Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Health, Safety, Environment, and Community (HSEC)
• Economic Benefits
• Environmental Performance
• Health & Safety Performance
• Stakeholder Engagement
• Community Investments
• Product Integrity

Environmental Achievements

• No major environmental incidents were recorded.
• Over 20 percent of water requirements were obtained through recycling.

Social Achievements

• Rolled out a staff training program in Botswana that highlighted policies and expectations regarding ethical conduct and the whistleblower policy.
• Launched a microcredit loan guarantee scheme in collaboration with the Lundin Foundation, Barclays Bank Botswana, and the Local Enterprise Authority.
• Assisted with the relocation of a farmer to a new location with a suitable replacement borehole.

Governance Achievements

• Increased Board HSEC Committee meetings from 2 to 4 per year.
• Complied with the Kimberly Process.

Climate Goals & Targets

Environmental Challenges

• Unable to repeat the award-winning health and safety performance achieved in 2012.
• Experienced an occupational exposure incident involving hydrofluoric acid fume exposure.
• Microcredit scheme performed below expectations due to differing interpretations of legal agreements and insufficient capacity building of loan applicants.
• Botswana Power Corporation experienced delays in bringing the Morupule B power plant online, resulting in load shedding.

Mitigation Strategies

• Developing a program to attract and train young graduates and professionals for key positions.
• Reviewed procedures and functionality of the facility to ensure the safety of personnel working after the hydrofluoric acid incident.
• Planning to recruit dedicated staff to assist and train loan beneficiaries, monitor and improve the loan portfolio.
• Remaining vigilant about energy consumption.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Local procurement (southern Africa): $44.6 million in 2013

Climate-Related Risks & Opportunities

Physical Risks

• Changes in frequency and distribution of precipitation patterns affecting stormwater runoff and re-vegetation efforts.
• Increased competition for groundwater resources.

Transition Risks

• Multilateral treaty imposing carbon constraints on Botswana impacting energy generation options or increasing costs.

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI-G3, Mining and Metals Sector Supplement

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Governance
• Economic Benefits
• Environmental Performance
• Health & Safety Performance
• Stakeholder Engagement
• Community Investments
• Product Integrity

Environmental Achievements

• No reportable environmental incidents in 2014
• Implemented a tiered incident classification and reporting system
• Relocated diamond cleaning process to Gabarone to improve waste management

Social Achievements

• Lost-time injury frequency rate of 0.2 in 2014 (per 200,000 hours)
• 98% of workforce are Botswana nationals
• Annual staff turnover rate of 7% (down from 13.1% in 2013)
• Implemented a comprehensive safety management system and regular wellness drives
• Community engagement through kgotla meetings and various community projects (e.g., abattoir upgrade, wellness events)

Governance Achievements

• Increased Board HSEC Committee meetings from 2 to 4 per year
• Compliance with the Kimberley Process
• Sustainability reporting transitioned from GRI-G3 to GRI-G4

Climate Goals & Targets

Environmental Challenges

• Electricity supply security due to capacity problems at Botswana Power Corporation
• Water supply security due to complete reliance on groundwater and over-exploitation
• Uncertainty in mineral resource performance
• Addressing stakeholder concerns and ensuring social upliftment of the region
• Maintaining dynamic resource models and addressing yield challenges
• Potential adverse physical impacts from climate change (e.g., changes in precipitation patterns, competition for groundwater)

Mitigation Strategies

• Regular update meetings with BPC for operational planning and alternative electricity source negotiations
• Water conservation initiatives, storm water harvesting, and optimization of processing systems
• Continuous business model updating, operational capacity building, and resource definition projects
• Focus on community engagement, addressing community concerns, and financial assistance programs
• Plant optimization to address yield challenges and technical partnership with OEM
• Updated environmental management plan to address new process plant optimization project

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Expectation of ethical business conduct from suppliers; plan to update supplier screening process to include sustainability performance.

Climate-Related Risks & Opportunities

Physical Risks

• Changes in frequency and distribution of precipitation patterns; increased competition for groundwater resources.

Transition Risks

• Multilateral treaty imposing carbon constraints on Botswana.

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 (Core level)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Environmental Stewardship
• Community Relations
• Economic Benefits
• Governance and Ethical Conduct
• Stakeholder Engagement

Environmental Achievements

• Reduced water use intensity by 12 percent in 2015 to 4.5 m3/carat produced.
• No major environmental incidents recorded.

Social Achievements

• Safety lost-time injury frequency rate (LTIFR) for 2015 was 0.08 (measured per 200,000 hours), down from 0.2 in 2014, with only one lost-time injury during 2015.
• 97 percent of workforce are Botswana nationals.
• Introduced a graduate internship scheme and recruited seven graduates.
• Maintained a low staff turnover rate of 7%.

Governance Achievements

• Senior staff took an Anti-Corruption and Bribery Course in 2015.
• Compliance with the Kimberley Process.
• Received the Prospectors and Developers Association of Canada (PDAC) 2016 Environmental and Social Responsibility Award.

Climate Goals & Targets

Environmental Challenges

• Electricity supply security due to challenges faced by Botswana Power Corporation (BPC).
• Water supply security due to complete reliance on groundwater and regional over-exploitation.
• Uncertainty in mineral resource performance.
• Availability of appropriate technology and skills.
• Addressing concerns of stakeholders.

Mitigation Strategies

• Regular update meetings with BPC.
• Active groundwater level monitoring, technical studies, water conservation initiatives, and storm water harvesting.
• Continued plant optimization, technical partnerships, and dynamic resource models.
• Focus on community engagement and ethical business standards.
• Financial assistance program for local entrepreneurs (KEEF).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Expectation of ethical business conduct from suppliers.
• Improving supplier screening process to consider sustainability performance.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (drought, rainfall)

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI-G4, GRI G4 Mining and Metals Sector Supplement

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• PDAC 2016 Environmental & Social Responsibility Award

Environmental Metrics

ESG Focus Areas

• Environmental Responsibility
• Social Responsibility
• Governance
• Community Relations
• Health and Safety
• Economic Development

Environmental Achievements

• No major environmental incidents recorded in 2016.
• No fines or monetary sanctions for non-compliance with environmental laws and regulations in 2016.
• Dust fallout concentrations in compliance with South African standards.
• Restoration of ground and soil at the AK12 exploration area.

Social Achievements

• Five million staff-hours without a lost time injury.
• Successful completion of the expansion and upgrade of the Letlhakane Abattoir.
• Implementation of the Karowe Emerging Entrepreneur Fund (KEEF), supporting eight micro-businesses and creating jobs.
• Support for three charitable organizations focused on vulnerable women and children, and wildlife protection through the Lady Khama Charitable Trust.
• No community grievances lodged during 2016.

Governance Achievements

• Received the PDAC 2016 Environmental & Social Responsibility Award.
• Registered membership with the Responsible Jewellery Council.
• Compliance training sessions for employees and contractors.
• No confirmed incidents of corruption by employees.

Climate Goals & Targets

Environmental Challenges

• Electricity supply security challenges due to Botswana Power Corporation's capacity issues.
• Water supply security in a dry region.
• Uncertainty in future mineral resource performance.
• Availability of appropriate technology and skills.
• Addressing stakeholder concerns and applying ethical business standards.
• Mining safety risks.
• Extreme weather events and their impact on water resources.
• Business growth challenges due to external influences on the diamond market.
• Regulatory and legal compliance requirements.
• Labour relations challenges such as staff turnover and skills shortages.

Mitigation Strategies

• Regular update meetings with BPC and installation of power-dip protection technology.
• Employment of a full-time hydrogeologist to monitor water use.
• Continuous business model updating and operational capacity building.
• Plant optimization, attractive remuneration packages, and internship programs.
• Focus on community engagement and financial assistance for local entrepreneurs.
• Implementation of rigorous health, safety, and wellness programs.
• Implementation and updating of the Environmental Management Plan.
• Exploration programs and efficient working practices.
• Internal governance measures, controls, and assurance, including Kimberley Process compliance.
• Employee surveys, exit interviews, investment in skills development, and grievance mechanisms.

Supply Chain Management

Supplier Audits: Planned for 2017

Responsible Procurement

• Preference for sourcing materials and services from Botswana.
• Supplier contracts include compliance with Boteti’s code of conduct and respect for human rights.

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns, soil erosion, and groundwater recharge.

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards: Core option, G4 Mining and Metals Sector Disclosures

Certifications: Null

Third-party Assurance: Ibis ESG Assurance (moderate assurance)

UN Sustainable Development Goals

• SDG 1 (No Poverty)
• SDG 8 (Decent Work and Economic Growth)
• SDG 16 (Peace, Justice and Strong Institutions)

Royalty and tax payments support government poverty eradication programs; payroll, procurement, and community investments contribute to economic growth; compliance with Kimberley Process and RJC contributes to ethical business practices.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• PDAC 2016 Environmental & Social Responsibility Award
• Three awards from the Botswana Chamber of Mines for safety performance.

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Employee Retention & Development
• Compliance
• Water & Energy Management
• Mineral Resource Performance
• Business Growth
• Environmental Stewardship
• Stakeholder Engagement

Environmental Achievements

• No major environmental incidents were recorded in 2017. Most incidents were ‘insignificant’, such as small oil spills, immediately contained and cleaned.
• Improved power factor from 0.86 to 0.98 (target 0.99) through power factor correction unit.
• Recycled water equivalent to 13% of groundwater withdrawals.

Social Achievements

• Two lost time injuries reported in 2017 (LTIFR of 0.13).
• 98% of workforce are Botswana nationals.
• Continued support for Karowe Emerging Entrepreneur Fund (KEEF) and Letlhakane Abattoir.
• Initiated Karowe Village Initiatives (KVI) for community-owned projects.

Governance Achievements

• Became a signatory to the United Nations Global Compact in February 2018.
• Achieved Responsible Jewellery Council (RJC) certification.
• No confirmed incidents of corruption by employees.

Climate Goals & Targets

Environmental Challenges

• Longer than anticipated ramp-up of new mining contractor, Aveng Moolman, leading to reduced ore volumes mined and processed.
• Contractor operating inefficiencies.
• Lower ore volumes mined and processed resulting in lower revenues compared to 2016.
• Insufficient loan repayments undermining KEEF's ability to support beneficiaries.
• Disposal of large truck tires remains an unresolved issue.

Mitigation Strategies

• Appointed Lazenby Holdings as new process contractor to increase capabilities and reduce costs.
• Offered voluntary compensation and incentive packages to workers laid off by previous contractors.
• New contractors re-hired a significant portion of previously employed workers.
• Adjusting KEEF strategy for 2018 and beyond, focusing on community-trust owned beneficiaries.
• Exploring options with the Botswana Chamber of Mines and government for tire disposal.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Prioritizes sourcing materials and services from within Botswana (82% in 2017).
• Includes compliance with Code of Conduct and human rights clauses in all supplier contracts.
• Contractor training on compliance.

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns, soil erosion, groundwater recharge

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact

Certifications: Responsible Jewellery Council (RJC)

Third-party Assurance: Ibis ESG Assurance (Pty) Ltd

UN Sustainable Development Goals

• SDG 1: No Poverty
• SDG 3: Good Health and Well-being
• SDG 4: Quality Education
• SDG 8: Decent Work and Economic Growth
• SDG 16: Peace, Justice and Strong Institutions

Lucara's activities contribute to these SDGs through job creation, tax payments, community investments, health and safety programs, education initiatives, and ethical business practices.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• PDAC 2016 Environmental & Social Responsibility Award
• 2017 Ernst & Young Entrepreneur of the Year Award (Pacific Region) for William Lamb

Environmental Metrics

ESG Focus Areas

• Innovation & Economic Performance
• Product Stewardship
• Local Content: People & Supply Chain
• Community Development
• Health, Safety & Wellness
• Partnerships
• Environmental Stewardship

Environmental Achievements

• Significant improvement in water recycling
• Excess water from pit dewatering provided to Debswana
• Expanded new sustainability department

Social Achievements

• Continued support for Mokubilo Farm
• Ground-breaking of the ablution block in Letlhakane
• Plans developed for Letlhakane sports complex
• Karowe First Aid Team won the Inter Mine First Aid Competition

Governance Achievements

• Established a Governance and Assurance Department
• Adopted an improved Enterprise Risk Management Framework and Policy
• Established a new Sustainability Department

Climate Goals & Targets

Environmental Challenges

• Power interruptions
• Dust management
• Water resource management in a semi-arid climate
• Waste management, particularly large truck tires

Mitigation Strategies

• Construction of a second power line to Karowe
• Installation of additional dust filtering and extraction technology
• Improved water recycling and transfer of excess water to Debswana
• Ongoing exploration of waste management solutions for large truck tires

Supply Chain Management

Supplier Audits: Biannual audits of contractors

Responsible Procurement

• Sourcing materials and services from within Botswana region

Climate-Related Risks & Opportunities

Physical Risks

• Changes in rainfall patterns, soil erosion, groundwater recharge

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards (2016): Core option, UN Global Compact

Certifications: Responsible Jewellery Council Code of Practices

Third-party Assurance: IBIS ESG Assurance (Pty) Ltd

UN Sustainable Development Goals

• Not disclosed

Lucara adopts 10 UN SDGs

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Karowe Diamond Mine’s team won the 2019 Inter-mine First Aid Competition

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced Lost Time Injury Frequency Rate to 0.09 from 0.16 in 2019
• Zero fatalities reported

Social Achievements

• Improved female representation in workforce to 31%
• Provided 3,424 training hours

Governance Achievements

• Policy on executive compensation linked to ESG performance in place
• Policy on bribery and corruption in place
• UN Global Compact signatory

Climate Goals & Targets

Environmental Challenges

• High GHG emissions (74,135 tCO2e)
• High water usage (2,450,774 m3 of groundwater with TDS > 1,000 mg/l)
• High waste generation (2,659,506 tonnes of tailings and mineral processing waste)

Mitigation Strategies

• Climate Action Plan for 2021 in development
• Groundwater used in processing, not considered freshwater
• Waste recycling initiatives in place

Supply Chain Management

Responsible Procurement

• Local procurement (88% in 2020)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB, UNGC

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Product Stewardship
• Local Content: People & Supply Chain
• Community Development
• Health, Safety & Wellness
• Partnerships
• Environmental Stewardship
• COVID-19 Pandemic
• Climate Change
• Biodiversity
• Tailings Management

Environmental Achievements

• Reduced GHG intensity – Revenue from 592 tCO2/$m in 2020 to 326 tCO2/$m in 2021
• Reduced GHG intensity – Carats produced from 194 tCO2/kcts in 2020 to 203 tCO2/kcts in 2021
• Reduced GHG intensity - Materials mined (ore + waste rock) from 13.5 tCO2/kt in 2020 to 11.7 tCO2/kt in 2021
• Updated Emergency Response Plan for tailings management in 2021

Social Achievements

• Clara improved safety by offering digital sales channels without need for travel
• Award winning gender diversity
• Zero fatalities and zero lost time injuries in 2021
• Community Investments (US$) of $94,002 in 2021 (excluding COVID-19 response)

Governance Achievements

• Established formalized grievance mechanisms for workforce and local communities
• Maintained a whistleblower process involving a third-party
• Executive compensation includes ESG measurement for health, safety and environment

Climate Goals & Targets

Environmental Challenges

• Climate Change: Mining is a significant energy consumer and emitter of GHGs, Botswana is vulnerable to climatic risks.
• COVID-19 Pandemic: Material adverse impact on local communities and disruption of the diamond market in 2020.

Mitigation Strategies

• Introducing renewables to generate cost savings and reduce GHG footprint
• Clara's digital sales channels reduced the need for travel, improving safety during the pandemic
• COVID-19 response with USD 80,000 in 2021

Supply Chain Management

Responsible Procurement

• Responsible Mining Policy
• On-site supplier training

Climate-Related Risks & Opportunities

Physical Risks

• Botswana's vulnerability to climatic risks

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products
• Introducing renewables to generate cost savings and reduce GHG footprint

Reporting Standards

Frameworks Used: GRI Standards (2016): Core option, SASB, UN Global Compact

Certifications: ISO 45001, Responsible Jewellery Council certification

Environmental Metrics

ESG Focus Areas

• Government & Business Ethics
• Labour Practices
• Human Rights
• Tailings Management
• Biodiversity
• Climate Change
• COVID-19 Pandemic
• Environmental Stewardship
• Partnerships
• Health, Safety & Wellness
• Community Development
• Local Content: People & Supply Chain
• Product Stewardship
• Economic Performance
• Innovation

Environmental Achievements

• Zero reportable spills
• No freshwater used in processing
• Zero discharge
• Completed Khwee village solar project
• Construction of a new 132 kV transmission line
• Planting of 5,701 seedlings across Boteti region

Social Achievements

• Zero lost time injuries and no fatalities
• COVID-19 vaccination rate at 98%
• Launched Karowe Village Initiative (KVI) with three ongoing community projects and a new horticulture project
• Continued construction of the sports complex in Letlhakane
• Provided funds to refurbish the Letlhakane Abattoir
• Implemented a solar power project in Khwee village
• Mokubilo Farm Project generated BWP 431,000 (approximately USD 35,000) in farm revenue
• Long Service Award Ceremony celebrating employees with 10+ years of service

Governance Achievements

• Updated Anti-Bribery and Anti-Corruption Policy and conducted comprehensive training
• Reviewed and enhanced disciplinary code procedure
• Adopted two new policies (Privacy Policy and Anti-Bribery and Corruption Policy)
• Updated position descriptions for President/CEO, Board Chair, Lead Director and Committee Chairs
• Reviewed climate-related governance and disclosures against TCFD recommendations
• Established a Climate Change Working Group

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic
• Climate change risks (hotter temperatures, marginal change in precipitation, increased evaporation, more use of groundwater)
• Maintaining high standards of tailings management
• Reducing GHG footprint

Mitigation Strategies

• Developed alternative sourcing strategies (local procurement initiatives)
• Commissioned a prefeasibility study for a large-scale solar PV project to reduce fuel and power-related GHG footprint
• Aligned operations with the Global Industry Standard on Tailings Management (GISTM)
• Implemented robust occupational hygiene monitoring program
• Developed a human rights due diligence approach

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Local procurement initiatives
• Collaboration with UNDP on a Supplier Development Programme
• SME workshop in collaboration with the Local Enterprise Authority (LEA)

Climate-Related Risks & Opportunities

Physical Risks

• Hotter temperatures
• Changes in precipitation
• Increased evaporation
• Increased use of groundwater

Transition Risks

• Future carbon tax liabilities

Opportunities

• Development of energy-efficient products and processes
• Large-scale solar PV project

Reporting Standards

Frameworks Used: GRI Universal Standards (2021), SASB Standards for Metals and Mining (2021), TCFD

Certifications: ISO 45001, Responsible Jewellery Council (RJC)

Third-party Assurance: IBIS Environmental Social Governance Consulting Africa Pty Ltd

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 13 (Climate Action)
• SDG 17 (Partnerships for the Goals)

Lucara's initiatives contribute to these goals through various programs and partnerships.

Sustainable Products & Innovation

• Clara Diamond Solutions digital sales platform

Awards & Recognition

• Junior ESG Award at the Mining Indaba 2022

Environmental Metrics

ESG Focus Areas

• Sustainability
• Health and Safety
• Environment
• Community Relations

Environmental Achievements

• No reportable environmental matters during Q1 2024.
• Continued work on Lucara Botswana’s adoption of the “Towards Sustainable Mining” initiative.
• Responsible Jewellery Council audit completed in Q1 2024.
• Double-materiality assessment completed for the 2023 sustainability report.

Social Achievements

• Karowe Mine operated for over three years without a lost time injury.
• Twelve-month Total Recordable Injury Frequency Rate of 0.30 at the end of Q1 2024.

Governance Achievements

• Significant progress made towards the Corporate Sustainability Reporting Directive (CSRD).
• Company expects to begin reporting under CSRD in early 2025.

Climate Goals & Targets

Environmental Challenges

• Lower than expected diamond recoveries and quality in Q4 2023 and Q1 2024.
• Softer diamond market in 2023 resulted in lower prices for goods less than 10.8 carats.
• Strained cash flows in Q2 2024 due to payment terms of the HB agreement.

Mitigation Strategies

• Cost reduction initiatives assisted by a strong U.S. dollar.
• Diamond recoveries and quality improved in Q2 2024.
• Drew $25.0 million from the project loan to fund underground development in April 2024.
• Exploring opportunities to sell higher-value Specials through agreements where rough stones are manufactured.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, ESRS

Certifications: Responsible Jewellery Council