Corporate Social Responsibility

Namakwa Diamonds is committed to the long-term development of the communities in which it operates to ensure not only the sustainability, but also the development of the wider socio-economic and environmental impacts on such communities.

Economic Development
The Company operates in some of the most remote areas of southern Africa and supports the prosperity and socio-economic development that diamonds can bring to these communities through the direct involvement of local stakeholders. In all of Namakwa Diamonds' operations a requirement for locally sourced labour, goods and services is a key determining factor to the success to date of such operations. The Company also engages in partnerships with local communities and governments in order to develop non-mining related projects for the long-term sustainability of communities and environments for the benefit of all stakeholders.

Furthermore, Namakwa Diamonds is committed to the legislative advancements of equity distribution in certain of the jurisdictions in which it operates, so that communities can benefit from becoming stakeholders in the Group's various businesses, whether mining or trading and beneficiation operations.

Environmental Sustainability
In common with other mineral resource companies, Namakwa Diamonds' operations produce waste tailings and diesel emissions, although the nature of alluvial and kimberlite mining is less intrusive on the environment than the mining of other natural resources such as copper, oil and gas. None the less, Namakwa Diamonds adheres, in all material respects, to the environmental laws in the jurisdictions in which it operates. Furthermore, the Company has implemented a standard process of environmental performance and compliance at each of its operational mining sites, with environmental liability assessed by independent professionals.

Health and Safety
The Company is required to comply with a range of health and safety legislation in the jurisdictions in which it has operations and it recognises that the health and safety of its employees, contractors and service providers is a major priority. As such, Namakwa Diamonds implements periodic independent safety audits to ensure ongoing compliance with its legislative requirements and best practices.

The Kimberley Process
Namakwa Diamonds adheres to the Kimberley Process, which is an unprecedented collaboration between Governments, NGOs and the diamond industry to stem the flow of conflict / blood diamonds. The Kimberly Process was established to reassure consumers that by purchasing diamonds they were not indirectly financing war and human rights abuses, following decades of devastating conflicts in countries such as Angola, Cote d'Ivoire, the Democratic Republic of the Congo and Sierra Leone.

Under the terms of the Kimberley Process Certification Scheme (KPCS), participating states must meet 'minimum requirements' and must put in place national legislation and institutions; export, import and internal controls; and also commit to transparency and the exchange of statistical data. Participants can only legally trade with other participants who have also met the minimum requirements of the scheme, and international shipments of rough diamonds must be accompanied by a Kimberley Process certificate guaranteeing that they are conflict-free.

Historically disadvantaged persons in South Africa
As a result of the changing legislative environment in South Africa, Namakwa Diamonds is obliged to comply with the requirements for black economic empowerment pursuant to the South African Mining Charter by 2014. Whilst the current legislative framework for such compliance is uncertain in several respects, the Mining Charter specifies a number of elements that must be complied with before a mining company can be classified as being a contributor to black economic empowerment.

One of these elements is the entitlement of a company's historically disadvantaged workforce to up to 15% of a mining project's beneficial value by 2009 via a sale (potentially at a discount) and a total of 26% of such value by 2014, as determined by the Mining Charter. The sale to historically disadvantaged persons in South Africa is a stake (typically equity) in each individual South African mining project rather than a direct stake in the Company. In order to satisfy its obligations towards its historically disadvantaged workforce in South Africa, the Company has established an employee trust, and will utilise the trust to comply with the requirements of the Mining Charter, within the timeframes stipulated by legislation.

Mineral policy in South Africa, Angola, the DRC and Namibia
As a result of the changing legislative environment in southern African countries, where governments are creating opportunities for local beneficiation by increasingly imposing requirements to cut and polish diamonds in the country of origin, Namakwa has either obtained or is seeking to obtain trading and beneficiation licences in each of the jurisdictions in which it operates. In particular:

♦  in South Africa, Namakwa Diamonds holds a licence permit through Namakwa Diamonds Trading (Pty) Limited to buy and sell
    rough diamonds in South Africa and a licence permit through Elite Diamonds to cut and polish rough diamonds in South
    Africa; and
♦  in Namibia, the company is beneficially interested in a 42.5% interest in Marine Diamond Manufacturing (Pty) Ltd, which holds
    a licence to cut and polish diamonds until 28 May 2014.
♦  Further details of the impact of local mining and beneficiation legislation on the Namakwa Group, including royalties, in each of
    the jurisdictions in which it operates can be requested. > more

Environmental commitments of the Namakwa Group
In common with other mineral resource companies, Namakwa Diamonds' operations produce waste material and emissions into the atmosphere, water and soil, although the nature of alluvial mining is less intrusive on the environment than kimberlite mining and the mining of other natural resources such as copper, oil and gas.  In order to alleviate the impact of its operations on the environment, the Company has in place environmental and rehabilitation plans at each of its mining operations.

The Company is currently in material compliance with all environmental legislation impacting on its operations and has implemented a standard process of environmental performance and compliance at each of its operational mining sites, with environmental liability assessed by independent professionals.

Namakwa Diamonds' current environmental liabilities across the Group as at 31 August 2010 were US$5.94m.