Letter from the CEO

Letter from the CEO

Dear Stakeholder,

I am pleased to present our second Sustainable Development Report which reflects the Company's progress in the areas of economic, social and environmental performance. As a public company, quoted on the AIM market of the London Stock Exchange, Petra is committed to operating with a high level of transparency and this report reviews our sustainability performance for the financial year to 30 June 2010 (“FY2010”).

We have compiled this report in a web-based format in consideration for the environment. We use the Global Reporting Initiative's (GRI) G3 guidelines as the basis of our report and, since the majority of our operations are in South Africa, we also report on the progress we have made against the objectives set by the Mining Charter.

As a diamond mining company with formal operations based in Botswana, South Africa and Tanzania, Petra is a signatory to the Kimberley Process and 100% of our diamonds are fully traceable and conflict-free. We are proud to provide employment to a total of 4,272 people (including 656 contractors) and we support a wide range of initiatives which are designed to enhance the lives of our employees, their families and the wider local communities. We highlight a number of these projects in the featured case studies, which also introduce some of the key people who bring their personal passion and commitment to drive these projects forward.

Petra has recorded a number of key achievements for the year. The Williamson mine in Tanzania was awarded a certificate to mark excellent labour relations by the Tanzania Mines, Energy, Construction and Allied Workers Union (TAMICO) and another by the Regional Commissioner of Shinyanga which described Williamson as a “role model on forest management and water sources conservation”. In addition, the Mwadui primary school, which is funded entirely by Williamson, was ranked by performance as first in the Kishapu district and 13th overall out of the 14,376 schools in Tanzania, a superb achievement.

Another area where we have excelled during the year is training and development, with a commitment to offering access to Adult Basic Education Training (ABET) in South Africa, a Leadership Development Programme currently in its second year, a commitment to offering internships, bursaries and apprenticeships where possible, the availability of various programmes offering portable skills training and a range of other personal development programmes across various other disciplines.

Petra adheres to the regulations prescribed to mining companies in South Africa by the Department of Mineral Resources, and to the regulations in Tanzania prescribed by the Ministry of Energy and Minerals, and thereby great emphasis is placed on environmental management throughout the life cycle of our operations from exploration to closure. We are committed to, at minimum, adhering to all environmental regulations and legislation and, where possible, applying best practice.

The most important priority for Petra is the health and safety of all employees and we regretfully reported a fatality at the Koffiefontein mine in January 2010, further to an accident in an underground workshop. There had not previously been a fatality at Petra mining operations since 2004 and our team remains highly focused on achieving a zero-harm environment.

We will continue to report on our sustainable development progress annually to effectively engage all our stakeholders and aim to continually improve on our social, economic and environmental performance.

Johan Dippenaar

GRI Indicators

Strategy and analysis

Statement by the CEO about the relevance of sustainability to the organisation and its strategy