PRESENTATION TO THE PORTFOLIO COMMITTEE ON MINERALS AND ENERGY SA DIAMOND BOARD

STATISTICS UNPOLISHED DIAMONDS EXPORTS

POLISHED DIAMOND EXPORTS YearCarats ,937.16$38,987,290.22R 170,823, ,875.89$50,858,219.63R 233,442, ,175.07$40,496,171.45R 229,047, ,840.76$56,992,530.00R 341,755, ,523.88$107,555,793.14R 754,842, ,888.03$106,324,976.82R 901,894, ,462.48$134,160,152.35R 1,409,071, ,935.04$93,731,596.75R 827,852, Value

MANAGEMENT REPORT NORTHWEST ALLUVIAL DIAMOND PRODUCTION YearCarats Value R 92, R 528, , R 6,362, ,359.79R 47,155, ,255.91R 113,649, ,607.38R 399,873,161.49

MANAGEMENT REPORT NORTHERN CAPE ALLUVIAL DIAMOND PRODUCTION YearCaratsValue R 917, ,685.63R 3,475, ,717.92R 38,639, ,608.59R 276,120, ,232.29R 383,805, ,035.63R 634,930,235.78

Year Small Scale Mines Cts Large Scale Mines Cts Total Carats % of Small Scale 19961, ,171, ,172, , ,704, ,707, , ,022, ,036, , ,089, ,162, , ,883, ,016, , ,628, ,889,

CORPORATE GOVERNANCE AT SADB Corp Gov Manual adopted on 28 November 2000 Corp Gov Manual adopted on 28 November 2000 Confidentiality agreements Declaration of business interests Revised Conditions of Service adopted on 1 December 2000 Compliance with the PFMA Compliance with the PFMA

COMPLIANCE WITH THE DIAMONDS ACT 56 OF 1986 Interpretation of the Diamonds Act: Ongoing consultation between Board and DME Legal Dept/Chief State Law Advisor Sect 64(1)(d) – Deferment of payment of export duty. Opinion being challenged in court on 12 November 2003

TENDER FOR GDV SERVICES Selection Criteria: Minimum 30% contract value/equity BEE component at management/ownership level Terms of Reference: Examine, assess/value, describe and certify imports/exports in terms of Sect 64, 65 and 72 of the Act and in terms of any Agreement with SADB Tender Process:Outsourced to Transactional Advisor Duration of Contract:2 Years Starting Date:1 January 2004

KIMBERLEY PROCESS End of Tolerance Period, 31 August’03 Peer Review Mechanism Plenary at Sun City October’03 Selection of New Chair: Canada/Botswana

DIAMOND VALUATIONS

GDV REPORTS THE DUTIES OF THE GOVERNMENT DIAMOND VALUATOR 1. To examine and certify the value of unpolished & polished diamonds for export 2. To examine and certify the value of unpolished & polished diamonds imported for sale 3. To examine unpolished diamonds which are offered for sale to the local cutting industry 4. To examine, describe and value diamonds or any confiscated objects held by SA Police for investigations or court exhibits 5. To submit a monthly written report to the SADB containing full details of all duties performed

GDV REPORTS THE VALUATION METHOD Based on the 4 “C’s” Method Carat = Weight or size, Colour = White or Yellow etc. Clarity = Purity and Cut = Model and Shape GDV Price Book compiled from market data Over 1,000 categories listed in Price Book “Full” or “Cut-off” method used depending on volume Large stones >10.8 carats Fancy Colours between 0.33 and 10 carats

GDV REPORTS Valuation of Large Stones and Fancy Colours 1. Use four “C’s” and GDV Price book 1. Use of Rapaport polished list as a guide 1. Personal contact with manufacturers of large stones 1. Refer to current market trends at trading venues 1. Use Prices offered for similar diamonds at tenders

MANAGEMENT REPORT COMMITTEES FINANCE AND REMUNERATION ( M GROTE) FINANCE AND REMUNERATION ( M GROTE) BEE ( M TEMANE ) BEE ( M TEMANE ) TECHNICAL AND STATISTICS ( Dr. H.MATHE) TECHNICAL AND STATISTICS ( Dr. H.MATHE) SECTION 59 ( Dr. J. BREDELL) SECTION 59 ( Dr. J. BREDELL) LICENCING ( Adv. B MANOKO) LICENCING ( Adv. B MANOKO)

MANAGEMENT REPORT APPOINTMENTS OF PERSONNEL Financial Manager Financial Manager Accountant/Bookkeeper Accountant/Bookkeeper IT Officer IT Officer APPOINTMENT OF INTERIM GDV COST CUTTING MEASURES 60% Savings on the GDV Contract 60% Savings on the GDV Contract 40% Savings on the office rental 40% Savings on the office rental ESTABLISHMENT OF A SATTELITE OFFICE IN KBY ESTABLISHMENT OF AN INTERNAL AUDIT TEAM

MANAGEMENT REPORT FORMALIZED WORKING RELATIONSHIP SARS/ Custom & Excise SARS/ Custom & Excise SAPS (Diamond and Gold Branch) SAPS (Diamond and Gold Branch) GOV. Special Investigations Unit GOV. Special Investigations Unit SUCESSFULLY IMPLEMENTED THE KIMBERLEY PROCESS CERTIFICATION SCHEME THE BOARD PROVIDED TECHNICAL SERVICES TO OTHER NEPAD COUNTRIES DURING THE KP CERTIFICATION SCHEME IMPLEMENTATION

INSTITUTIONAL SUPPORT FOR SMALL SCALE MINING MINERALS & PETROLEUM RESOURCES DEVELOPMENT ACT, ( ACT 28 OF 2002) SMALL SCALE MINING DEVELOPMENT FRAMEWORK (DME) AFRICAN MINING PARTNERSHIP – ARTISANAL AND SMALL SCALE MINING CHAPTER

MANAGEMENT REPORT