the year on a positive note,
with some retail chains reporting 10% growth year-onyear, despite the low growth of 2% in the first half.
47
48
Namdeb Annual Review 2007
Associate
companies
Namdeb Annual Review 2007
continued
NamGem
Namdeb Properties
NamGem, the diamond-cutting and polishing factory,
is a wholly owned subsidiary of Namdeb. Namdeb and
Lazare Kaplan International (LKI) are in the process of
negotiating the renewal of the partnership, this time on
an equity basis. The partnership was formed to build
expertise and improve performance, particularly in the
marketing of NamGem’s products.
Namdeb Properties is a wholly-owned subsidiary of
Namdeb and owns the Namdeb Centre, in Windhoek,
where the Namdeb head office is situated. Other
De Beers group companies, such as the NDTC,
De Beers Marine Namibia, De Beers Namibia and
Diamdel (Namibia), are also accommodated here.
The Namdeb Centre is a showcase for the company
and is a well recognised landmark in Windhoek.
Improved manufacturing capacity
The addition of a new preparation unit in 2005 bore
fruit in 2007; the company is now able to produce
manufactured goods throughout the pipeline,
from planning and laser-sawing to polishing.
As a result, manufacturing capacity has improved
dramatically and the company is now able to produce
different types of goods, including makeables and
large stones (manufacturing capacity improved from a
maximum size of two to ten carats per stone). The
company plans to recruit an additional 80 polishers in
2008. This will improve the productivity and will also
lead to further employment creation in Okahandja.
Social impact
NamGem remains a major source of employment for
the town of Okahandja and a valuable social partner
within the wider Namibian community. The company
employs 136 people, but its direct and indirect
economic effects are felt by an even greater number
of people.
Local beneficiation
During 2007, NamGem production was made
available to a number of outlets in Namibia,
including retailers and members of Jassona
(the Jewellery Association of Namibia).
Equity deal in the pipeline
The company shows the potential to become a
global player. The technical partner, LKI, has also
indicated that it wishes to take up equity in NamGem.
Negotiations, which were initiated in 2007, are continuing
and are expected to be concluded by the end of 2008.
Exclusive Properties
Exclusive Properties is a wholly-owned subsidiary of
Namdeb Properties and owns a housing estate called
Valco Village in Ludwigsdorf, where 38 houses are let
to company employees, employees of associated
companies and private tenants.
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50
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Corporate
governance
Code of business conduct
and ethics in place
Board of directors
Namdeb executive management committee
Namdeb’s board of directors consists of eight
non-executive directors, five alternate directors
and a full-time managing director. Directors are
appointed by shareholders, each of whom is entitled
to appoint four directors and four alternates. All
directors have unrestricted access to all company
information, records, documents and property. The
board meets three times a year or more frequently if
required. The managing director is appointed by the
board and is an ex officio member of the board.
This committee represents all disciplines in
the company and, under the leadership of the
managing director, manages the company’s
key result areas at executive level.
Board management committee
The Namdeb management committee is a
sub-committee of the board and consists of
six non-executive members. It meets three
times a year. The shareholders are equally
represented at management committee level.
Audit committee
The governance and assurance committee,
tasked with the responsibility of monitoring the
control environment, is in place and functioning
well. The internal audit services manager and
the senior partner in charge of the external audit
attend all meetings. They have unrestricted
access to the chairman of the audit committee.
The audit committee assists the board in
discharging its duties, which are to ensure that
adequate internal controls and systems are in
place for the reliability of the financial results
and accountability for the company’s assets.
These meetings also consider risk management,
internal controls systems, fraud and theft.
Remuneration committee
This is a joint shareholder body responsible
for approving recommendations for annual
salary increases and incentive schemes. The
shareholders are represented by two nonexecutive members from each shareholder.
Internal audit
Internal audit’s role is to give comfort to management
and the board that risks are being properly identified,
managed and controlled. Risk-based audit plans
are prepared annually and are approved by the audit
committee. Formal reports by the different levels are
collated and the managing director annually reports
to the shareholders on all material risks encountered.
Managing business risk
The board is ultimately responsible for risk management.
Management is accountable to the board for designing,
implementing and monitoring the process and
integrating it into the day-to-day activities of the
company. It is management’s responsibility to ensure
that all business risks are appropriately identified,
recorded and managed. The risk-management process
involves the identification of objectives and relevant risks.
Controls mitigating these risks are then documented
and evaluated to determine any residual risk.
The process results in the top risks of the
company being managed at executive level
and reported to the board of directors.
Code of business conduct and ethics
A code of business conduct and ethics is in
place and requires all employees to subscribe
to high moral, ethical and legal standards.
51
52
Namdeb Annual Review 2007
Board of
directors
Inge Zaamwani-Kamwi
Managing Director
Namdeb Annual Review 2007
The board of directors is responsible for governance, group policies and the
provision of reliable information to the two shareholders. It is led by non-executive
chairman Nicky Oppenheimer, and non-executive deputy chairman Joseph Iita.
Deliberation is encouraged on all matters requiring the attention of the board,
although board members, in terms of the Shareholders’ Agreement, do not
have individual voting power. Directors have no fixed term and are appointed
and withdrawn by the two shareholders respectively, in accordance with the
provisions of the agreement.
Nicky Oppenheimer
Joseph Iita
Chairman
Deputy Chairman
Tuli Hiveluah
Vicky Niku-Paavola
Teckla Lameck
Alternate Director
Alternate Director
Alternate Director
Daniel Kali
Robin Mills
Erasmus Shivolo
Alternate Director
Alternate Director
Alternate Director
Management
Inge Zaamwani-Kamwi
Managing Director
Gareth Penny
Stuart Brown
Kennedy Hamutenya
Director
Director
Director
Chris Sivertsen
Paulo Shipoke
General Manager
Group Business Services Manager
Percy McCallum
Tjaart Willemse
Group Human Resources
Manager
Assistant General Manager:
Strategic Projects
Markus Lubbe
Paul Sparks
Group Financial Manager
Assistant General Manager: Production
Hilifa Mbako
Dee Sauls
Group External Affairs and Corporate
Communications Manager
Lorna Mbwale
Godfrey Kabozu
Rob Smart
Director
Director
Director
Group Company Secretary
53
54
Namdeb Annual Review 2007
Namdeb Annual Review 2007
Glossary
ART Anti-retroviral treatment
BSC Balanced Scorecard
DBMN De Beers Marine Namibia
DTC Diamond Trading Company
E/Bay Elizabeth Bay
EIA Environmental Impact Assessment
EMP Environmental Management Programme
GIS
Geographic Information System
GPS
Global Positioning System
GRI Global Reporting Initiative
GSD Group Services Division
ILO International Labour Organisation
KAP
Key Area Performance
LoM Life of Mine
LKI Lazare Kaplan International
LTIFR Lost-time Injury Frequency Rate
MA1 Mining Area No 1
MCF
Mine Call Factor
Statutory information
and contact details
MCM Management Committee Meeting
Company Secretary
Company registration number
Libertha Kapere
C1973
MUN Mineworkers Union of Namibia
NASP
Northern Area Sampling Plant
Business address and registered office
Auditors
NDTC Namibia Diamond Trading Company
Head Office, Tenth Floor, Namdeb Centre
10 Dr Frans Indongo Street, Windhoek
Deloitte
Postal address
First National Bank Namibia
Standard Bank of Namibia
Bank Windhoek
Nedbank Namibia
NEMCOM Namdeb Executive Management Committee
NESRF Namdeb Employees Social Responsibility
Fund
NOSA National Occupational Safety Association
NOSCAR National Occupational Safety Credited
Award
PO Box 1906
Windhoek, Namibia
Telephone: (+264) 61 204 3333
Facsimile: (+264) 61 204 3334
NPPC Namdeb Preferential Procurement
Committee
External Affairs and
Corporate Communications
NSF Namdeb Social Fund
OPSCO Operations Management Committee
OTMC
Oranjemund Town Management Company
Telephone:
Facsimile:
Website:
PTF Pre-treatment Facility
SHE Safety Health and the Environment
VCT Voluntary Counselling and Testing
Bankers to the group
(+264) 61 204 3333
(+264) 61 204 3367
www.namdeb.com
years of
diamond
production
55
Notes
Designed and
produced by
www.namdeb.com