JAN JOUBERT CEO of Koidu Holdings

Summit Communications: In late June, Sierra Leone hosted the Conference on Disarmament, Demobilization, Reintegration and Stability in Africa. UN troops are also set to leave by January 2006 - a clear indication of the international community's confidence in your country's return to peace and stability. Your company has invested heavily in this country and obviously sees great potential here. Mr. Joubert, we are keen to understand exactly why your company took that leap of faith and invested here.

Mr. Jan Joubert: To start with, it was the opportunity of developing the Koidu Kimberlite project which attracted us. We had good historical geological information about the site and the ore body showed great potential. We decided to return in 2002, because the country had undergone a massive disarmament process. Secondly, we arrived in the country in June 2002, just after President Kabbah had been voted in with an overwhelming majority which gave us further confidence. Other contributing factors from the security point of view were the presence of the UN troops and the IMATT training program for the Sierra Leonean military. When we first arrived, we studied the security and political environment very carefully and after that we started with a technical analysis of what should be done on the ground. That was the situation from June till November and, as all the indications suggested that the country was moving in the right direction, the decision to invest was made in 2003. We started mobilizing in March 2003 and commissioned the plant in November 2003.

Summit Communications: The production build-up programme for the K1 pipe at Koidu is going very successfully. You recently announced that record production has been achieved for July. Compared to any other mineral resource company in the country, the speed with which you could reach production is extremely high. Mr. Joubert, please share with the readers of The New York Times how you have been able to achieve so much so quickly.

Mr. Jan Joubert: It is a combination of several different factors. The first is the support we receive from all government officers, the Ministry of Mineral Resources, the Ministry of Finance and the Ministry of Labour. We follow the regulations, and do everything in accordance with those regulations. The ministries appreciate this and are also eager to get a success story which is why they support us. Without their support we would not be where we are today. Secondly, and very importantly we have extensive knowledge of the working environment and the sector. Thirdly, our technical capacity. One of our sister companies - a South African firm - is the market leader in producing diamond processing plants. We have the technical capacity and we have the local knowledge of how the structures in Sierra Leone work. Various companies have tried to develop sites in the past and, whilst the potential was there from a geological perspective, the challenge was from the technical and working environment point of view. Our objective was to do everything as quickly and as well as possible and we have transferred that passion from the top of our organization down to all our workers. We managed to establish a culture focused on the need to perform on a daily basis. Every single day, we monitor our performance against a plan and a set of objectives. If we don't meet those objectives, we make the necessary adjustments and analyse the situation setting new objectives if necessary. Our national staff, especially on the management level, are very hungry for a success story in Sierra Leone and they put a lot of effort into their work, and that makes it a lot easier to be successful.

Summit Communications: This good relationship is reflected in one of your latest announcements. We understand that a Special Governmental Panel recently awarded you the exploration rights for the Tongo Fields ahead of thirteen other international companies. Tell us more about this exciting development.

Mr. Jan Joubert: If we look at the historical and geological information, we see that there are very good indications about the size of the diamonds that could be found in Tongo. From the technical point of view, we believe we have the capacity to prove whether it is feasible or not within a very short time. For that reason, we are linking our operations by refurbishing the 60km road between them. Amongst all the international bids ours was the only company that has any interest in linking these two operations and therefore rehabilitating the road between them. If the historical information proves to be correct we will bring another mining operation to Tongo within a short period of time.

Summit Communications: Mr. Joubert, we understand that your company also has plans to invest in the polishing and cutting of diamonds here in Sierra Leone. When and how do you envisage this happening?

Mr. Jan Joubert: Within the group of companies we have cutting and polishing operations in Namibia and India, therefore within the group we have the capacity to establish such a facility, under the condition that it would be feasible and viable, facts to be considered is the economy of skills. i.e. the cheapest place to polish the smallest diamonds is India. If you look at the economics of establishing cutting facilities in Sierra Leone, at the moment it doesn't seem feasible, but it is something that the group may consider in the future.

Summit Communications: In 2004, NGOs and civil society organizations accused Koidu Holdings of direct involvement in environmental damage, lack of transparency in public disclosure, poor working conditions, and poor relations with its host community. At that time His Excellency President Kabbah went to Kono and praised Koidu Holdings for the work it had carried out, urging the people of Kono to cooperate with your company. Mr. Joubert, we are keen to understand your perspective on those events.

Mr. Jan Joubert: Koidu Holdings recognizes the role of green scenery and NGOs in Sierra Leone, however, we have to be honest with each other and recognize that different organizations have different agendas. As far as those allegations are concerned, we must understand that Koidu Holdings is the only show in town and therefore attracts all the attention from all levels. If the NGOs showed the positive side of the things, then their credibility may be put in question. After the allegations, the matter was clarified with the World Bank and other green senior institutions by writing to them, and also through letters from the government and from the company to as many media outlets and NGOs as possible, inviting people to monitor the operations on the ground and see for themselves what the situation was. We invited them to monitor our relationship with the local communities, and the impact of our operations from the environmental point of view and all those allegations just disappeared. Our efforts on the ground are working to the benefit of the community rather than against it.

Summit Communications: Expanding on the point on your relationship with the local communities, Koidu Holdings is committed to investing in the community. Please tell us more about your resettlement program, the Koidu-Tongo Road and the establishment of health facilities for your workers in Kono. Could you please elaborate Mr. Joubert on your corporate social responsibility.

Mr. Jan Joubert: We employ around 400 nationals of whom 80% are from the local community. Now, if you assume that each worker is looking after 10 people as is often the case then our operations impact about 4,000 people directly. Indirectly, we endeavour to include the local community in as many business initiatives as possible. The opportunities that we have created benefit a good number of people.

Secondly, we have a resettlement project for those in close proximity to our operations. We invite those local people involved in the project's management to construct these houses - all the carpentry and masonry, for example, are subcontracted to people from the local community. We also set up an 18-bed health facility in Koidu, specifically for our workforce but it will start helping members of the local community. At the moment 1,200 people are making use of that clinic.

In 2003, we looked at the agricultural sector and how we could get involved there and we identified huge potential in the cacao. Existing plantations in Sierra Leone have the capacity of exporting 24,000 tons of cacao and, if you look at the international prices of cacao, that is a huge amount of money. We are very keen to provide financial and technical assistance to those locals looking to develop that sector. We are also looking into assisting cattle farmers, as we believe that there is a gap in the cattle market. We will focus more on these initiatives once we are in steady state of mining which we foresee to be in January 2006.

Summit Communications: Because of all the negative press surrounding blood diamonds many people around the world still associate the diamond trade in West Africa with smuggling, conflict and war. This is completely out of date. Sierra Leone produces diamond deposits of a consistently high quality with an average run-of-mine carat value that is higher than almost any other diamond producing country in the world. Do you think that Sierra Leone should consider branding its most expensive export?

Mr. Jan Joubert: You have to define blood diamonds. Blood diamonds are diamonds that are produced under no regulation, forced work, diamonds sold through a smuggling network. If you look at Sierra Leone today, diamonds are produced under licences provided by a recognized government and only exported with full Kimberley Process certification. At our mine, representatives of the government, the two shareholders, and our own internal security all monitor production. From the moment that we identify the area that we mine and have blown up and blasted the Kimberlite, it´s a hand-off operation, right up to the glove box where the diamonds are sorted. The diamonds are exported under very strict certification criteria and there is an audit trail running from the extraction of the ore until their evaluation at the Government Gold & Diamond Office (GGDO). The whole operation is documented and our operation is digitally recorded 24 hours a day. We also have a unique evaluation process since we have four evaluators studying our diamonds and monitoring the export process; the two shareholders evaluators, the government evaluator and an independent diamond evaluator that works for the company. Our diamonds are bringing development to Sierra Leone.

From a branding point if view, as diamonds are a depleting resource and there are going to be only so many diamonds from Sierra Leone, then I think it would be a positive move to brand Sierra Leone diamonds, both from the Kimberly process point of view and also from the marketing point of view. It could be something unique in the future to have a diamond from Sierra Leone when there are no more diamonds from the country. The diamonds here are renowned for their beauty and high quality, the reason being that the ratio between industrial and gemstones is 70% gems to 30% industrial. Sierra Leone is also known for large stones, or special stones, and the high proportion of specials coming from Sierra Leone. However, once a diamond is polished it becomes impossible to tell whether it came from Angola, Sierra Leone, or Namibia, and for that reason it would be a positive move to brand those diamonds. Diamonds will become a unique commodity in the future.

Summit Communications: Please tell us more about the audit trail.

The audit trail starts right at the point of extracting the ore from the mine. We run a hard-rock mining operation therefore we drill and blast the kimberlite and basically you end up with fragments of around 300mm x 300mm. From there it goes into a stockpile but before it leaves the pit it is recorded in a log. The area of the blast is surveyed before the blast and once the excavation of the blast material has been completed. Once it enters into the stockpile it is recorded by a grade-control team. These checks and records cover the mining i.e. the route of the mine ore from the point of extraction to the stockpile.

From the stockpile into the plant it is recorded by the grade control team as well as a survey team that surveys the stockpile volume once a week and then deducts it from the previous week's survey - obviously the difference is what has gone to the plant. The grade control team count the number of loads that are fed into the plant. On the front-end loader that feeds the plant we've got a weightometer that records the actual weight that's fed into the plant which is noted by the grade-control team as well as the plant manager. In the plant, itself we've got various measurements. We've got a weightometer on the tailings belt and we've got a density and flow meter on the slimes line. These two measurements added together plus whatever ends up as concentrate/final recovery tailings basically can be audited back to what is fed into the plant by the grade-control team.

In the plant itself, we have two restricted areas. One we call the Blue Security Area and the other the Red Security Area. In order to gain access you have to have security clearance and the only people who have that are those who have been mandated by the Mine Manager and the Chief Security Officer. Access is controlled through a digital system using ID cards and proximity cards. To enter the plant you have to report with your company ID card at the security check-in. They will then issue a proximity card which is programmed into a computer system. With the proximity card access is restricted to those areas where you are mandated to go. Only the Mine Monitoring Officers, the Industrial Security Officers and the Pickers have access to the Red Security Area.

We have three levels of security in the plant - one is the sub-contracted security run by Securicor - a company of international repute. The other is our internal Industrial Security Officers. Both are responsible for recording all their activities. For instance, should there be a blockage on a specific pump then they record the blockage, the time of the blockage, who is involved in resolving the blockage and what shift it takes place. By doing that, if the pump blocks regularly then you can go back and actually put a profile together to see who was involved and if there is an indication that there is always an individual who is involved with either the blockage or resolving the blockage then you can start investigating.

The Mine Monitoring Officers are representatives of the government. We have ten on site with three of them on shift at all times; one on the mining production side and two on the processing side with one in the Blue Security Area and one in the Red Security Area.

The Blue Security Area is where the whole separation process takes place. We've got a pre-treatment section and we've got a dense media separation section. From there, it goes into a Final Recovery Area where the concentrate is sized and is run through two x-ray machines where the recovery of diamonds takes place. From there, it goes into a glove box.

All security areas can only be accessed with three keys. The security officer on duty, the process person on duty and the Mine Monitoring Officer all hold one key and anything recorded is counter-signed by all three in order to establish an audit trail and a level of accountability for every shift.

Entrance into the final recovery complex works once again on a three-key system so that all three people have to be present in order to gain access to any area. When people enter to go and do picking access is recorded digitally in the computer system. After the access door, they enter once again with a three-key system into a search room where they change their clothes for overalls without pockets, gloves and no shoes in order to limit the possibility of hiding things. In the picking facility, everything is monitored by sixteen different cameras in the various glove boxes and in the various facilities. The Mine Monitoring Officer and the Industrial Security Officers monitor the Pickers. The Pickers are from the Philippines, the Industrial Security Officers are expatriates - some from South Africa and some from Israel - and the Mine Monitoring Officer is obviously a Sierra Leonean working for the government. The whole picking process is hands-off. They pick out the diamonds in a glove box, which is basically a glass container, restricted once again by the three key system. They do the picking by separating the waste concentrate from the diamonds. The diamonds then go into a block-lock which can only be opened if it is placed into a slot. The diamonds are placed inside the block-lock within the glove box. Then in order to remove the block-lock you have to turn it, thereby locking it. The diamonds are then passed from one glove box to the next glove box where we do the sizing and weighing. The number of stones, the total carats, the size distribution is recorded on a production sheet verified by all four people (i.e. the Picker, the Industrial Security, the Mine Monitoring Officer and the Chief Industrial Security Officer). Once it is verified all four sign it off and it is placed on record. The Mine Monitoring Officer gets one copy and the other copy remains in the Red Security Area. Once a week, we consolidate the daily productions into a weekly production where we take these records and once again go through the weighing process and verify the diamonds against the reports. We then consolidate all the reports into one report and all the diamonds into one parcel. We go through the whole process again and everything is countersigned and verified. When exiting the Red Security Area you are searched. Digital cameras once again record the search. Then they exit using the three-key system.

About once a month, I inform the Chief Security Officer that we will do an export and I tell him on which date. The day before the export he consolidates all the weekly reports into one report and then prepares an export register. Once again, the process is monitored and signed-off by the Mine Monitoring Officer, the Industrial security Officer and the Picker. Then the diamonds are placed in a sealed container. The seal is placed and recorded on the export register. The diamonds are then placed in a container which is operated by a three-key system. The three keys are held by the Mine Monitoring Officer, the Chief Security Officer as well as the contracted security company we use to do the exports. The sealed container is placed in a sealed envelope and then into a safety deposit box used for export purposes. All three individuals lock this box. Those three keys then go into the safe in Koidu which is operated by a two-key system. The Mine Monitoring Officer holds one and the Industrial Security Officer the other. Then the export takes place and accountability for the parcel transfers from Koidu Holdings to whoever is contracted to do the export. Within the sorting facility, they take ownership of and underwrite the parcel within the safety-deposit box. The parcel is delivered to the Bank of Sierra Leone at the Government Gold and Diamond Office (GGDO). There it is opened once again by all three key holders. Those three keys are left in Freetown. The parcel is taken out and the seals are verified against the export register. GGDO then take the various parcels and weigh them before the valuation process takes place.

The valuation goes through three stages. It is valuated by a valuator from one shareholder, the second from the other shareholder, the third valuation is done by the Government Valuator and the final one by an Independent Valuator. After the valuation process, we look at the various values and determine the fair value based on all four valuations - that is then recorded according to the Kimberley Process at GGDO and the export certificate is prepared by the GGDO. The parcel is weighed again, then closed in accordance with the Kimberley Process regulations and then exported. The final stage in the audit trail is the Kimberley Certificate, Schedule B, Commercial Invoice from the company against the export sheet that was prepared by the Chief Security Officer and all these documents are all recorded meaning that any specific parcel can be audited back to the specific point of production.

Should there be any queries on the process all activities are recorded digitally by the plant's surveillance system. 32 cameras monitor the plant and sixteen cameras monitor the Final Recovery Process. Once every twenty-four hours we archive these on CD. Should there be a query then we can go to the recording and address any allegations. The paper trail is there every step of the way and we've established accountability and responsibility by having the key stakeholders sign-off on every record.

Summit Communications: I am coming towards the end of the interview. We interview leading companies entities and institutions, but we are also very interested in interviewing the personalities. You have a long relationship with the country. Please share with the readers of the New York Times something about your background and how your experiences have influenced your management style and way you carry out your work.

Mr. Jan Joubert: Sierra Leone is a unique country, from the time that you arrive, you get a very positive feeling as the people are friendly and it is a beautiful county. Despite their poverty, people are very positive and the end of the war seems to have breathed new life in them and they are now embracing their opportunities. It is easier to work in this kind of environment rather than an environment where people take everything for granted.

I've been in this country since 1995, and saw it in 2002, and now, almost four years after the war was declared over, it seems like a different world. People are now are a lot more positive. Obviously, there is still a lot to be done in Sierra Leone, in terms of development and education, and in terms of industry and investment to create jobs. Due to my understanding of the culture, the way people think and their needs, I feel a moral obligation to make sure it works. Secondly, I took moral responsibility to secure the finance of this investment, and show the shareholders that there is return on their investment. As a group we want to expand our investment in the country. Realizing the potential is not easy, there are a lot of gaps in the regulatory system, but we believe that we can make a difference, under the condition that it makes sense to our investors and to the nation, and keep all the players happy.

Summit Communications: I'd like to introduce the next question with the words of the great Nelson Mandela. He said and I quote: "After climbing a great hill, one only finds that there are many more hills to climb." You have travelled a long way in a short time. As one of Sierra Leone's key figures, what are your hopes and aspirations for your country in the coming years?

Mr. Jan Joubert: I would like to see the focus changing from diamonds sector to agriculture, fisheries, and construction. I would like to see the infrastructure improve. But that will only happen with the help of foreign direct investment. There is huge potential in many other sectors and there should be effort in marketing these sectors. Sierra Leone is one of those countries where you wake up one morning and feel that you cannot help the situation, and then the next day you wake up feeling that the sky is the limit. The government has to create more incentives for investors as soon as possible. I would like to see a lot more commercial operations coming into production apart from Koidu Holdings.

Summit Communications: I have reached the end of my interview, and I would like to give you the opportunity to send a message to the readers of New York Times; a message of friendship; a message of invitation.

Mr. Jan Joubert: Africa is the future in terms of resources. I have a lot of experience working in many African countries, and my passion is for Sierra Leone. There is a lot of potential here, the question is to see the potential and commit yourself to making things work.