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Operating & Financial Review 2010

The De Beers Family of Companies

De Beers was established in 1888 and is the world’sleading diamond company with unrivalled expertisein the exploration, mining and marketing of diamonds. From its mining operations across Botswana, Namibia, South Africa and Canada, De Beers produces andmarkets approximately 35% of the world’s supply of rough diamonds.

At De Beers, we have committed to live up to diamonds by making a lasting contribution to the communities in which we live and work. This means driving returns on capital, operating sustainably and working with our partner governments and communities to transform natural resources into shared national wealth.

Anglo American plc

45%Central Holdings Group

40%

DB Investments (Lux)

100%De Beers Diamond Jewellers

50%

Element Six1

100%De Beers sa (Lux)

Government of the Republic of Botswana

15%

Debswana Diamond Company

50%Namdeb Diamond Corporation

50%

DTC Botswana

50%

De Beers Consolidated Mines

74%

Namibia DTC

50%

De Beers Canada

100%

DTC2

De Beers UK

100%

Forevermark

100%

De Beers Group Services (RSA)

100%

DTC South Africa2

Diamdel

100%

This report relates to the performance of De Beers sa and is designed to be read alongside our Report to Society 2010, to be released later this year. These reports form part of our annual reporting cycle and together cover the financial and sustainability performance of the De Beers Family of Companies. Both reports adhere to Global Reporting Initiative Sustainability Reporting Guidelines and form part of our Communication on Progress to the United Nations Global Compact.

De Beers sa and shareholders 1 Non-abrasives – 100%, abrasives – 59.78% Owned and controlled subsidiaries and divisions 2 Marked entities are divisions rather than subsidiaries Joint ventures and independently managed subsidiaries

Operating&FinancialReview2010 DeBeers 03

In this Operating & Financial Review

How De Beers operates

From our mining operations across Botswana, Namibia, South Africa and Canada, De Beers produces and markets approximately 35% of the world’s rough diamond supply.See page 04

Chairman’s introduction

Improving market conditions, our restructuring programme, and capturing maximum value from every carat we produce underwrote our increased profitability in 2010. See page 06

2010 Review

De Beers led the diamond recovery in 2010, with strong demand and price growth. See page 08

Rough diamond sales

Find out more about the rough diamond market in 2010 and our sales through the DTC and Diamdel. See page 20

Diamond demand

Read about our downstream value-creating businesses: Forevermark, De Beers Diamond Jewellers and Element Six. See page 22

Financial highlights

Our full 2010 financial results including our consolidated income statement, consolidated balance sheet, summary of cash flows and production statistics. See page 25

Governance and risk

Find out more about our governance systems, including the appointment of directors, the composition and structure of our boards, and our risk management processes. See page 29

Sustainability

Find out more about our commitment to live up to diamonds by working in a responsible and sustainable manner. See page 31

Contact us

Contact details for De Beers’ offices around the world.See page 35

Performance overview

The diamond recovery was primarily grounded in steadily increasing prices for rough diamonds driven by improved demand from our Sightholders, and a consistent focus on costs across our operations. See page 11

Mining review

Find out more about the performance of our mining operations in Botswana, Namibia, South Africa and Canada in 2010. See page 16

Exploration

In 2010, our exploration team focused on programmes in Angola, India, Botswana, South Africa and Canada. See page 14

De Beers at a glance

De Beers was established in 1888 and is the world’s leading diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds.

Canada

1.75mCarats recovered 2010

Key

This map is an approximate guide to the location of De Beers exploration, mining, rough diamond sales and downstream value-creating businesses.

USA

11 De Beers Diamond Jewellers stores in the US in locations including Fifth Avenue in New York and Rodeo Drive in Beverly Hills

04 De Beers Operating&FinancialReview2010

USA

Mexico and the Caribbean

Canada

Exploration

$

Mining Rough diamond sales

$

Diamond demand

Botswana


South Africa


Namibia


UK & Ireland

US$5.08bnTotal DTC sales 2010

India

6,317km2 Land holdings 2010

Angola

6,042km2

Land holdings 2010

Operating&FinancialReview2010 De Beers 05

UK & Ireland

Europe

Angola

Namibia Botswana

South Africa

Russia, Middle East & Asia

$

$

$

$$

$

06 DeBeers Operating&FinancialReview2010

Introduction from the Chairman

In last year’s Operating and Financial Review, I invoked the adage “never waste a good crisis”. As we look back on 2010 there can be no doubt that the actions we took in 2008 and 2009 have stood us in good stead. Our focus in 2009 on producing in line with demand from our Sightholders, managing our debt and reducing our cost base crystallised in 2010 into a renewed focus on maximising the value of diamonds. This in turn yielded very positive results for 2010.

De Beers achieved total sales in 2010 of US$5.88 billion (2009: US$3.84 billion) and an EBITDA of US$1.43 billion, an improvement of some 118% on 2009 (US$654 million). Our prudent cash management and cost focus have yielded a highly cash-generative business, generating US$943 million in free cash flow in 2010- a significant improvement over both 2009 (US$35 million) and 2008 (US$258 million).

These figures are particularly pleasing given that 2010 was not an easy year. Structural debt issues continued to bedevil already jittery markets across the globe and raise as yet unanswered questions about the sustainability and strength of the global economic recovery. Economic growth rates, while positive, were subdued in 2010 and are likely to remain so for some time to come in established diamond markets as governments seek to manage their fiscal deficits.

Nevertheless for the industry as a whole there was a great deal to be positive about in 2010 and it is now far better positioned to deal with economic uncertainty than was the case two or three years ago. Levels of debt in cutting and polishing centres have been brought down to more manageable levels and diamantaires have succeeded in rebalancing their inventories. As a result, rough diamond prices have rebounded and surpassed pre-crisis highs with strong demand growth in China and India.

Maximising the value of diamonds While improving market conditions enabled De Beers to enjoy increased sales in 2010, it was the effectiveness of our restructuring programme and our focus on capturing maximum value from every carat we produced that underwrote our increased profitability.

At a basic level our focus on maximising value has involved keeping our on-mine and off-mine costs down, avoiding wastage and driving price. However, our success as a business is also defined by our ability to empower our producer partners and our local communities to translate the economic value of diamonds into social, environmental and economic capital. This means that we also measure value by reference to the extent to which diamonds are able to drive national social and economic development in our partner communities.

Our ability to find viable diamond deposits, mine those deposits safely and for the long-term, create a sustainable route to market for the goods we mine, and drive consumer demand for our diamonds, drives our bottom line and the development of the communities in which we live and work. As a result it has been pleasing to see the extent to which our producer partners returned to positive growth in 2010.

It is this philosophy of maximising the life and value of diamonds that has underwritten our support for Debswana’s Jwaneng Cut-8 project- which will see US$3 billion of investment over the next 15 years. This will enable Jwaneng to maintain current production levels well beyond 2015, secure approximately 100 million carats, and extend its life of mine to at least 2025. This philosophy will also define how we engage with a number of challenges we anticipate in the forthcoming year. Namdeb’s land operations, for example, are approaching the end of their natural lifespan under the current operating model, and we are exploring potential new operating models

Our focus in 2009 was aligning production with demand, managing debt, and reducing costs. In 2010, we reviewed our focus on maximising the value of our diamond resources. This yielded positive results.

Nicky OppenheimerChairman, De Beers


Financial highlights

with our partners in Namibia to potentially extend the life of this and other resources so that they continue to create value for future generations of Namibians.

Our ability to maximise the value of rough diamonds through production is also contingent on our success in maintaining demand. To the extent that ethical concerns can impact on consumer demand for diamonds, these remain an important element of “diamond equity”. Questions were asked about the ethical integrity of diamonds over the course of 2010 as the Kimberley Process struggled to achieve consensus on how to handle the difficult issue of diamond exports from Zimbabwe. While this issue remains fluid, it is clear to me that the Kimberley Process will need to adapt in the future if it is to continue to provide the industry and consumers with the same level of assurance that it has in the past. The industry as a whole will have an important role to play in ensuring that the Kimberley Process remains fit for purpose and responsive to changing expectations. In the meantime the De Beers Family of Companies remains focussed on ensuring that the values under which we operate, and that are encapsulated in our commitment to live up to diamonds, continue to reinforce consumer confidence in the integrity of our product.

De Beers LeadershipHaving steered De Beers successfully through one of the most challenging periods in our history, Gareth Penny stepped down as CEO of De Beers in 2010. The excellent results we are reporting for 2010 are a fitting tribute to his contribution to De Beers.

The search for a new CEO for De Beers is underway and will be concluded shortly. The new CEO will face many challenges but will find a company that has adapted well to changing times, and is well-positioned for future growth.

OutlookIf the last few years have proven the folly of trying to predict the future, they have also shown the wisdom of preparing for the unexpected. To this extent, we remain positive about the fundamentals of the diamond business as growing demand around the world outpaces declining supply in the long term. Our focus over the next year will remain on ensuring that our business remains fit to succeed in uncertain times. We will continue to work to maximise the value of diamonds we produce, ensure the robustness of our partnerships and drive demand growth in both established and emerging markets.

Nicky Oppenheimer Chairman De Beers

Total sales (US$bn)

2009

3,840

2010

5,877

53%increase

Operating costs (US$m)

2009

402

2010

416

US$416m2009: US$402m

EBITDA (US$m)

2009

654

2010

1,428

118%increase

Free cash flow (US$m)

200935

2010

943

US$943m2009: US$35m


De Beers led the diamond recovery in 2010, with strong demand and price growth for rough diamonds reflected in a robust recovery in both sales and profitability. This was supported by an unwavering focus on embedding the lower cost base of 2009, maintaining production in line with Sightholder demand, and investing in superior mining assets.

Operating Environment2010 brought an end to two consecutive years of market decline for diamonds. The first half of the year saw a strong recovery in demand for rough diamonds from DTC Sightholders against the low comparisons of the first half of 2009. This continued through the second half with increased demand from retail markets, particularly India and China which showed remarkable rates of growth with polished wholesale prices of 31% and 25%, respectively (in local currencies). Further confidence was driven by a strong US Christmas sales season, up by approximately 7% from the previous year.

Leading the Diamond RecoveryThe steps taken in 2009 in response to the global recession positioned De Beers to lead the diamond recovery in 2010. Having embedded the production and operating costs savings from 2009, the company was able to benefit fully from steadily increasing prices for rough diamonds. Strong price recovery was driven by improved demand from Sightholders as global economic growth, especially in emerging economies, saw an increase in consumer demand for diamond jewellery. De Beers continued to produce in line with demand from Sightholders, and looked to secure future supply through capital investments in superior mining assets, commencing the Cut-8 extension to Jwaneng mine, and investing in potential future capital projects at Venetia mine in South Africa and Gahcho Kué in Canada.

Gahcho Kué exploration site

Mining operations at Venetia

The Peace in Africa mining vessel being towed into harbour

2010 review Key performance indicators Full year

Tonnes Treated(000s)

2009

35,109

2010

54,544

50%increase

Exploration expenditure (US$m)

2009

44.8

2010

43.3

US$43.3m2009: US$44.8m

Carats recovered (000s)

2009

24,600

2010

32,997

34%increase

LTIFR*

2009

0.21

2010

0.24

0.242009: 0.21

* Lost time injury frequency rate

09 De Beers Operating&FinancialReview2010

Leading the Diamond Recovery

1. Exceptional profit growth

EBITDA grew to US$1.43 billion in 2010, an increase of 118% over 2009 (US$654 million). This exceptional growth was driven by a 53% increase in total sales by the De Beers Group for the full year compared with 2009, at US$5.88 billion. Sales of rough diamonds by the DTC were US$5.08 billion (2009: US$3.23 billion). By the end of 2010, DTC rough diamond prices, on average, equalled June 2008 pre-recession highs. While costs necessarily rose commensurate with increased production throughout 2010, a focus on maintaining the low cost base achieved during 2009 resulted in these higher margins.

Tonnes treated and tonnes mined increased by 50% and 59% respectively, comparing favourably to a 42% increase in production costs. This cost containment was partly offset by strong Canadian and southern African currencies.

In March 2010, after a US$1 billion pro rata equity investment from shareholders by way of a rights offer, De Beers successfully refinanced all of its international and South African debt. The tenor of all debt facilities was extended to August 2013. At the end of 2010, net debt amounted to US$1.76 billion compared with US$3.20 billion at the end of 2009, excluding amounts due by De Beers to its shareholders. The restructuring actions undertaken during 2009 have now yielded an improved debt position and a lower overall cost-base, with De Beers achieving normalisation two years ahead of schedule.

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

US

$ M

illio

n

TotalSales

EBITDA

Pric

e in

dex

Jan 2009

Jan 2010

Jan 2011

EBITDA as a proportion of total sales 2008-2010 (US$m)


2. Strong price recovery

2010 saw a 27% average increase in rough diamond prices, to levels surpassing pre-recession highs of 2008. The exceptional price growth was driven by retailer restocking and strong global demand growth, particularly in China and India.

Leading the Diamond Recovery continued

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

US

$ M

illio

n

TotalSales

EBITDA

Pric

e in

dex

Jan 2009

Jan 2010

Jan 2011

DTC rough diamond price index (set at Dec 31 2008)


In 2010 the Cut-8 extension commenced at Debswana’s Jwaneng mine, the world’s flagship diamond mine. With a capital investment of US$500 million, and an estimated total project investment of US$3 billion to 2015, Cut-8 represents the largest single investment in Botswana.

Cut-8 will extend the life of Jwaneng to at least 2025, and is expected to create more than 1,000 jobs at the peak of the project. The extension will provide access to a further 100 million carats of mainly high quality diamonds, which could be worth in excess of US$15 billion over the life of the mine.

The scale of the extension is vast, requiring the removal of around 700 million tonnes of waste material, with the open pit almost doubling in depth from 330 metres to 650 metres. To achieve this, the rate of annual waste removal at Jwaneng will triple to approximately 120 million tonnes per annum.

By 2017, approximately 91 million tonnes of ore will be available for processing, and the mine will be able to maintain a minimum flow of 10 million tonnes of ore a year through its treatment plant.

3. Investing in capital projects

Leading the Diamond Recovery continued

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

US

$ M

illio

n

TotalSales

EBITDA

Pric

e in

dex

Jan 2009

Jan 2010

Jan 2011

Cross-section and aerial view of Jwaneng mine in Botswana illustrating the scale of ‘Cut-8’. A US$500m capital investment, this latest extension will turn the world’s richest diamond mine into a ‘super-pit’.


Performance overview

The diamond recovery was primarily grounded in steadily increasing prices for rough diamonds driven by improved demand from our Sightholders, and a consistent focus on costs across our operations.

Bruce Cleaver and Stuart BrownJoint acting CEOs

In 2009 De Beers used the global economic crisis as an opportunity to change the dynamics of our business so that we were well-positioned for growth when the market began to recover. Production slowed, costs were radically reduced, and we had to say goodbye to valued colleagues. We noted at the time that we were necessarily “taking short term pain for long term gain”.

With the close of 2010, and now more than a year removed from the recession, we can report with some confidence that De Beers’ period of “long term gain” has begun. 2010 was an exceptional year for the business and a clear endorsement of the hard work put in by the men and women of the De Beers Family of Companies, not only this year, but over the past several years.

Safety PerformanceAs production has ramped up at our operations in southern Africa and Canada, the safety of our people remains our single most important priority. It is therefore with regret and sadness that we report that Debswana experienced a fatality late in the year. De Beers LTIFR fell to 0.24 in 2010 from 0.21 in 2009. De Beers will not compromise when it comes to safety and this incident is simply unacceptable. We will continue to be vigilant in building a zero-harm culture, and are working with all levels of the business to ensure that a safety-first culture permeates all aspects of our working lives – including operational decision-making, employee performance management and bonus programmes.

Leading the Diamond RecoveryWhile a high degree of global uncertainty remains and the industry is yet to regain pre-recessionary highs in terms of production or sales, the return of confidence to most parts of the diamond pipeline in 2010 led to a strong recovery in the price of rough diamonds. Restocking picked up throughout the year and consumer demand rebounded, with extraordinary growth of consumer demand in China and India and a

better than expected retail performance during the US Christmas buying period.

In order to capitalise on this demand growth, De Beers implemented Five Strategic Levers at the beginning of 2010 focused on driving growth and maximising the value and life of diamonds.

1. Sustainably maximise price for our rough diamonds

An exceptionally strong recovery in the price of rough diamonds saw DTC rough diamond prices increase by an average of 27% in 2010, compared with 2009. As a result, sales of rough diamonds by the DTC totalled US$5.08 billion for the full year 2010 (including those through joint ventures), a 57% increase compared with 2009. DTC rough diamond prices had, on average, equalled the pre-recession levels of 2008 by the end of 2010.

2. Find, optimise and invest in mines that generate superior returns

De Beers’ production from its wholly-owned and joint venture operations in Botswana, South Africa, Namibia and Canada increased over the year to meet increasing DTC Sightholder demand. Approximately 33 million carats were recovered by De Beers in 2010 compared with approximately 24.6 million carats in 2009. In Botswana, Debswana commenced the Cut-8 extension project at Jwaneng mine. Cut-8 represents the largest ever single investment in Botswana. The project will extend the life of mine to at least 2025, and is expected to yield 100 million carats worth approximately US$15 billion over the life of mine.

3. Invest in value-creating downstream opportunities

De Beers continued to expand its proprietary diamond brand, Forevermark, throughout Asia, with the brand now available in 348 stores globally. This represents a 40% increase on the beginning of 2009. Forevermark will continue to expand in the rapidly growing China market in the year


ahead and has recently launched in India. Forevermark has commenced an exploratory phase in the US in 2010 that yielded positive early consumer research and will continue to assess US market opportunities during 2011.

4. Embed cost and capital efficienciesAll operations within the Family of Companies focused on making the savings achieved during 2009 a permanent part of our operating culture in 2010. Prudent cash management and a continuing focus on costs carried the new cost base through to 2010, contributing to improved margins. Additionally, Debswana began an operational review charged with identifying efficiency improvement opportunities to be delivered over the next three years.

De Beers successfully refinanced all of its international and South African debt in March 2010 on satisfactory terms, after a strong show of support from our three shareholders who invested US$1 billion in the business. The tenor of all debt facilities was extended to August 2013. Net debt, excluding shareholder loans, had fallen to US$1.76 billion at the end of 2010, compared with US$3.20 billion at the end of 2009.

5. Protect Diamond Equity De Beers continued to support the Kimberley Process as we have done since its inception. Throughout 2010, exports from Zimbabwe’s Marange region dominated coverage of the Kimberley Process and put the initiative under strain. The DTC offered guidance to its Sightholders on the identification of potentially illegal and unethical exports from the Marange region. While De Beers has no mining interests in Zimbabwe, it supports the ongoing dialogue between the Government of Zimbabwe and the Kimberley Process Chair. We hope that, through the continued reforms being made, the people of Zimbabwe will be the ultimate beneficiaries.

On the empowerment front, De Beers continued to support beneficiation initiatives and increased producer country participation in the diamond pipeline. The 2010 De Beers’ Shining Light Awards – focused on promoting young, undiscovered designers in southern Africa – was the largest to date, comprising 30 pieces of diamond jewellery from Botswana, Namibia and South Africa.

ManagementThere were several management changes in the Family of Companies throughout 2010. We thank David Noko, who stepped down as MD of DBCM, for his years of service. With the appointment of Barend Petersen as Executive Chairman of DBCM and Phillip Barton as CEO of DBCM, new leadership is now in place to take the business through the next phase of its transformational journey. This new leadership team has already concluded the sale of Finsch Mine (announced January 2011) and continues to progress the Venetia Underground Project.

At the end of 2010, it was announced that Jim Gowans, formerly Chief Operating and Technical Officer of De Beers Group and President and CEO of De Beers Canada, would take over the leadership of Debswana. We wish former MD Blackie Marole well in all his future endeavours and know that Jim will bring his world-class mining pedigree to Debswana’s world-class mining assets.

Lastly, De Beers CEO Gareth Penny stepped down in September. We have both been privileged to serve in his stead in an interim capacity and thank the shareholders, the Chairman, and our teams for all the support they have shown us during this transition.

OutlookWhile the world is not yet back to where it was before the economic crisis began, and significant risks to growth remain, 2010 was a fantastic year for De Beers. The difficult steps taken in 2009 saw the company move rapidly from stabilisation to strident recovery. Looking forward, we remain cautiously

confident about the diamond market in 2011 and expect to continue to produce positive growth, albeit at a slower rate than 2010.

Growth in consumer demand for diamond jewellery is expected to remain positive in 2011, underpinned by global economic growth and strong retail confidence. After the better than expected Christmas buying period, the US diamond jewellery market is expected to continue recovery. We also anticipate the exceptional growth seen in China and India over the last year will continue. Keeping step with steadily increasing demand from our Sightholders to meet this retail demand, total production for the De Beers Family of Companies is expected to reach 38 million carats in 2011.

In the longer term, the supply/demand dynamics of diamonds remain attractive. Diamonds are a finite resource and no major new diamond mines have come on line in over a decade, with none expected in the near future. At the same time, western consumer markets are recovering and demand growth in the emerging markets of China and India is expanding rapidly. In the long-term, demand is likely to significantly outpace flat to decreasing diamond supply for many years to come. After an exceptional year, De Beers remains well positioned to lead the industry beyond the diamond recovery.

Stuart Brown Bruce Cleaver Joint acting CEO Joint acting CEO De Beers De Beers


Exploration review

Charles SkinnerHead of Group Exploration

IntroductionIn 2010, De Beers Exploration spent US$43.3 million (2009: US$44.8 million) on work programmes focused in Angola, Canada, India, Botswana and South Africa, supported by laboratory and technical services centralised in South Africa. Deposit assessment work programmes were completed on five kimberlites in advanced stage projects in Angola (three) and Canada (two) and a further 22 kimberlite discoveries were added to the company’s impressive portfolio of 195 kimberlites.

Exploration also provided support to the operating mines and other business units. This included services for the Debswana and Namdeb exploration programmes and the resource programme on the Victor satellite pipes for De Beers Canada, and diamond laboratory services to the resource extension programmes for the Jwaneng and Orapa Mines.

AngolaIn 2010, a further eight kimberlites were added to the Angolan portfolio bringing the total number to 158 discoveries in the past five years. Exploration activities continued on the following two concessions of 3,000km2 each.

The Lunda NE concession has yielded the most prospective portfolio at both the early and advanced stages of exploration, with 114 kimberlite discoveries. In 2010, the work programme focused on the deposit assessment phase, which was successfully completed on the Mulepe-1 deposit of three adjacent pipes with a combined size of around 20 hectares. One hundred carats of diamonds were recovered from these pipes for revenue determination purposes, and Mulepe-1 has now moved into the desktop phase, which should be completed in Q2, 2011. Thereafter, if the project meets the criteria of the Investment Committee, further drilling and engineering studies will be done over the next two years to determine the economic feasibility of this resource.

In the Dando-Kwanza concession, none of the 44 kimberlites discovered in the past four years have met threshold economic viability, and the ground will be relinquished in 2011.

CanadaExploration activity focused on supporting De Beers Canada in completing the deposit assessment drilling of two satellite pipes in the Victor cluster to determine whether they could contribute to the reserves of the Victor Mine. A summer core drilling programme, and a winter bulk sampling programme were completed on the Delta and Tango Extension pipes, respectively. A desktop study review is underway to determine whether either have the economic viability to proceed into the resource phase.

Botswana and South AfricaIn Botswana and South Africa, a specialist team continued with technical reviews of the historical databases, which contain more than 50 years of prospecting data, to effectively target new discovery areas. In the Orapa East area in Botswana, geophysical surveys were conducted and drilling of selected targets continues. The exploration team continued to provide services to Debswana in the Orapa Mine Lease area, where one kimberlite was discovered.

IndiaExploration focused on early stage reconnaissance and targeting in India. A total of 12 kimberlites were added to the portfolio, the largest of which is 22 hectares. In line with the strategy to focus on the most prospective, high priority target areas, ground was rapidly turned over and the portfolio reduced to 6,000km2

Environment, Community, Occupational Health and Safety The safety of employees, contractors and the communities in which we operate is the top priority for De Beers Exploration. In December 2010, Exploration achieved over a million hours without a lost time injury. The LTIFR for 2010 was 0.15, which is a significant

Our focus is on exploration projects that will give profitable carat production in three to five years, while building a strong pipeline of projects to provide long-term value.

Performance indicators10 09 09/10

LTIFR* 0.15 0.89 –0.74LTISR** 0.15 8.16 –8.01Exploration expenditure 43.3 44.8 -1.5

* Lost time injury frequency rate ** Lost time injury severity rate

Constructing a drill rig in South Africa to take ground samples for analysis

1

Canada

2 Angola

3Botswana

4

South Africa

5

India


improvement from the 2009 LTIFR of 0.89. The LTISR also decreased significantly from a rating of 8.16 in 2009 to 0.15 in 2010, as only one day was lost in the year. The Angola operation completed the year with no lost time injuries, which is noteworthy considering the high volume of drilling activities carried out.

Malaria is an endemic disease in Angola. To proactively protect the health of its employees, Exploration implemented a malaria 5-point plan in September 2009. Since implementation, there has been an 88% reduction in malaria cases in expatriates (seven cases in 2010 compared with 40 cases in 2009), and an 80% reduction in the number of local employees contracting malaria (35 cases in 2010 compared with 93 cases in 2009).

The India operation, South African based field operations, laboratory services, technical services and business support functions, retained their ISO14001 certification. OHSAS18001 health and safety certification was achieved for the India operation, Group Exploration Macrodiamond Laboratory, the Kimberley Microdiamond Laboratory (KMDL) and the Indicator Mineral Laboratory. Anglo American undertook a safety risk assessment of the KMDL and the team was commended for its leadership in safety.

Outlook for 2011 During 2010, sustainable long-term strategic and business plans were finalised and implemented for each venture and for support services. These plans are focused on adding kimberlites to the early stage portfolio and delivering advanced projects.

Angola represents one of our most exciting prospects given its past 90-years of diamond mining, the high prospectivity of the underlying craton, the fact that in the past 50-years it has never been systematically explored by any exploration companies.

In Angola, De Beers has developed the critical in-house differentiating skills and capabilities required in the fields of drilling, DMS plant treatment and diamond recovery. This has facilitated the rapid turnaround of results and decisions, and the move into advanced projects. The focus for Exploration will be on the work programme to deliver the Mulepe-1 cluster to an Inferred Resource by mid-2012. A further 12 priority kimberlites in the Lunda NE concession with sizes from 10 to 50 hectares will be the focus of deposit test work programmes.

In Canada, the work programme on the Victor kimberlite cluster should reach conclusion and define which of the pipes

warrants further drill sampling, based on size. The focus of exploration in Canada will move to re-establishing an early stage portfolio of prospective greenfield target areas in which new discoveries can be made.

In Botswana, South Africa and India, the work will continue to focus on defining high priority target areas, through technical reviews of the databases and the execution of work programmes to establish discovery portfolios.

Ground holdingskm2

10km2

09

+/–

1 Canada 605 670 -9.7%2 Angola 6,042 6,042 0%3 Botswana 2,172 3,383 -35.8%4 South Africa 330 995 -66.8%5 India 6,317 7,833 -19.4%


Mining review

Debswana

Operating highlightsDebswana benefited from a significant improvement in rough diamond sales during 2010 relative to 2009. This was driven by improved demand for rough diamonds and a strong recovery of rough diamond prices over the course of the year. Debswana produced 22.2 million carats in 2010, 4.5 million more than the 17.7 million carats produced in 2009, and diamond revenue increased by 49%.

In 2010, Debswana commenced the Cut-8 extension project at Jwaneng Mine. The project represents the largest ever investment in Botswana and is expected to extend the life of this mine to at least 2025. Cut-8 is expected to create more than 1,000 jobs and yield 100 million carats over the life of the mine. The project will strengthen the local economy and transform Jwaneng Mine into one of the world’s few super-pit mines.

Even with improved market conditions in 2010, management continued to run the operations with caution. The general principles established in 2009 – ensuring flexibility around production, cost containment, cash preservation, capital rationing, retention of core skills and maximisation of shareholder distributions whilst maintaining adequate liquidity in the business – were followed through in 2010.

Having steered the company through the global economic crisis, MD Blackie Marole retired from Debswana on December 31st, 2010. Jim Gowans, formerly the Chief Operating and Technical Officer of the De Beers Group, was appointed MD for a three year period in December and assumed his role on January 1st, 2011.

ECOHS OverviewDebswana’s safety performance for 2010 deteriorated from the high level of performance in 2009. There were a total of 19 lost time injuries, including, regrettably, one fatality. This occurred at the end of the year at the Orapa Power Plant project site. The Lost Time Injury Frequency Rate (LTIFR) for the year was 0.19 against a target of 0.11.

Orapa, Letlhakane and Jwaneng mines maintained their ISO 14001 and OHSAS 18001 certification during the year.

Debswana successfully launched the ‘My Campaign’ HIV/AIDS strategy, the objective of which is to ensure employees appreciate and benefit from the company’s Disease Management Programme and other HIV/AIDS service offerings.

Outlook for 2011Debswana management will continue to exercise caution and prudence in 2011 and focus on maximising the value and life of its diamonds as well as driving a culture of excellence through the organisation.

Continuity of power supply remains a key challenge in the year ahead with Botswana’s largest external supplier, Eskom, expected to reduce supply by a further 100Mw, leaving Botswana with only 150Mw. Debswana has engaged in a number of initiatives to help curb business interruption due to power blackouts. There is a plan to commission the Orapa 90Mw dual fuel power station by the first quarter of 2011. The expansion of Morupule Coal Mine is also earmarked to mitigate against the constrained demand-supply imbalance for electricity in the country.

Jim GowansMD, Debswana

50/50 joint venture with the Government of the Republic of BotswanaEstablished 1968

Production start

Mining (open pit)1 Damtshaa 20022 Jwaneng 19823 Letlhakane 19754 Orapa 1971


LTIFR* 0.19 0.09 0.10LTISR** 2.91 5.91 –3.00Mining licence area (ha)*** 41,276 48,787 –15%Tonnes treated (000s) 24,439 17,845 37%Carats recovered (000s) 22,218 17,734 25%

* Lost time injury frequency rate ** Lost time injury severity rate *** Hectares

2010 production statistics (000s)

Tonnes treated

Carats recovered

1 Damtshaa N/A N/A2 Jwaneng 8,204 11,4703 Letlhakane 3,307 1,2214 Orapa 12,928 9,528

3

Damtshaa

Jwaneng

Letlhakane

Orapa1 4

2


NamdebECOHS OverviewNamdeb suffered two lost time injuries in 2010 compared to five in 2009. The company’s LTIFR decreased from 0.27 to 0.09. There were no fatalities in 2010, and by the end of the year, Namdeb had recorded eight million fatality-free shifts. Vehicle accidents in 2010 increased from five in 2009, to eight in 2010.

Namdeb continues to invest in the creation of a safe working environment for employees, and has achieved more than 80% of the rollout of the Anglo American Safety Risk Management System during 2010. In addition, programmes such as the alcohol and drug abuse policy and fatigue management plan have proven highly successful.

Namdeb remains ISO 14001 certified and was successfully audited against OHSAS during 2010. The legacy rehabilitation project was also restarted in 2010, and 17 of 29 major scrap yards have been cleaned and signed off. In addition, infrastructure removal has started and two old plants have so far been demolished. The community social investment strategy was refocused in 2010, with the establishment and consolidation of the Namdeb Foundation.

Outlook for 2011The strength of the Namibian Dollar relative to the United States Dollar remains an ongoing challenge for the business as it enters 2011. However, Namdeb has a robust business plan for 2011, with highlights including the closure of the Bogenfels Pocket Beach operation and the reopening of the Elizabeth Bay operation.

Following on from the successful mining trial in 2010 by the Peace in Africa mining vessel, work is ongoing to explore a longer-term arrangement for the vessel to continue mining in Namibian waters.

In addition, the successful onshore exploration programme will continue, and the exciting Sendelingsdrift project is promising. A strong focus on overhead costs reduction will be maintained, as the Namdeb Services Transformation Project nears completion in the first quarter of 2011.

Find out more www.debeersgroup.com www.grnnet.gov.na www.namdeb.com www.ohsas.org www.iso.org

Inge Zaamwani-KamwiMD, Namdeb

Production start

Mining (open pit)1 Alluvial contractors –2 Elizabeth Bay 19903 Mining Area 1 19364 Orange River 19895 Atlantic 1 1990


LTIFR* 0.08 0.27 –0.19LTISR** 2.37 6.62 –4.25Mining licence area (ha)*** 1,578,908 1,578,908 0%Tonnes treated (000s) 9,434 3,477 171%Carats recovered (000s) 1,471 929 58%



Tonnes treated

Carats recovered

1 Alluvial contractors N/A 172 Elizabeth Bay 804 2503 Mining Area 1 4,829 1684 Orange River 3,801 575 Atlantic 1 N/A 980

3

1

4

2

5

Operating highlightsFollowing a challenging year in 2009, Namdeb posted a strong financial performance during 2010. Revenue increased due to the strong recovery of the diamond market supported by an increase in average stone size, primarily achieved through mining mix, as a result of mine scheduling. The positive effects of the cost saving measures implemented during 2009 carried forward into 2010, and further enhanced Namdeb’s financial performance for the year.

In 2010, Namdeb produced 1.47m carats, compared to 0.94m carats in 2009. This included 0.98m carats from sea-based operations and 0.49m carats from land-based operations. The increase in production is mainly due to the return to continuous activity, following the production hiatus necessary in 2009. During 2010, the mining vessel Peace in Africa conducted a successful trial mining campaign in Namdeb’s sea areas and contributed to the increase in the carats produced.

Also in 2010, Project 2050 was launched, which aims to secure the future of Namdeb’s land-based mining operations well into the future.

50/50 joint venture with the Government of the Republic of NamibiaEstablished 1994

Alluvial contractors

Elizabeth Bay

Atlantic 1

Mining Area 1

Orange River


Mining review continued

De Beers Consolidated Mines

Operating highlightsDe Beers Consolidated Mines completed 2010 in a markedly better position than it began the year. DBCM recovered a total of 7.5 million carats from 17.1 million tonnes treated in 2010. This represents an increase from 2009, when 4.8 million carats were recovered from 11.3 million tonnes treated. All the operations achieved their carat production targets despite a slow start at the beginning of the year, with final total production figures 3% above target.

The DBCM business plan aims to ensure a sustainable future that delivers returns for the shareholders and meets national, financial and operational commitments. The business sustainability programme has delivered on the cash flow target, with employee-driven initiatives to reduce the cost of production; process improvements and improved profitability becoming accepted as the norm. The investment in embedding a continuous business improvement philosophy contributed significantly to these achievements.

To sustain efficiency, tough decisions had to be made, which included restructuring the Finsch mining operation and head office operations.

The Namaqualand Mines suspended production in March and the mines continue with the environmental rehabilitation programme. Both Finsch and Namaqualand Mines attracted interest from prospective buyers and were offered for sale during 2010 to consortia with sound business track records, experience in mining such deposits and notable empowerment and community credentials.

In early 2010, the Peace in Africa vessel moved from mining in the South African Sea Areas (SASA) to Namibian waters on a trial basis, mining for De Beers Marine Namibia. The step stemmed the losses in SASA for DBCM and has contributed significantly to Namibia’s marine based production.

At Venetia and Voorspoed mines, initiatives were introduced aimed at optimising the mine design; to reduce waste and realise greater value by implementing the ‘continuous business improvement’ programme more effectively. Both Venetia and Voorspoed exceeded their waste stripping targets within the set budget, which improved the overall cost per tonne mined, in alignment with objectives for future productivity.

Finsch started 2010 with a slow build-up in production following the major cut backs in 2009, and ended the year well ahead of target. Kimberley Mine is mining tailings dumps which are an inferred resource. Work is currently underway to further reduce the cost of production, which will in future enhance the profitability of this operation.

ECOHS OverviewThe company suffered no fatalities in 2010, with LTIFR falling to 0.25 (from 0.29 in 2009). Safety remains our number one priority as a company. All DBCM operations successfully retained their OHSAS 18001 certification, and the rollout of the Safety Risk Management Process progressed well, with training extended to contractors on site. All mining operations are ISO14001 certified. In Community management, the success of the Zimele enterprise development project piloted in Kimberley in 2010 prompted the expansion of the scheme to Voorspoed towards the end of the year.

Outlook for 2011Together with shareholders, the company set ambitious targets and DBCM has exceeded its own expectations. It will provide improved returns for its shareholders as a result of the actions taken by the business. The challenge going forward for DBCM is to ensure future growth. The Venetia Underground Development Project will make a vital contribution to the future of DBCM.

The successes of 2010 were achieved through diamond people pulling together and we will continue to focus on ensuring that our employees are engaged and skilled to produce excellent results.

Phillip BartonCEO, DBCM

74/26 (BEE partner Ponahalo Holdings)Established 1888

Production start

Mining (open pit)1 Venetia 19922 Voorspoed 20083 Namaqualand 1928Mining (underground)4 Finsch 1961Mining (tailings resource treatment)5 Kimberley 1980Mining (marine)6 SASA 2007


LTIFR* 0.29 0.25 0.04LTISR** 7.52 5.15 2.37Mining licence area (ha)*** 1,007,676 986,560 2%%Tonnes treated (000s) 17,069 11,321 51%Carats recovered (000s) 7,556 4,797 58%* Lost time injury frequency rate ** Lost time injury severity rate *** Hectares


Tonnes treated

Carats recovered

1 Venetia 4,036 4,2872 Voorspoed 3,016 7323 Namaqualand 41 974 Finsch 4,483 1,5835 Kimberley 5,493 8236 South African

Sea Areas (SASA) 199 33

Venetia

Namaqualand

SASA

Voorspoed

KimberleyFinsch 5

1

4

3

6

2


De Beers Canada

Operating highlights2010 saw a number of notable achievements for De Beers Canada. Victor Mine received the Desjardins Business Excellence Large Business Award for industry best practice, and Snap Lake Mine received the John T. Ryan Western Regional Safety Award. In addition, the first Victor Mine diamonds were available for sale in Canada at the Birks flagship store in Toronto, in accordance with the commitment to provide 10% of Victor goods by value to local manufacturers. This event signalled the completion of the diamond pipeline in Ontario.Diamond production during the period was 1.75 million carats; made up of 925,000 carats from Snap Lake; and 826,000 carats from Victor. 2010 production at the Snap Lake Mine was less than originally forecasted, mainly due to higher than anticipated dilution and complexity in the kimberlite dyke. In August, a preliminary high level review of the operation identified the need to reassess the way forward for Snap Lake.The focus of the Exploration team in Canada has been on value growth, concentrating on developing new resources at Victor Mine by assisting in geological modelling, diamond breakage studies, grade control studies and discovering new ore bodies.The Environmental Impact Statement for the proposed Gahcho Kué Mine was submitted to the Mackenzie Valley Environmental Impact Review Board in December 2010. The Gahcho Kué Project is a joint venture project of De Beers Canada Inc. (51%) and Mountain Province Diamonds Inc. (49%), and will be the second diamond mine in the Northwest Territories for De Beers if permitted and if approved. De Beers Canada Inc. is the operator of the Project.

ECOHS OverviewDe Beers Canada’s LTIFR rose to 0.82 (2010) from 0.18 (2009). This year, 32 people were injured and could not resume their normal duties on the day following the injury. A review of Safety, Health and Environmental performance led to the development of a strategy focused on enabling personal accountability in all employees, and the establishment of a number of management processes to instil a zero-harm approach to safety. These included a no-fault reporting culture that has resulted in a high level of hazard and Near Hit reporting by the Victor Mine and Exploration teams, and a “CEO’s SHE Award” to recognise employees who contribute to a culture of excellence and demonstrate proactive initiative.

SHE management also undertook two safety benchmarking reviews in 2010, first with Rio Tinto to identify best practices and differentiators that contributed to the company being recognized in 2009 as “Best in the US” for their safety performance, and second using the Anglo American Safety Risk Management Process Journey Model. Areas of improvement identified in both reviews were incorporated into operational SHE Improvement Plans. This included the introduction of the use of leading indicators aimed at establishing proactive, activity-based objectives e.g. closure of corrective actions, reporting Near Hit incidents, review of High Potential Incidents, and Visible Felt Leadership.

Both Snap Lake and Victor are certified to the ISO14001 standard. At both mines safety management systems are in place aligned to OHSAS 18001, with occupational health components of employee engagement and training outstanding before the first stage of certification can be completed.

In 2010 De Beers Canada continued working toward the Mining Association of Canada’s ‘Toward Sustainable Mining’ standard, including protocols for Crisis Management, External Outreach, Energy/GHG Emissions Management, and Tailings Management. In the Community discipline, the implementation of seven Impact Benefit Agreements with First Nations communities continued, four for Snap Lake and three for Victor mine. Outlook for 2011In 2011, our focus will be to optimise safe carat production at our mines, aligned with global demand, and to find efficiencies in all our operations. We will continue to advance our exploration projects, including the permitting of Gahcho Kué, and extend our current resources. As always, we strive for continuous improvement in all aspects of safety, health and environmental performance.

Chantal LavoieActing CEO and COO, De Beers Canada

100% ownedEstablished 1998

Production start

Mining (underground)1 Snap Lake 2007Mining (open pit)2 Victor 2008

Performance indicators10 09 +/–

LTIFR* 0.88 0.18 –0.70LTISR** 19.77 18 1.77Mining licence area (ha)*** 7,236 7,236 0%Tonnes treated (000s) 3,602 2,466 46%Carats recovered (000s) 1,751 1,140 54%



Tonnes treated

Carats recovered

1 Snap Lake 869 9262 Victor 2,733 826

Victor

Snap Lake

2

1


Rough diamond sales

Varda ShineCEO, DTC

Operating highlightsIn 2010 the Diamond Trading Company (DTC) focused on increasing its rough diamond sales in line with Sightholder demand as the diamond industry continued to recover from the global economic downturn. The increased business agility introduced by the DTC during the downturn was instrumental during 2010 as the speed of the recovery was uncertain; effective supply chain planning and flexibility were therefore of paramount importance.

The DTC closed the year with excellent sales of US$5.08 billion (versus US$3.24 billion in 2009) as a result of increasing consumer demand for diamond jewellery (with demand particularly strong from emerging markets in the East such as India and China), retail restocking, and retail expansion in China.

DTC Botswana (DTCB), Namibia DTC (NDTC) and DTC South Africa (DTC SA) all saw significantly increased sales levels over 2009 as well as recovery in the number of jobs in the domestic diamond cutting and polishing industries. In spite of this however, the lingering effects of the economic downturn unfortunately led to the formal closure of operations of one Sightholder in Canada’s Northwest Territories, one Sightholder in Namibia and two Sightholders in South Africa during the year.

The main operational highlight for the DTC was the significant growth in global sales (+57% over 2009 sales). Of the US$5.08 billion global sales, US$482 million was sold through DTCB, US$225 million through NDTC and US$470m through DTC SA (including sales to South Africa’s State Diamond Trader (SDT)).

In the fourth quarter of 2010, the DTC again partnered with several Sightholder and retail companies to run a marketing programme in the US in the lead up to the all-important end of year holiday selling season. The ‘Everlon Diamond Love Knot’ campaign again proved successful in supporting consumer demand for diamond jewellery in the US, which remains the world’s largest diamond jewellery retail market.

One significant operational challenge faced by the DTC network in 2010 was the decision by the Botswana Diamond Sorters & Valuators’ Union (BDSVU) to undertake industrial action at DTCB. Strike action, which lasted for two weeks, took place following a wage dispute but resolution was achieved through a process of arbitration in November 2010. The DTC network mitigated the impact of the lost man hours during the strike and continued to meet Sightholder demand throughout the period in question.

ECOHS OverviewIn 2010 the DTC incurred only one Loss Time Injury (LTI), which occurred at the DTC Research Centre in Maidenhead.

Outlook for 2011The focus for the DTC in 2011 will be on preparing for the start of a new Sightholder contract period in April 2012 while continuing to supply Sightholders in line with demand. The DTC will continue to consult with Sightholders regarding the Supplier of Choice application process before inviting applications from interested parties and running the selection process during the second half of the year.

Diamond Trading Company

US$5.08bn2010 sales (2009: US$3.24bn)

Inside the DTCB building in Botswana

Extraordinary effort and flexibility from DTC staff in 2010 saw impressive delivery on commercial goals and helped to meet the objectives of our producing country partner governments.


Neil VenturaCEO, Diamdel

Diamdel, a wholly-owned De Beers business, is focused on auctioning rough diamonds. Originally established in Antwerp in 1964, Diamdel is located in the world’s leading diamond centres with additional sales offices in Tel Aviv and Hong Kong, and a corporate presence in London. It is through these offices that Diamdel engages with more than 600 highly diverse registered businesses as it seeks to maximise their access to rough diamond supplies at market determined prices.

Operating highlightsDiamdel posted a very strong financial performance in 2010, delivering record EBITDA and Free Cash Flow to shareholders. The business witnessed exceptionally high levels of demand in Q1 2010 for nearly all categories of rough diamonds, which was sustained through the rest of the year. The majority of 2010 sales were e-auction sales.

Diamdel remains committed to providing as many opportunities as possible to its customers to source the rough diamonds they need. The number of participants, winners and repeat winners in 2010 demonstrates considerable success in meeting that commitment. In 2010, Diamdel held 97 auctions at which 1,250 diamond parcels were made available, and high levels of participation were witnessed throughout the year. Of the 621 Diamdel registered businesses, the auctions attracted bids from 280 companies, from which 157 different winners emerged. Since launch in January 2008, Diamdel’s online auction platform has attracted bids from 357 companies, with 221 different winners. Repeat participation at auctions was higher in 2010 than in both 2008 and 2009.

Belgium-based businesses continued to account for the majority of auction sales, but 2010 saw solid growth in sales made to Israel, India and Asia Pacific based businesses.

Development of Diamdel’s auctioning capability continued throughout 2010. This included a project to relocate the company’s Israel business to larger premises to provide greater viewing capacity. This will create improved opportunities to buy for businesses registered with Diamdel in Tel Aviv from January 2011. In October 2010, a pilot commenced to provide wider rough diamonds market access to Diamdel auctions with DTC Sightholders eligible to participate for the first time. Two cycles of auction events were concluded before the end of 2010, involving both Sightholder and non-Sightholder businesses. At these events there were 54 non-Sightholder and 33 Sightholder winners.

In July 2010, Diamdel was selected as a country representative for Belgium in the prestigious European Business Awards programme in recognition of its innovative and successful business model.

Outlook for 2011The recovery in the diamond market during 2010 was stronger than anticipated, but economic conditions remain uncertain. Demand growth is expected to continue, albeit not at the pace seen in 2010.

The focus for Diamdel in 2011 will be to continue to improve both access to, and the content of, our auction buying proposition to registered businesses around the world. This includes providing additional access to further qualifying businesses from April 2011 onwards.

Diamdel

600Number of clients worldwide

The integration of Sightholders bidding in 2010 introduced greater dynamism into De Beers’ sales arrangements, and has enabled us to expose our rough diamonds to wider demand from globally dispersed buyers.

Rough diamonds from South Africa


Diamond demand

Francois DelageCEO, De Beers Diamond Jewellers

De Beers Diamond Jewellers (DBDJ) is an independently managed retail joint venture with Moet Hennessy Louis Vuitton (LVMH). Globally, the DBDJ network is comprised of 40 stores.

Operating highlightsAt the end of November 2010, the company had opened two new stores in Kyoto Daimaru (Japan) and Marina Bay Sands (Singapore, franchise partnership), and closed Regents Galleria (Taiwan) and Kyoto Takashimaya (Japan). The upgrade of the network also included the refurbishment of Printemps (France) and White City (UK). The first full year of Hong Kong operation after its buy-back in late 2009 has been successful and exceeded expectations. The store network is now spread across the US (11), Europe (8), Middle East (4), East Asia (7) and Japan (10).

After a difficult year of trading in 2009, DBDJ sales showed strong growth, with an acceleration during the second half. Following the strong success of the “Enchanted Lotus” collection launched at the end of 2009, DBDJ has continued to enlarge the product offering and bring attractive

new styles, consistent with the new brand DNA, in the various segments (bridal, classics, collections). Among other launches, Aura, Clea, Atea and Adonis have shown a promising start. In the High End segment, the launch of Arpeggia and Swan Lake has also reinforced DBDJ’s presence. This segment has continued to see a steady trend and demonstrated the potential of the brand.

DBDJ has developed a new brand identity and advertising campaign, now in press. The visibility and desirability of the brand also improved, which resulted in stronger editorials and support from press.

Outlook for 2011With ambitious targets, 2011 will continue to build on the strong fundamentals of 2010. DBDJ plans to selectively open new territories either directly or through partnerships (Bahrain, Kazakhstan). DBDJ will complete the brand identity roll out through various means, including web, packaging and visual merchandising. The Bridal/High End will continue to be a strong element of the strategy. Actions to maximise cash and returns from DBDJ’s existing network and assets will remain an ongoing focus, along with a close attention to inventory and overall working capital levels.

De Beers Diamond Jewellers

40Stores worldwide

Swan Lake advertising poster

A year of turnaround saw strong top line growth, supported by the introduction of a new brand identity and appealing new products, which led DBDJ to take market share.


Cyrus JillaCEO, Element Six

Element Six (E6) is an industrial diamond supermaterials business, supplying tool and application manufacturers across a diverse range of global markets. These include oil and gas, mining, construction, automotive, aerospace, defence, electronics, semiconductor and general engineering.

Operating highlights2010 has been a successful year for E6 despite initial uncertainty after substantial market declines in 2009. E6 is focused on delivering against its Strategic Vision developed in 2009. Whilst 2009 was a year for swift restructuring and strategic planning, 2010 has been focused on reorganisation, profit improvements and enhancing core capabilities (including innovation, productivity, customer service and quality). A new organisational structure was implemented ensuring end to end accountability for profits within divisions. There has also been investment in capability building across the Group to secure long-term future innovation, profitability, and growth.

The year saw demand recover faster than expected. This has been particularly notable within the oil and gas industry, partially driven by customer restocking. In addition, new pricing strategies, productivity improvements and market share gains contributed to strong profit improvement in the Advanced Materials and Hard Materials Divisions, reducing reliance on Oil and Gas.

ECOHS overviewAgainst a significant rise in production activity in 2010, E6’s Group LTIFR slightly increased to 0.27 for the year from 0.22 in 2009, but remained significantly reduced from 0.44 in 2008. Any increase in LTIFR is considered unacceptable and E6 continues a drive by its leadership team toward embedding a behavioural based safety culture across the entire Group with a target for zero harm. Progress has been made in reporting incidents, raising constant awareness and implementation of incident severity measures reviewed regularly at an executive level. In the first half of 2010, the Group experienced no LTIs demonstrating that zero harm is achievable.

E6 had no major environmental issues reported in 2010 and all operations are ISO 14000 certified.

Outlook for 2011Moving into 2011, the focus for E6 is especially on profitable market share gain and improved innovation delivery. E6 plans to realise the benefits of capability improvements, delivering differentiated customer service and quality, and lay the foundations for strong productivity gains in 2012.

Element Six 2010 was a strong year for E6 with demand recovery and underlying profitability improvements through restructuring, reorganisation and stronger commercial management.

Optical grade chemical vapour deposition polycrystalline diamond window for use in high power lasers

A Forevermark brand zone in-store


Stephen LussierCEO, Forevermark

Forevermark is a proprietary diamond brand from the De Beers group of companies and serves as the group’s primary consumer marketing arm. Each Forevermark diamond is inscribed with the Forevermark icon and a unique identification number using patented advanced technology, demonstrating that it has met the brand’s high standards of quality and integrity.

Operating highlightsForevermark aims to be the world’s leading diamond brand by partnering with carefully selected jewellers and diamantaires to excite and reassure consumers about the origin and quality of their diamonds. Through these unique partnerships, Forevermark is looking to maintain the image of the diamond dream and inspire today’s and future generations of consumers with diamonds they will be proud to buy and wear forever.

Over the course of 2010, Forevermark established itself in its launch markets of China, Hong Kong and Japan and expanded into India, Singapore, Mexico and the Caribbean. The number of doors from which Forevermark is available grew by 40% to 348 authorised Forevermark Jewellers.

The Antwerp inscription and grading facility saw a 74% increase in diamonds processed compared to 2009. 2010 also saw Forevermark reach over US$200 million of retail sales in the two years since launch.

As a result of continued integrated marketing support, the Forevermark brand is now widely recognised across key Asian markets.

Recent research indicates that approximately one in three of Forevermark’s target consumers is aware of the brand across China and Hong Kong, suggesting that the brand’s marketing support is proving effective at driving interest and brand comprehension.

Further research also indicates that consumers are increasingly motivated by the brand’s quality and trust assurances as well as the unique inscription, which is compellingly brought to life in-store.

Outlook for 2011Moving into 2011, Forevermark’s main strategic goal will be to further expand the brand in existing markets by increasing door numbers and retailer partnerships. This will include growth into the retail arena in India. In addition, further exploration and planning of expansion into new markets, namely the US.

Forevermark

348Stores worldwide

We have seen both consumers and our partner retailers and diamantaires embrace the brand’s values of quality and integrity – key values in this new era of ‘considered luxury’ and ethical consumerism.


Financial statements

Consolidated income statement

Consolidated balance sheet

For the year ended 31 December (abridged)

31 December 2010

US$m

31 December 2009

US$m

Total sales (Note 1) 5,877 3,840

Less: cost of sales 4,983 3,513

Gross profit 894 327

Less: operating costs (Note 2) 416 402

Operating profit (loss) 478 (75)

Add:

Trade investment income 517 298

Foreign exchange gains 44 95

Profit before finance charges and taxation 1,039 318

Less: net interest charges (Note 3) 176 225

Profit before taxation 863 93

Less: taxation 225 125

Profit (loss) after taxation 638 (32)

Less: interests of outside shareholder in subsidiaries 34 (1)

Own earnings (loss) 604 (31)

Add: share of retained (loss) income of joint ventures (6) (6)

Net earnings (loss) before once-off items 598 (37)

Once-off items (Note 4) (52) (706)

Net earnings 546 (743)

Underlying earnings (loss) (Note 5) 598 (220)

EBITDA 1,428 654


31 December 2010

US$m

31 December 2009

US$m

Share capital and reserves 3,279 1,943

Interests of outside shareholders 144 229

Total shareholders’ equity 3,423 2,172

Shareholders’ loans 790 759

Other net interest bearing debt* 1,762 3,200

Other non-current liabilities 972 805

6,947 6,936

Fixed assets 2,908 2,795

Other non-current assets and investments 3,012 3,023

Net current assets 1,027 1,118

6,947 6,936

*Other net interest bearing debt includes short-term borrowings and is net of cash.


Financial statements continued

Summary of cash flows


31 December 2010

US$m

31 December 2009

US$m

Cash available from operating activities 1,160 226

Less: investing activities

Fixed assets – stay-in-business 204 150

– expansion 31

Investments 13 10

217 191

Free cash flow 943 35

Less: financing activities

Ordinary dividends (including payments to outside shareholders) 6 105

Cash flow 937 (70)

Add (Deduct):

Shareholder equity subscription / advances 1,000 553

Redemption of preference shares (107)

Non cash movements in debt and movements attributed to charges in exchange rates (392) (131)

Decrease in other net interest bearing debt 1,438 352


Notes

Other information

31 December 2010

US$m

31 December

2009 US$m

1. Total sales of natural rough diamonds (including joint ventures) 5,082 3,233

2. Operating costs include:

– Exploration, research and development 96 93

– Sorting, selling and marketing 133 131

– Group technical services and corporate overheads 187 178

416 402

3. Net interest charges include preference dividends amounting to: 11 11

4. Once-off items comprise:

Costs in respect of a class action settlement agreement 1

Costs in respect of restructuring of debt 28 25

Impairment in respect of Canadian mining assets 696

Net costs in respect of restructuring 24 (16)

52 706

5. Underlying (loss) earnings* is calculated as follows:

Net earnings (loss) before once-off items 598 (37)

Adjusted for special items and re-measurements:

Asset disposals (net) (2) 6

Re-measurement gains on financial instruments (net) 2 (189)

Underlying (loss) earnings 598 (220)

*Underlying (loss) earnings comprise net earnings attributable to shareholders adjusted for the effect of any once-off or special items and re-measurements, less any tax and minority interests. Special items include closure costs, exceptional legal provisions and profits and losses on the disposal of or impairments of assets. Special items which are considered to be significant relative to the results are categorised as being once-off. Re-measurements are recorded in underlying earnings in the same period as the underlying transaction against which these instruments provide an economic, but not formally designated, hedge.

31 December 2010

US$m

31 December 2009

US$m

Exchange rates

US$/ZAR average 7.37 8.25

US$/ZAR period end 6.63 7.43

US$/C$ average 1.03 1.15

US$/C$ period end 1.01 1.06


Financial statements continued

Production statistics Actual

31 December 2010

Tonnes ’000

31 December 2009

Tonnes ’000

Total tonnes treated 54,544 35,109

DBCM 17,069 11,321

- Kimberley mines & contractors 5,493 2,696

- Finsch 4,483 3,249

- Namaqualand mines & contractors 41 138

- Venetia 4,036 2,836

- Voorspoed 3,016 2,402

- SASA (m² 000) 199 1,923

Namdeb 17,156 7,298

Land 9,434 3,477

Sea (m² 000) 7,722 3,821

Debswana 24,439 17,845

Orapa 12,927 8,817

Letlhakane 3,307 2,362

Damtshaa – 60

Jwaneng 8,204 6,606

De Beers Canada 3,602 2,466

Snap Lake 869 354

Victor 2,733 2,112

31 December 2010

Carats ’000

31 December 2009

Carats ’000

Carats recovered 32,997 24,600

DBCM 7,556 4,797

– Kimberley mines & contractors 823 397

– Finsch 1,583 1,426

– Namaqualand mines & contractors 97 71

– Venetia 4,287 2,204

– Voorspoed 732 532

– SASA 33 167

Namdeb 1,472 929

Land 492 329

Sea 980 600

Debswana 22,218 17,734

Orapa 9,528 7,574

Letlhakane 1,221 1,066

Damtshaa - 54

Jwaneng 11,470 9,039

De Beers Canada 1,751 1,140

Snap Lake 926 444

Victor 826 697


Governance and risk

De Beers (the Company) was formally incorporated in Luxembourg in November 2000. It is the holding companyof what is regarded as the De Beers Group.

These are lodged with the Registre du Commerce and other authorities in Luxembourg as well as being sent to each of the shareholders directly. These accounts are submitted to the Annual General Meeting of shareholders of the Company held in March each year.

Appointment of Board MembersThe Articles of Incorporation relate to the legal establishment and registration of De Beers as a joint stock corporation in Luxembourg. As the legal constitutional instrument, it allows for a minimum of three and a maximum of 20 directors.

The shareholders and CMSL are directly responsible for the appointment and removal of directors in accordance with the provisions of the Shareholders’ Agreement and Management Contract. This ensures that the shareholders they represent have a clear voice in Board meetings and decisions.

The Management Contract was also concluded on 30 January 2002: CMSL has been appointed to assist in the appointment of directors, senior executives and management. It also assists in the strategic development of the De Beers Family of Companies. CMSL is a company within the Central Holdings group (representing the Oppenheimer family).

Composition and independenceAs of 31 December 2010, the De Beers Board consisted of 14 directors, reducing to 13 on 1 January 2011. During 2010, resignations from the board were received from Robin Mills, Sir Chips Keswick, Anthony Oppenheimer, Gareth Penny and Gabaake Gabaake, while Boikobo Paya joined the Board. Jim Gowans also joined the board in March 2010, to be withdrawn on 1 January 2011 on taking up the position of Managing Director of Debswana Diamond Company (Proprietary) Limited with effect from the same date.

The Company is managed and controlled from its head office in Luxembourg where the Board meets to attend to the business of the Group. Its commercial activities are carried out by a number of subsidiaries, investments and joint ventures which it finances in different parts of the world.

Together, these subsidiaries and investments in joint ventures constitute the Family of Companies.

Taxes and royalties to governments are paid by each of the different subsidiaries and investments in a manner consistent with the requirements of the jurisdiction in which they operate. De Beers prepares annual and independently audited statutory accounts of both the Company and the Group in accordance with International Financial Reporting Standards.

Lobby at 17 Charterhouse Street


Four directors on the Board serve in an executive capacity and are members of the Executive Committee. Each shareholder group is entitled to nominate two persons for appointment to the Board. Accordingly, six directors, four of whom are non-executives and two executives (the Chairman, Nicky Oppenheimer, and Jonathan Oppenheimer) are currently appointed under the appropriate clauses of the Shareholders’ Agreement.

The role of the Chairman is quite distinct from that of the Chief Executive Officer. As defined in the Shareholders’ Agreement, up to ten independent directors may be appointed by CMSL under the Management Contract in consultation with the shareholders. Independent directors are those appointed independently of the shareholders’ direct entitlement.

A majority of these independent directors must be employed or hold executive office with De Beers. Three directors, one of whom is non-executive, are currently appointed to the Board under the appropriate provisions of the Management Contract.

Additional independent directors may be appointed by shareholders by majority consent or majority vote at the Annual General Meeting of shareholders. Four non-executive directors are currently appointed to the Board in this manner under the appropriate provisions of the Shareholders’ Agreement. Accordingly, of the 13 directors currently in office, seven are independent directors (as defined in the Shareholders’ Agreement) and nine are non-executive directors. A number of directors have both independent and non-executive status.

Structures under the BoardThe Board is responsible for the Group’s system of governance and is ultimately accountable for the strategic direction of the business and all activities across the Family of Companies. This includes setting risk management policy, reviewing the effectiveness of risk management processes, recommending enhancements and ensuring effective succession planning.

It also provides oversight of, and consultation to, the different business entities across the Family of Companies on governance structures and on the identification, appointment and training of directors. The Board also reviews reputation and sustainability performance and risks on at least an annual basis in line with the formal risks review process.

Detail on these risks is presented in the introductory statement of the Chairman and performance overview of the Acting Joint Chief Executive Officers, as well as in our Report to Society 2010, which will be published in May 2011. The De Beers Board is supported in its decision-making by six committees: the Executive Committee, the Audit Committee, the ECOHS Committee, the Investment Committee, the Remuneration Committee and the Treasury Committee.

Although not an official committee under the Board, the Principles Committee provides further review and scrutiny on the extent to which the Family of Companies contributes to sustainable development and operates in conformance with its Principles.

In 2008, the Board adopted a Board Charter which, inter alia, sets out the mandate of the Board and those powers reserved to it.

Risk managementThe shareholders and Board recognise that engaging risk is at the core of the business. De Beers is governed by a risk framework through which risks are proactively identified, engaged and managed. This includes taking advantage of opportunities and protecting capital, income and assets by mitigating the adverse impacts of risk.

Nicky Oppenheimer at Venetia Mine

Governance and risk continued


Sustainability

Our commitment to operating in a responsible and sustainable manner sits at the heart of the De Beers business strategy. It requires us to strike the balance between delivering good financial returns, while also addressing the risks that could affect the sustainability of the business and the societies in which we work, and the reputation of the De Beers Family of Companies.

Contributing to sustainable developmentOur understanding of sustainability is shaped by the societal imperatives of our partner governments and communities. This includes helping to define the role of business in contributing to a vision of an ever more prosperous Africa. We aim to maximise our contribution to sustainable development through beneficiation activities to support downstream diamond-sector activity in producer countries, community social investment, and local enterprise generation through preferential procurement.

Our approach to sustainability is focused on managing and mitigating those risks that can affect our commercial interests by undermining consumer confidence in diamonds or impacting on our access to supply. These relate primarily to: ensuring our social licence to operate, conflict diamonds, social and environmental conditions in cutting and polishing operations, the use of diamonds by criminal syndicates, and issues around product integrity.

Managing sustainability risksWe prioritise and categorise sustainability risks into five key areas: economics, ethics, employees, communities and environment. Extensive stakeholder engagement processes help us to assess the relevance and materiality of each risk and to develop appropriate management responses.

Ongoing stakeholder engagement is one element of a broader sustainability management framework, which also includes the Principles Management Committee, the Environment, Community, Occupational Hygiene, Health and Safety (ECOHS) Committee (at Board level) and local ECOHS functions (operating at business and community level). The Principles Committee is a management committee that provides guidance and oversight to the Executive Committee and Business Unit CEOs to ensure that the Family of Companies engages proactively with sustainability issues and related long-term risks. The ECOHS Board

Committee and associated peer groups act in the same way, providing strategic direction on ECOHS disciplines to the business units.

Our Best Practice Principles framework (BPPs) also drives sustainability performance by providing a comprehensive third party verified assurance programme to ensure the effective management of key risks across the diamond pipeline. The BPPs outline strict requirements regarding compliance to the Kimberley Process and associated System of Warranties. They also set out clear minimum standards of performance against a range of other criteria including social, environmental, labour, and health and safety standards, and product integrity requirements including the disclosure of synthetics, treatments and simulants. All entities within the De Beers Family of Companies as well as all Sightholders and significant contractors are required to comply with the BPPs.

Annual Report to SocietyMore information on our sustainability approach can be found in our award-winning annual Report to Society, which can be accessed at www.debeersgroup.com/sustainability. The 2010 Report to Society will be available online and as a concise printed Review from May 2011. Please order a hard copy online by completing the RtS Order Form on the microsite for this Operating and Financial Review (www.debeersgroup.com/ofr2010).

Wildlife living near Debswana operations


Board and board committee composition

Board1. Nicky Oppenheimer ChairmanYear of birth: 1945Qualifications: MA (Oxon)Date of appointment to DBsa board: 2.11.2000Current occupation: Executive Chairman, De Beers Other directorships: Anglo American Corporation of South Africa Limited, Anglo American plc, Centhold International, Limited, DBCM Holdings (Proprietary) Limited, De Beers Consolidated Mines Limited, Debswana Diamond Company (Proprietary), Limited (Chairman), De Beers Investments (Chairman), Namdeb Diamond Corporation (Proprietary) Limited (Chairman), Tswalu Kalahari Reserve (Proprietary) Ltd, The Diamond Trading Company Limited (UK) Appointed by Central Holdings shareholders

2. Dr. Mark BerryYear of birth: 1947Qualifications: PhD; MSc; BSc Hons; BSc Date of appointment to DBsa board: 2.04.2003 Current occupation: Retired Other directorships: Tswalu Holdings (Proprietary) Limited (Isle of Man), Tswalu Kalahari Reserve (Proprietary) Limited (Chairman), Jakhalsberry Farming and Tourism (Proprietary) Limited Elected by majority consent of shareholders at the AGM

3. Stuart BrownYear of birth: 1964Qualifications: B Accounting (Science) Date of appointment to DBsa board: 5.04.2006 Current occupation: Chief Financial Officer/Acting Joint Chief Executive Officer Other directorships: DBCM Holdings (Proprietary) Limited, De Beers Consolidated Mines Limited, De Beers Group Exploration Holdings Limited, De Beers India Private Limited, Debswana Diamond Company (Proprietary ) Limited, Element Six Abrasives S.A., Element Six S.A., Namdeb Diamond Corporation (Proprietary) Limited Appointed by CMSL, the Management Company

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4. Cynthia CarrollYear of birth: 1956Qualifications: MS Geology (University of Kansas), MBA (Harvard University) Date of appointment to DBsa board: 1.03.2007 Current occupation: Chief Executive, Anglo American plc Other directorships: BP plc, Anglo Platinum Limited (Chairperson), DB Investments Appointed by Anglo American shareholders

5. Bruce CleaverYear of birth: 1965Qualifications: BSc Applied Maths, LL.B (University of Cape Town), LL.M (Cambridge) Date of appointment to DBsa Board: 23.07.2008Current occupation: Chief Commercial Officer/Acting Joint Chief Executive Officer Other directorships: De Beers Angola Investments Limited, De Beers Centenary Mauritius Limited, De Beers Group Exploration Holdings Limited, De Beers Mauritius Private Limited, De Beers Trademarks Limited, De Beers UK Limited, Delibes Holdings Limited Appointed by CMSL, the Management Company

6. Baron David de RothschildYear of birth: 1942Date of appointment to DBsa Board: 5.04.2006Current occupation: Group Chairman – Rothschild Other directorships: Casino, Compagnie Financièere Martin Maurel, La Compagnie, Financière Saint-Honoré, Board of Casino, Fondation pour la Mémoire de la Shoah, (Chairman),Euris SA, N M Rothschild & Sons, Limited (Chairman), Supervisory Board of Paris, Orléans, Rothschild Bank AG, Zurich (Vice, Chairman), Rothschild & Cie Banque, Rothschilds, Continuation Holdings AG (Chairman) Elected by majority consent of shareholders at the AGM. Appointed by CMSL, the Management Company

7. Joseph IitaYear of birth: 1955Qualifications: Ordinary Diploma – Electrical and Mechanical Engineering, Higher Diploma in Electrical and Electronic Engineering, B.Eng (Hons) Communications (Electronic) Engineering, Master Degree in Public Policy and Administration Date of appointment to DBsa Board: 30.01.2002Current occupation: Permanent Secretary Ministry of Mines and Energy Namibia Other directorships: Namdeb Diamond Corporation (Proprietary) Limited (Deputy Chairman), Namdeb Properties (Proprietary) Limited (Chairman), Telecom Namibia Limited (Chairman) Elected by majority consent of shareholders at the AGM

8. René MedoriYear of birth: 1957 Qualifications: Doctorate in EconomicsDate of appointment to DBsa board: 7.02.2007 Current occupation: Finance Director Anglo American plc Other directorships: Anglo Platinum Limited, DB Investments, Scottish and Southern Energy plc Appointed by Anglo American shareholders

9. Jonathan OppenheimerYear of birth: 1969 Qualifications: BA Hons (Oxford) Date of appointment to DBsa board: 5.04.2006 Current occupation: Head of Chairman’s Office De Beers Group Other directorships: Centhold International Limited, DB Investments, DBCM Holdings (Proprietary) Ltd, De Beers Canada Inc (Chairman), De Beers Consolidated Mines Limited, Element Six Abrasives S.A. (Chairman), Element Six Holdings Limited (Chairman), Element Six S.A. (Lux) (Chairman), Saïd Business School Advisory Forum – Oxford University, Tswalu Kalahari Reserve (Proprietary) Ltd, The Diamond Trading Company Limited (UK), Umicore (Brussels) Appointed by CMSL, the Management Company

10. Boikobo PayaYear of Birth: 1964 Qualifications: BSc Geology (University of Portsmouth), MPhil Geology (University of Botswana) Date of appointment to DBsa Board: 17.11.2010Current Occupation: Government of the Republic of Botswana’s Permanent Secretary at the Ministry of Minerals, Energy and Water Resources Other directorships: DTC Botswana (Proprietary) Limited, DB Investments Appointed by GRB shareholder

11. Barend PetersenYear of birth: 1960 Qualifications: B Compt (Hons) CA (SA) Date of appointment to DBsa board: 6.02.2008 Current occupation: Executive Chairman, DBCMOther directorships: Alexander Forbes Equity Holdings (Proprietary) Limited, Anglo American Corporation of South Africa Limited, DBCM Holdings (Proprietary) Limited, De Beers Consolidated Mines Limited (Executive Chairman), Investment Solutions Limited, Ponahalo Investments (Proprietary ) Limited Elected by majority consent of shareholders at the AGM

12. Solomon SekwakwaYear of Birth: 1960Qualifications: BA in Economics and a Master of Arts degree in Development Economics Date of appointment to DBsa Board: 4.02.2009 Current Occupation: Government of the Republic of Botswana’s Permanent Secretary at the Ministry of Finance and Development Planning Other directorships: Bank of Botswana Limited, Botswana Development Corporation Limited, Debswana Diamond Company (Pty) Limited, DB Investments Appointed by GRB shareholder

13. James TeegerYear of birth: 1967 Qualifications: BCom, B Accounting, CA (SA) passed PAAB Board exam, Higher Diploma Tax Law Date of appointment to DBsa board: 6.02.2008Current occupation: E Oppenheimer & Son Group MD Other directorships: E Oppenheimer & Son (Proprietary) Limited, Central Investments DBI, DB Investments Appointed by CMSL, the Management Company


Executive committee

Other committee members

1. Phillip Barton, CEO, DBCM

2. Sue Boxall, Group HR Director

Stuart Brown

Bruce Cleaver

3. Jim Gowans, MD, Debswana

4. Cyrus Jilla, CEO, Element Six

5. Stephen Lussier, CEO, Forevermark

6. Neo Moroka, CEO, De Beers Holdings Botswana

Jonathan Oppenheimer

7. Varda Shine, CEO, DTC

8. Inge Zaamwani-Kamwi, MD, Namdeb

ECOHS Committee

Barend Petersen, Chairman

Dr Mark Berry

Dorian Emmett (co-opted)


Boikobo Paya

Remuneration Committee

James Teeger, Chairman

Nicky Oppenheimer

Mervyn Walker (co-opted)

Investment Committee

Stuart Brown, Acting Chairman


Solomon Sekwakwa

Peter Whitcutt

Audit Committee


Polly Carr

Peter Whitcutt

Treasury Committee


Stuart Brown

Mark Changfoot

Bernard Olivier

Adrian O’Sullivan

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Contact us

Angola De Beers Angola Holdings Caixa Postal no 4031 Luanda Tel: +244 (0) 222 63 8800 Fax: +244 (0) 222 63 8801

BotswanaDe Beers Holdings Botswana Private Bag 00380 Gaborone Tel: +267 (0) 390 2991 Fax: +267 (0) 390 2990

De Beers Prospecting Debswana PO Box 404331 Gaborone Tel: +267 (0) 391 9962 Fax: +267 (0) 395 9106

Debswana Diamond Company, PO Box 329 Gaborone Tel: +267 (0) 361 4200 Fax: +267 (0) 395 2941/6110

Diamond Trading Company Botswana Private Bag 0074 Gaborone Tel: +267 (0) 364 9000 Fax: +267 (0) 364 9999

CanadaDe Beers Canada 900-250 Ferrand Drive Toronto, ON M3C 3G8 Canada Tel: +1 (0) 416 645 1710 Fax: +1 (0) 416 429 2462

IndiaDe Beers India Advanced Business Centre 83 Maker Chambers VI Nariman Point, 400 021, Mumbai Tel: +91 (0) 22 2283 2971/27 Fax: +91 (0) 22 2283 2823

Luxembourg De Beers Société Anonyme BP591, L-2014 Luxembourg Tel: +352 (0) 264 8711 Fax: +352 (0) 264 871 303

NamibiaDe Beers Namibia PO Box 23132, Windhoek, 9000 Tel: +264 (0) 61 204 3444 Fax: +264 (0) 61 204 3445

Namdeb PO Box 1906, Windhoek, 9000 Tel: +264 (0) 61 204 3333 Fax: +264 (0) 61 204 3334

Namibia Diamond Trading Company PO Box 23316, Windhoek, 9000 Tel: +264 (0) 61 204 3222 Fax: +264 (0) 61 204 3263

South AfricaDe Beers Consolidated PO Box 616 Kimberley, 8300 Tel: +27 (0) 53 839 4111 Fax: +27 (0) 53 839 4210

De Beers Consolidated Mines Corporate Head Quarters Cnr. Diamond Dr. & Crownwood Rd. Theta/Booysen Reserve Johannesburg Gauteng Republic of South Africa Tel: +27 (0) 11 3747000

United KingdomDe Beers UK Ltd 17 Charterhouse Street London ECIN 6RA Tel: +44 (0) 20 7404 4444 Fax: +44 (0) 20 7831 0663

This PDF is only available to download from the De Beers sa online Operating & Financial Review 2010. For more information, please visit www.debeersgroup.com/OFR2010.

Acknowledgements © De Beers UK Limited 2011. All rights reserved. De Beers UK Limited is a company incorporated in England and Wales with registered number 2054170 and registered office 17 Charterhouse Street, London EC1N 6RA. De Beers™, A Diamond is Forever™, DTC™, and Forevermark™ are used under licence by De Beers UK Ltd.

Prepared and produced by the De Beers Family of Companies in partnership with Salterbaxter.Designed by Salterbaxter www.salterbaxter.com

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