Gem

Talk

Issue 19April 2014

A Rio Tinto Diamonds newsletter

Welcome

GemTalk April 201402

I am pleased to bring you the first issue of GemTalk for 2014. Looking back over the first quarter of 2014, everyone has been working hard to achieve key milestones and create value for the business, over and beyond plan targets. This spirit is reflected in the stories featured in this issue of GemTalk and I want to thank you all for your contribution. I encourage you all to read the article on the recent Diamonds & Minerals Leaders meeting. It was an important few days during which we looked at Rio Tinto’s operating model and at what it means for Diamonds & Minerals and its portfolio of businesses.

In essence Rio Tinto’s operating model is evolving towards a greater focus on what creates value for the business, on clarity of accountabilities and on simplification of our processes. At Rio Tinto Diamonds we have started this journey already last year and it is heartening to see that the whole of Rio Tinto is looking at moving in the same direction. We know that it is not an academic exercise and that this focus, combined with a greater sense of ownership for the business by all, are key ingredients to sustained performance in the business. Over the coming few months you will see more communications on Rio Tinto’s evolution, on the Diamonds & Minerals strategic framework and on how we can leverage this at Rio Tinto Diamonds to further improve our own performance. You will also find in GemTalk some early information on the Chief Executive Diamonds & Minerals Safety & Performance Awards. This new initiative provides us all to with an opportunity to celebrate our team achievements and to share the exciting ideas that are improving safety and business performance in our Product Group. I do believe Rio Tinto Diamonds has a lot to contribute in this regard and I look forward to hearing about our nominations.

Jean-Marc LieberherrManaging directorRio Tinto Diamonds

03GemTalk April 2014

To operate its underground mine safely, Diavik is equipped with one of the world’s most complex and successful radio communications systems.

Known as a ‘leaky feeder’, the system spans more than 40 kilometres of cable, attached to the upper portion of the tunnel (the back), and has over 100 amplifiers. Only a handful of underground mines have a system covering this great a distance (one with 25 amplifiers is considered large-scale).

Leaky feeders, which have been in use for decades in the mining industry, are so named because radio signals ‘leak’ from the antenna cable throughout the mine.

We depend on radio contact to enhance safety and efficiency of production.

We cover all areas of the mine, every ramp and every heading, every level, every drift, and to surface,” said Diavik Underground Mine Technician Ian Downie. “The rules of thumb we follow are best practice and no short cuts.”

Diavik’s investment in this system to date is well over C$700,000 and, as the mine advances, so too will the leaky feeder; the system is progressively deployed to keep ahead of mining development.

With this system, underground mine heavy equipment operators and all personnel underground have a dependable method to communicate.

In terms of production efficiency, equipment operators communicate their location and movement to other operators and to surface, ensuring smooth and safe flow of traffic. This ensures ramps are cleared for haul trucks and means better turnaround times.

The leaky feeder also serves another major function when it comes to mining. At Diavik, blasting occurs twice each day as per central blasting procedures. The blast signal is sent via the leaky feeder to remote initiators, with no blast wires.

To maintain the system, voltage and amperage are monitored at key locations. Diavik technicians can then troubleshoot and with pinpoint precision, locate the trouble spots. Vendor diagnostics provide the ‘big picture’ and can be called up anywhere on the Diavik business network: on surface, underground, or even in Yellowknife.

04 GemTalk April 2014

Diavik wind farm turningdown the diesel

05GemTalk April 2014

On March 31, the TIbbitt to Contwoyto Winter Road closed after another successful season.

The seasonal road opened on schedule on January 30th with 78 centimetres (28 inches) of ice, in line with previous years, and by February 13 had reached a depth of one metre (39 inches) which is enough for a full-load capacity (allowing for maximum gross vehicle weights of 63,500 kilograms).

The ice road is used to transport loads of fuel, explosives and other mining and operations supplies to the mine site. Due to the extremely cold winter and the expert work by the Aboriginal Northern contractor, Nuna Logistics who builds and maintains the road it was a successful season and Diavik was able to transport all its planned loads on time. It was the roads busiest year since 2007.

Stretching 350 kilometres, the Tibbitt to Contwoyto Winter Road is built primarily on frozen lakes with 65 overland portages connecting the lakes. There are three maintenance camps spread along to support the operation.

To help increase its efficiency, the road’s joint venture partners (operators of the North’s three diamond mines) completed a detailed ice engineering study. A two-year pilot study has since been put in place with the Government of the Northwest Territories to issue special permits to allow more weight on conventional super B fuel trucks.

Det’on Cho Scarlet – the Yellowknives Dene First Nation joint venture company that provides security services – added to the road’s safety programs this year with a full-time presence on the Ingraham Trail. This trail includes 70 kilometres of all-weather road from Yellowknife to the start of the ice road, Tibbitt Lake.

Another successful ice road season

Good communication systemis a good investment

Diavik’s award-winning wind farm has got off to a flying start in 2014.

Over the first quarter of the year, the four-turbine, 9.2 megawatt facility has reduced the mine’s diesel fuel usage by 1,388,023 litres and delivered 11.1 per centof its power needs.

What makes the data even more impressive is that this excellent performance has occurred amid average temperatures of minus 25 degrees Celsius, and a recorded coldest temperature of minus 43 degrees Celsius.

These results follow a highly successful performance in 2013 when the wind farm reduced Diavik’s diesel fuel usage by 3.8 million litres (representing more than C$5 million in savings) and generated 15.9 million gigawatts – enough energy to power 29,000 60 watt light bulbs for a year.

At the current rate, Rio Tinto’s C$31 million renewable energy investment in the wind farm is expected to pay for itself in about six years.

Much has also been learnt about the capability of the wind farm since it first came online in September 2012. During its first winter, the turbines were barely operational in December and January due to the extreme climate challenges. The blade heating systems were subsequently adjusted to address frost build-up, lubrication was changed out and the nacelles and bases were retrofitted with heaters to improve their operation.

These changes have been highly successful, with the wind farm achieving an average power penetration of 8.5 per cent in 2013.

On occasion, the winds have been strong enough for the turbines to provide over 50 per cent of the site’s electrical energy needs – enough to power Diavik’s underground mine.

GemTalk April 201406

The Murowa team were excited to celebrate a significant safety milestone in March – 800 days without a lost time injury.

According to Olivia Dzawo Manager of health, safety and environment at Murowa, the high level of safety consciousness of all employees and contractors has led to a spirit at Murowa of being ‘thy brother’s keeper’.

“Employees, contractors and visitors are warned to guard against complacency as mining is a high risk industry and there are always different hazards in the workplace,” she said. “We have a range of initiatives in place to maintain our culture of safety including near-hit reporting, informative health and safety toolbox talks and leader to shop floor and peer to peer interactions, sessions where incident learnings are shared, and peer educator programs.”

To ensure that the safety message keeps cascading throughout the workplace, three personnel were also recently sent on train-the-trainer courses in behaviour-based safety.

Prior to leaving Murowa Diamonds as its operations manager Adriaan Olivier successfully conquered the rugged Namib Desert in the famous FNB Ultra Triathlon.

The triathlon takes place annually in the Namibian town of Swakopmund in Southern Africa. Adriaan and wife Jamie completed the triathlon- a gruelling, yet spectacular combination of events that attracts a small group of elite athletes. The race commences with a 1.9km swim in the Atlantic Ocean followed by a 90km cycle through the Namib Desert dunes. The final leg is a 21km run along the coastal foreshore.

A seasoned swimmer, Adriaan was keen for a new challenge but his main motivation for completing desert triathlon was to support his wife who has recently overcome a fear of swimming. Adriaan’s next challenge will be the Ironman 70.3 in Texas this June.

Murowa’s safety culture stays strong

Adriaan conquers Namib Desert

07GemTalk April 2014

The economic value to be derived from turning the raw material of mining into finished products – mineral beneficiation – is a hot topic of conversation in Zimbabwe as this forms a key part of the government’s economic recovery plan, Zim Asset.

Managing director of Murowa Diamonds, Zebra Kasete, contributed to this important dialogue when he was a guest speaker at a beneficiation conference held in Zimbabwe in February, organised by the Chamber of Mines and Zimbabwe’s Institute of Mining Research.

In discussing how Zimbabwe might value-add to its current diamond mining activities, he summarised Rio Tinto’s diamond operations worldwide and described the specialist skills and costs involved with cutting and polishing different types of rough diamonds.

Zebra also described the factors at play in the success of India’s US$12.8 billion diamond manufacturing industry, illustrating how that country has benefited significantly from diamonds without itself operating any substantial diamond mines. This included discussion of India’s large IT skills base and pool of labour, its steady access to rough diamonds, its access to finance and to advanced technology, and its deep understanding of its end markets.

“Let us acknowledge that

the cutting and polishing

industry is a separate

industry from mining and,

as we endeavour to build

a viable and sustainable

cutting and polishing

industry in Zimbabwe,

it has to be built on

sound business principles

and ethics,” he told the

assembled crowd of mining

representatives, government

officials, trade attaches,

financiers and investors.

Building on Zimbabwe’s diamond wealth Murowa has appointed Masimba Nyamhunga as

the new Manager operations. He replaces Adriaan Olivier who is joining the Diamonds Group Technical Team.

Masimba previously held the position of Assistant manager process and has acted as Manager operations on a number of occasions prior to this permanent appointment and will bring his energy, passion and safety leadership to the new role.

He will be accountable for mining, processing, recovery, site services and the maintenance aspects of the business at the Murowa site as well as for leading growth projects.

Masimba holds a Bachelor of Science degree in Metallurgical Engineering from the University of Zimbabwe and has a Masters in Business Administration from the National University of Science and Technology. He worked in Zimbabwe’s biggest coal operation, Hwange Colliery, prior to joining Rio Tinto.

Masimba steps into operations role

GemTalk April 201408

Diamonds & Minerals Leaders meeting Led by Alan Davies and his executive committee, the Diamonds & Minerals Leaders Meeting took place in March, comprising several days of rich discussions with 65 participants from the businesses that make up Diamonds & Minerals - Rio Tinto Iron and Titanium, Rio Tinto Minerals, Dampier Salt, Simandou and Rio Tinto Diamonds.

The meeting provided an opportunity to share the journey that Rio Tinto has been undertaking and what this means for the Diamond & Minerals product group.

“The Leaders Meeting was considered timely, given the magnitude of change that occurred in 2013 and my strong desire to engage and shape the future of our product group,” said Alan Davies, Chief executive, Diamonds & Minerals.

“The role of the product group is very clear – we are here to maximize the value of the assets within our portfolio. In order to do this Diamonds & Minerals is structured as a streamlined product group at the centre, that sets the tone for how we behave, operate, sell and how we create value.

Within this framework each business unit is accountable for running safe operations and delivering value in line with the strategy”.

The Leaders Meeting acknowledged as critical the core leadership themes of providing clarity, purpose and a sense of belonging for all employees, as well as embracing diversity and developing a culture where every employee is proud to create value for all stakeholders.

The strength of the diversity of the Diamonds & Minerals product group is unique and is not only embodied in our end products (eg diamonds, paint, plastics, paper, salt) but also in the geographic spread of our markets and the multinational nature of our businesses.

This diversity was tangible at the Leaders Meeting with the 65 participants coming from around the globe – UK, France, Belgium, Australia, Canada, China, India, US and Africa.

Safety was a core theme throughout the Leaders Meeting. Mpho Mothoa, Managing director of Richards Bay Minerals spoke of the weight of the tragic loss of life at Richards Bay on Wednesday 6 November, 2013 and the indelible mark that it has left on the organization and the wider community.

Andrew Cole, Chief operating officer, Rio Tinto Iron and Titanium, was in the unfortunate position of being able to compare the recent fatality at Richards Bay Minerals with the fatality at the Argyle mine, some 12 years earlier. The leading indicators provided by safety statistics were similar in both cases and there was an urgent requirement to institutionalize these learnings across the product group. Alan Davies said the call to action for a meaningful engagement on safety values has never been higher.

“Talking safe and living safe are two very different things. Good intentions need to be translated into life saving outcomes,” he said. “I am committed to driving safety education and awareness in the most compelling way, across all Diamonds & Minerals operations, in the many landscapes we operate in around the world.”

09GemTalk April 2014

Diamonds & Mineralssafety and performance awardsIn the spirit of collaboration and acknowledgement of contributions made towards the Diamonds & Minerals strategic objectives, a safety and business performance award will be launched in April.

The Diamonds & Minerals safety and performance awards is an initiative of Alan Davies, Chief executive Diamonds & Minerals to recognise the contribution of each of the business units and to share best practice around the Product Group. It is an opportunity to share new ideas that have improved safety or business performance in our Product Group.

The criteria for the awards is as follows:

Safety: An award for an initiative which creates a safer workplace. This could include the development of an idea, process, tool or new behaviour that improves safety, or customising ones that already exist to make improvements. Business performance: An award for an initiative which creates greater business value. These initiatives should illustrate our people “acting like an owner” resulting in a business benefit. This could include an initiative which reduces in costs, creates a more integrated business, delivers greater revenue or creates more sustainable processes.

All Diamonds & Minerals business units will be invited to submit nominations for initiatives that create a safer workplace, or greater business value from May.

The awards are open to any employee or team of employees in the Diamonds & Minerals product group. Employees can nominate themselves or others. Further information will be available through April, please contact your HR representative for more details and for a nomination form.

GemTalk April 201410

Rough diamonds tender off to a great start

A proud sponsor of JNA awards

Rio Tinto’s first rough diamonds tender for 2014 exceeded all expectations, confirming the market’s steady appetite for Rio Tinto’s diverse diamond productions.

The tender was held in Israel and Antwerp in March, with a total of 124 lots of rough diamonds from the Argyle, Diavik and Murowa mines showcasing an extensive range of colours and sizes of diamonds.

Notable diamonds included a 70 carat white diamond and several purple stones from Diavik; several large dark brown diamonds and a range of pink diamonds from the Argyle mine; and several fancy and intense yellow diamonds from all three mines.

The Diavik white diamond proved the hero of the show, and the coloured diamonds also created a significant buzz in both Tel Aviv and Antwerp.

The tender attracted a record 128 viewers and 44 winners from around the world, representingmanufacturers, traders and fancy coloured diamonds specialists.

Many potential new customers also showed great interest and will be added to the waiting list for the next event.

The Israel viewings were hosted at the Israel Diamond Exchange as part of the inaugural International Rough Diamond Week, held from March 9-13. This new event on the diamond calendar aims to position Israel as an important rough trading centre.

“A considerable team effort was required to put this highly successful event together; congratulations to all those involved” said Patrick Coppens, General Manager, Sales for Rio Tinto Diamonds.

Males shine brightest at this year’s 2014 Academy AwardsRio Tinto’s Diamonds with a Story Collection was on show at this year’s Academy Awards and, interestingly, it was men in cufflinks who this year provided the strongest profile for the stunning gems.

The collection was included in the StyleLab Suite, which offers Academy Award nominees, presenters and stylists the chance to view and borrow one-of-a-kind jewellery from world-renowned jewellers for the Oscars’ red carpet events. Appointments are held with a celebrity stylist in a private Los Angeles venue prior to the big day.

While on stage to accept his Oscar for best sound mixing (for the film Gravity), Chris Munro flashed some Casa GI rough champagne cufflinks from the collection.

And on the famous red carpet outside, E! News correspondent Jesse Giddings lent some extra dazzle to his celebrity interviews with his Casa GI ‘Rock’ collection cufflinks.

The Diamonds with a Story Facebook page shared the Oscars’ news with jewellery aficionados during and after the event.

Rio Tinto Diamonds is once again a headline sponsor of the Jewellery News Asia (JNA) Awards, along with our Chinese partner Chow Tai Fook Jewellery Group Limited.

This is the third year of the JNA Awards, an industry-wide event honouring the innovators and leaders of the international jewellery industry, with a focus on their achievements and contributions in Asia.

There are 16 categories of awards this year, including a new category that spotlights the ASEAN region. They recognise achievement and innovation in diamond manufacturing and retail, as well as in business and brand management, employment practices and sustainability. There are also awards for the young entrepreneur of the year, overall achievement and lifetime contribution.

The competition is judged by a respected international panel of judges representing key sectors of the jewellery industry. Entries for the competition are open until April 17, with the final awards to be presented at a gala dinner in Hong Kong during the September Hong Kong Jewellery and Gem Fair.

“Since its inception, we believed the JNA Awards would become the most important event of its kind and in 2013 this was reflected in the increased diversity of entries,” said the manager of RTD’s Greater China Representative Office, Rita Maltez. “We are delighted to see the expansion of the award categories and the addition of new honoured partners in 2014, which is further testament to the importance of this platform.”

New managerfor US officeRio Tinto Diamonds has appointed Brandee J Dallow to run its New York representative office, a role that ensures Rio Tinto can continue to support its customers and have a voice in what is the world’s largest retail diamond jewellery market.

Brandee brings 15+ years of experience in the US jewellery market to this role. Prior to joining Rio Tinto in March, Brandee was Vice President of Global Communications for the Julius Klein Group, a leading international diamond manufacturer. “This appointment demonstrates our continuing commitment to the US,” said Bruno Sane, General manager of marketing for Rio Tinto Diamonds.

“Brandee will be invaluable in driving a competitive advantage for our Select Diamantaires and Rio Tinto Diamonds in this important market. She has an in-depth understanding of the US diamond industry as well as exceptional marketing and communication skills.”

Brandee said she was delighted to be joining the Rio Tinto Diamonds team, particularly at a time when many Select Diamantaires were actively developing their diamond jewellery businesses in the US market.

“Over the last seven years, Rio Tinto Diamonds has established a significant presence in the US and I am looking forward to playing an integral role in the next stage of its development,” she said.

11GemTalk April 2014

GemTalk April 201412

A public hearing to discuss the environmental aspects of the Bunder project was held in February, representing another major milestone in the mine’s approval process.

The hearing, an Indian government sponsored event, provided an opportunity for all interested stakeholders – community members, employees, media representatives, non-government organisations and political groups – to respond to Rio Tinto’s Environmental Impact Assessment Study.

The public hearing, held in the village of Kasera, was filmed and open to attendees for questioning. The minutes of the meeting were produced as a record of the issues raised and the follow-up required. These minutes have now been signed off by Rio Tinto and the Government of Madhya Pradesh and are with the central Indian government for review.

Rio Tinto has asked the Indian government for 954 hectares of land to develop a medium-sized open pit operation in the Chhatarpur district of Madhya Pradesh. There are no villages or human habitat on the 954 hectares of land and this area comprises 0.005% of the total forest area of Chhatarpur.

“We have been on the ground for a decade now, working methodically through the various requirements to develop the Bunder diamond project, whilst being respectful to the traditions, to the community aspirations and to the environment,” explained Chief operating officer of Rio Tinto Diamonds in India, Tarun Malkani.

Community consultation has been central to this, and the public hearing was another important forum for understanding any issues or concerns that need to be catered for in the final blueprint of the mine.

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A new film, titled Courageous Sprit, has been made to showcase our developing Bunder diamond project located in the geographical and cultural heart of India.

Since the discovery of the Bunder diamond resource in 2004, Rio Tinto has been on the ground in the Chhatarpur district of Madhya Pradesh, working with communities to understand their needs and to be a catalyst for change. This film speaks to these activities and how the Bunder project is going about setting a new benchmark for mine development in India. GemTalk April 2014

The Bunder project has recently appointed Sandeep Thenua to the position of Director, strategic commercial and technical planning.

In this role Sandeep will oversee the commercial and technical aspects of the Bunder project as it moves into the next phase of development. Sandeep’s experience and skills will be invaluable to the Bunder project and to Rio Tinto Diamonds’ broader strategy and business development activities.

Most recently, Sandeep was the Business Evaluation Department (BED) executive responsible for the review of Copper group’s Investment Committee (IC) proposals. Prior to this Sandeep has held a variety of commercial and technical roles within the iron ore product group including Iron Ore expansion projects, the Simandou project and the Iron Ore Company of Canada.

New Bunder appointment

Saving vultures might seem an unlikely undertaking for a mining operation, but that is just what Rio Tinto India is aiming to do as part of its new partnership with the Bombay Natural History Society.

The Indian vulture population has been in serious decline in India in recent years, threatening the balance not only of the ecosystem but the economy and public health.

“The negative impact cannot be underestimated,” explains Dr Nik Senapati, Managing director of Rio Tinto India.

“Vultures are a critical part of the food chain. By removing rotten meat and bones they maintain a balanced ecosystem and prevent the unnecessary spread of disease. The dramatic decline in the Indian vulture population is directly linked to animal husbandry practices, namely the use of the painkiller Diclofenac to treat cattle. This painkiller poisons the vultures when they eat the carcasses of cattle”.

In under a decade, vulture numbers in India have decreased by up to 99% – the fastest decline of any bird ever reported.

Rio Tinto India has signed a Memorandum of Agreement with the Bombay Natural History Society to support a number of wildlife management initiatives over a five-year period, including the vulture rescue project. It is the first partnership of its kind in the mining industry.

Madhya Pradesh, home to the developing Bunder project, has a thriving population of birdlife and is a natural habitat for vultures. Together with Birdlife International and the Bombay Natural History Society, a 100-kilometre vulture ‘safety zone’ will be established in Madhya Pradesh to help protect the remaining wild vultures in the area. In the longer term, it is hoped that vultures from captive breeding centres can be reintroduced into the wild and the vulture populations will return to being self-supporting.

Creating a safe haven for vultures

Bunder’s courageous spirit showcased on film

Environmental issues get a hearing at Bunder

15GemTalk April 2014GemTalk April 201414

The Argyle Diamonds Reward for Effort Student Awards initiative was recently presented to two students from the Kununurra District High School, encompassing students from years 1 to 12.

The award is intended to recognise East Kimberley students who have demonstrated improvement in the areas of academia, behaviour and school attendance.

Students Chloe Crockett (Grade 10) and Eli McChesney (Grade 2) were the first students to receive their award, which was presented by Liz Vale, Senior Communities Relations Advisor.

Argyle rewards students

Crusher number two progressing well Crusher2The construction and installation of the second crusher at the Argyle underground mine is making excellent progress on all fronts.

Known as Crusher 2, the project is a great example of collaborative effort across many functions including the process maintenance, electrical teams fixed plant crews and production and mining teams.

Whilst the jargon is unfamiliar with words like “hydro sets, apron feeders and tipples” what is very obvious to all is the dedication and focus in place to ensure a July 2014 commissioning.

“All project frontline crews are tracking well and on schedule. The teams have remained focused despite the holiday period. This is a highly commendable team effort across all departments and we would like to thank everyone that has helped us to date,“ said Richard Bancilhon, project manager of the underground project.

Fast facts about the Argyle Crusher 2 (CR2)

It will operate 24 hours a day, 365 days a year

The entire structure is being built underground

1,130 cubic metres of concrete used to date for construction

134 tonnes of steel reinforcement used to date for construction

Over 10 kilometres of electrical cable installed to date

It has the capacity to crush rocks the size of a small car

Will be powered by a combination of hydro and diesel power

Sylvia ChapmanSylvia.chapman@riotinto.com

Katja Van Der Hallen katja.van.der.hallen@riotinto.com

Rio Tinto Diamonds NVDiamond Exchange BuildingHoveniersstraat 532018 Antwerpen, BelgiumTelephone: (32 3) 303 6800Facsimile: (32 3) 303 6900Website: www.riotintodiamonds.com www.selectdiamantaire.comEmail: rtd.info@riotinto.com rtd.enquiries@riotinto.com

We welcome your feedback!We are keen for ideas about how we can improve the newsletter and welcome your contribution of photos and stories of interest for future issues. Please contact Sylvia or Katja with your comments and suggestions.

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Issue 19April 2014

A Rio Tinto Diamonds newsletter