Diamond mines are often located in remote locations in which local communities either develop as a result of the mining activity, or pre-exist. In either case, and especially in the case of pre-existing communities, it is an absolute prerequisite for any mine to be built that local communities be consulted and supportive of the project. Working in harmony with local communities, including in some case native populations, is part of any mine’s license to operate. It is the same for all diamond mines operated by DPA members in highly remote locations whether they are in Southern Africa, Russia, Australia or Canada.
The relationship DPA members build with local communities are typically built on three cornerstones:
Representatives of the local communities are closely involved in the planning and implementation of all phases, from exploration to discovery, from planning to opening and from operation to the eventual closure of a mine.
Throughout, the shared goal is the turning of a hard-to-reach natural resource into a benefit for the company and the community and country in which the mine is located.
These partnerships are structured so as to deliver long term benefits to the communities – beyond the end of mine life - in terms of skills development, infrastructure building, or economic development.
At the heart of any successful partnership is mutual respect. DPA members make a point of understanding and respecting the values and cultures of the communities in which they operate.
The Renaissance Secondary School in Limpopo, South Africa and the Masagara Village Primary School in Tanzania are just two of many schools supported by DPA members
ALROSA spent US$170M in 2015 on social programmes including housing, health, 3650 cultural events and 536 sporting events. More than 10,000 people attended regular sports activities at the company’s cultural and sports complex.
Partnerships bringing community benefits
Partnerships between local and indigenous communities and diamond mines can take many different forms. They include participation in the environmental assessment of the mine at project stage, the skills assessment and workforce planning, community support programme developments, or participation agreements where the local community directly benefits from the economic success of the operation. No modern mine such as the ones operated by DPA members can today be built or operate successfully without the support of the local and indigenous populations who are recognised and respected key stakeholders.
- The landmark Argyle Participation Agreement was signed in 2004 between Rio Tinto and the Traditional Owners of the Argyle mine, the Gija and Mirriuwung people. It set a new benchmark in Australia for land use agreements between resource companies and Traditional Owners creating not only income streams for future generations of local Aboriginal people, but also significant training, employment and business development opportunities and a voice for Aboriginal people in mining decisions affecting their interests. The agreement ensured protection for local Indigenous heritage sites and set a framework to ensure that diamond mining would benefit ancient cultures without damaging them.
But above all, the partnership of diamond mines and local communities is built on employment, training and development, with every operation aiming to maximise local employment and bring life-changing opportunities to local populations.
- De Beers’ beneficiation programme seeks to enable countries and communities to participate in more of the value-adding steps a diamond takes on its journey from the mine to the consumer. The company ensures that it sells a proportion of its rough diamond production to businesses with operations for cutting and polishing diamonds in-country. This helps to create employment, support the government development plan and aid the transition to post-mining economics. In 2015 De Beers sold $825 million of rough diamonds (equivalent to 20% of its total rough diamond sales) to supply 20 businesses in Botswana, 9 in Namibia, 8 in South Africa and 1 in Canada through its beneficiation strategy.
- Gem Diamonds supplies water to local communities around Ghaghoo mine by maintaining boreholes for their use and by supplying and maintaining where necessary a water treatment plant. Since the mine is in a desert and the climate is arid this initiative has made a life-saving difference within the communities.
- In 2015 ALROSA spent US$170M on social programmes spanning initiatives to improve housing, health, culture and sports. In 2015 that translated to 536 sports events and 3,650 cultural events. More than 10,000 people attended regular sports activities at the company’s cultural and sports complex. Approximately 12,000 ALROSA employees have recharged their batteries in healthy retreats. Hundreds of workers got free housing in dormitories or co-financing of the mortgage.
- Lucara maintains a community liaison office in Letlhakane, the town closest to its Karowe mining operation and participates regularly in traditional kgotla or community meetings at the 18 villages in the Boteti Sub-District to discuss any concerns and identify collaboration opportunities.
- Dominion Diamond contributed $5 million to Northern communities through IBA payments, IBA scholarships and donations in the Northwest territories and Nunavut. In India where Dominion Diamond has 60 employees the company is setting up partnerships with various national, district and village authorities, NGOs and other experts to develop clean water projects.
- Diavik mine also contributes about $5m annually to local communities through participation agreements, community projects, donations and scholarship funding.
Another feature of mining towns is the high proportion of children going to school. Education is a common theme spanning the diamond industry with schools being created, supported and funded from Russia to southern Africa and from Australia to India. It makes sense given the long-term nature of community partnerships to broaden the opportunities for children and adults alike.
- Income from diamonds has helped make it possible for every child in Botswana to receive free schooling up to the age of 13.
- Since the start of the Limpopo Rural Schools Project in 2006 De Beers' Venetia Mine has, invested R29 million (US$2 million) in infrastructural development in education through its social and labour plan
- Petra’s Williamson mine owns and operates the Mwadui primary school which provides free English primary school education to 460 students. The school employs 16 teachers, is the only primary school in the region with formalised computer training and a computer centre, and continues to be considered one of the highest achievers at district, regional and national level. Petra also drives a programme to improve maths and science standards in local schools close to its Koffiefontein mine in Sought Africa. It also invests in adult basic education and training
DPA members generate and pay considerable amounts of taxes and royalties to their host countries and communities.
- In 2015 ALROSA contributed $800M in taxes and $80M in dividends to the Republic of Sakha (Yakutia). ALROSA's total transfers represent more than one third of the budget of the Republic.
- De Beers paid US$934 million in taxes and royalties in 2015.
- Lucara paid $22.4 million in royalties and $46.7 million in taxes to the Government of Botswana in 2015.
- Gem Diamonds’ Letseng Mine in the Southern African kingdom of Lesotho has 1,500 employees and contributes 70% of the country’s corporate tax revenue and 60% of the country’s foreign exchange earnings.
Click to read ABC (Australian Broadcasting Corporation) article about the 10 year celebration for the Argyle Mine Participation Agreeement.
In July 2016 De Beers launched a R6 million beneficiation project to boost diamond cutting and polishing in South Africa. Five businesses run by Historically Disadvantaged South Africans will be provided with a bespoke allocation of rough diamonds, assistance with funding, knowledge on the international diamond industry and how to effectively manae a cutting and polishing factory and mentoring on business strategy, finance, sales, marketing and personal development.
Gem Diamonds, through the Ghaghoo Community Trust, helped establish a
vegetable garden in the Lephephe
Primary School, erecting shade netting
and installing irrigation, as well as
providing an agricultural specialist to
assist the school with successful
management of the garden. The project
aims to educate the children, who are heavily involved
in the gardening and maintenance
process, and to provide produce for the
school and community, bringing vital
nourishment to its pupils, and a source
of income through sale of the produce.
Gary van Vuuren, Advanced Life Support Paramedic at Letseng Diamond mine, Lesotho also provides the local community with emergency medial support within a 35km radius.
Every year more than 2,000 children have a rest in ALROSA's children's camps, and more than 10,000 adults recharge their batteries in the company’s health retreats.
A long-term view and respect for local cultures
Mines have a long life, but many of the cultures they cohabit with are hundreds if not tens of thousands of years old. DPA members are committed to respecting and protecting these cultures.
- The Mining Association of Canada has measured Dominion Diamond’s success with Aboriginal and community outreach and awarded it an AAA rating
Mines seek a finite resource and while they can support communities for many decades, they must eventually close. It is a process that is planned long before they open with activity intensifying a decade or so before that point.
- Mining operations in the Namibian town of Oranjemund have been ongoing since 1928, recovering 70 million carats of diamonds and supporting a significant community. As the life of the mine comes to a close, the industry and Town Council are now working together on ‘Oranjemund 2030’ – a programme to identify visions for the town beyond diamond mining.
One of the world’s longest existing public-private partnerships is the 50 year partnership between the Government of the Republic of Botswana and De Beers. A report examining the economic impact of this partnership on Botswana was published in 2015, produced by De Beers and supported by PwC and Genesis Analytics. This demonstrated:
- The Partnership contributed $4.4 billion to the Botswana economy in 2014, representing 27% of GDP.
- It spent $6 million on 550,000 hours of training and skills development for its employees
- It is the largest single contributor to the economy besides the government itself.
- Since the beginning of its operations in 1982 to a closure target of 2035 the De Beers Jwaneng mine will contribute an estimated US$31 billion to the economy of Botswana.
- Before diamonds began contributing to the Botswana economy there were just six miles of paved roads. Today, an economy greatly aided by income from diamonds has paved the way for close to 7,000 miles of roads making access to all corners of the country easier for its citizens.
A report on the impact of diamond mining in the Northwest Territories 1998-2012
was published in 2013 jointly by BHP Billiton EKATI, Rio Tinto Diavik Mines and De Beers.
ALROSA and Yakutia signed an agreement on socio-economic partnership. Under this agreement, the company transfers about $10M annually to help the national institutions of health, education and culture. In addition, in 2015, ALROSA allocated about $40M to charitable and sponsorship projects for the local community.
Click on the picture and select the second video to see the Botswana Minister of Minerals, Energy and Water Resources, Onkokame Kitso Mokaila, speaking with Martin Rapaport about the impact of diamonds on Botswana.
Turning finite resources into enduring opportunity : A report on the economic contribution to Botswana of the Partnership between
the Government of the Republic of Botswana and De Beers