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Our Material Issues

Defining our material issues

Petra defines a material issue as an issue that could significantly impact the delivery of the Company’s strategy and future performance.

While communication with our stakeholders and engagement about matters important to them is an ongoing part of our daily business, in FY 2016 Petra carried out a formal stakeholder engagement process to confirm the Group’s material sustainability issues.

This process involved canvassing both internal (the Petra Board, Senior Management and employees) and external (top ten shareholders, mining analysts, contractors, suppliers and local communities) stakeholders. An independent consultancy was engaged in order to ensure an impartial and transparent process, as well as to encourage honest and frank feedback.

Following the collation of the data, the consultancy then prepares a sustainability matrix to map the top-rated sustainability issues per the various stakeholder groups. Petra management, including Petra’s CEO, then conducted a one-day workshop, led by the consultancy, in order to debate and identify the top ESG issues material to the sustainability of the Group.

Material topics identified are aligned with internal governance processes and operational imperatives, and are therefore managed as part of internal processes that answer to both regulatory requirements and internal KPIs.

FY 2018 Material Issues

The following were identified as Petra’s ‘Material Aspects’, in accordance with the GRI process and guidelines.

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Corporate governance

Effective corporate governance is the backbone of Petra and enables each part of the business to operate efficiently, successfully and sustainably. It is essential from a mandatory perspective to comply with the various governance regulations in each of the jurisdictions in which Petra operates. However, it is also integral to the ethical conduct and culture of the business.

Stakeholders: Employees/contractors/unions, customers, shareholders/bondholders, local communities, host governments/regulators and suppliers

Topic Boundary: Applies to Petra’s business as a whole

Generating economic benefit

By generating economic value for the countries in which we operate, we aim to further enhance the potential for increased living standards and conditions for the country’s inhabitants as a whole, including our employees and local communities. By ensuring a high level of transparency with regards to our economic outputs, we can maintain confidence in Petra’s contributions to society.

Stakeholders: Employees/contractors/unions, local communities, host governments/regulators and suppliers

Topic Boundary: Applies to the Company and to our countries of operation

Consumer demand

If consumers no longer aspire to buy and own diamonds, then there is no future for our business. While diamonds occupy a unique cultural position in that they are used to celebrate our most special moments, their continued acceptance is reliant on the assurance that they are sourced by ethical means and with due consideration for the environment. Petra seeks to influence sustainable consumer demand via its role as a founding member of the Diamond Producers Association.

Stakeholders: Employees/contractors/unions, customers, shareholders/bondholders, local communities, host governments/regulators and suppliers

Topic Boundary: Applies to the Company and to consumers globally

Occupational health and safety

Allowing our people to go home safe from work is Petra’s number one priority and ingrained into everything we do. We also aim to encourage a healthy and happy lifestyle for our employees, taking into account prevalent local health issues, both physical and mental.

Stakeholders: Employees/contractors/unions and local communities

Topic Boundary: Applies to the Company and to our local communities

Employee retention and development

To deliver on our ambitious growth plans, we require a skilled and engaged workforce, pulling together as a team to achieve our shared vision. Petra therefore has a wide range of personal development programmes in place in order to develop our people. Our ‘can-do’ company culture, whereby employees are empowered and held accountable for their actions, also plays a key part in staff retention.

Stakeholders: Employees/contractors/unions, local communities and host Governments/regulators

Topic Boundary: Applies to the Company and to our local communities

Diversity

Petra recognises the importance of diversity, given numerous studies have identified the benefits to business of more diverse teams when it comes to improved problem solving and decision making. However, improving diversity is also a mandatory requirement for companies operating in South Africa and a best practice requirement for UK-listed companies.

Stakeholders: Employees/contractors/unions, local communities and host governments/regulators

Topic Boundary: Applies to Petra’s business as a whole

Labour relations

The labour relations climate in South Africa has been notably volatile. While Petra has experienced largely stable labour relations over the last three years, failure to prioritise and manage this area could lead to issues such as work stoppages and poor company morale. Petra therefore places great emphasis on internal employee communications and initiatives such as the Itumeleng Petra Diamonds Employee Trust, which aims to align employee, management and shareholder interest.

Stakeholders: Employees/contractors/unions, local communities and host governments/regulators

Topic Boundary: Applies to Petra’s business as a whole

Environmental management

We recognise that our value emanates from the natural world and therefore protecting the environment in which we operate is integral to how we run our business. Managing our environmental impacts is a priority for Petra and, in so doing, we align our interests with those of our local communities.

Stakeholders: Employees/contractors/unions, local communities and host governments/regulators

Topic Boundary: Applies to the Company and its local communities

Climate change and energy usage

We recognise the growing importance of climate change, both to our Company and to our stakeholders, and have a carbon reduction strategy in place to assist in minimising our impacts. Managing our energy usage is the most important method by which we can limit our emissions and therefore combat climate change, plus driving energy efficiency leads to significant operational and financial benefits to the Company.

Stakeholders: Employees/contractors/unions, local communities and host Governments/regulators

Topic Boundary: Applies to the Company and its countries of operation

Water management

Water is a scarce resource and we have identified the management of water as one of Petra’s most important environmental prerogatives. Our operations are water intensive and changes in temperature may affect the availability of raw water for treatment processes and impact on natural water sources that sustain the communities around our operations. Petra is therefore committed to utilising water responsibly and efficiently, being mindful of the water scarcity in some of our areas of operation.

Stakeholders: Employees/contractors/unions, local communities and host governments/regulators

Topic Boundary: Applies to the Company and its local communities

Community development and engagement

Maintaining supportive relationships and playing a positive role in our local communities is vital to the sustainable success of our operations. Our mines are typically located in remote areas where there are limited employment opportunities and, as such, are crucial to the current and future prosperity of their local communities. We place great emphasis on engagement with our stakeholders in order to be able to better assess our impacts and to strategically address matters of mutual importance.

Stakeholders: Employees/contractors/unions, local communities, host governments/regulators and suppliers

Topic Boundary: Applies to the Company and its local communities

Legal compliance

The mining sector is one of the most highly regulated industries in the world. This is particularly relevant given the strategic importance of certain commodities to host Governments, thereby ensuring the extraction of these resources in an ethical and sustainable manner. Regulations applicable to mining companies are subject to continual change and Petra has therefore put the necessary management structures in place at each mine in order to maintain its adherence to all local legislation.

Stakeholders: Host governments/regulators

Topic Boundary: Applies to the Petra business as a whole