In 2009, De Beers Exploration spent US$44.8 million (2008: US$94.6 million) on work programmes in Angola, India, Botswana, South Africa and Canada supported by technical and laboratory services from South Africa. Despite the significant reduction in budget, Exploration maintained a high discovery rate adding 45 kimberlites, up from the 37 discoveries in 2008.

In the past three years, Exploration has focused its activities on defined target areas in the world’s most prospective countries. In 2009 the division took three kimberlites in Angola into the advanced work programme and continued to develop the critical in-house skills and capabilities required in the fields of drilling, DMS plant treatment and diamond recovery. These developments have ensured the rapid delivery of results and the advancement of projects from the early stage into deposit assessment.

Exploration activities in Angola are focused on two concessions of 3,000km² each: the Lunda NE concession, located in the Lunda North province, near the town of Lucapa, and the Dando Kwanza concession in the province of Bié in the highlands of Central Angola, east of the town of Andulo.

In the Lunda NE concession De Beers has discovered 108 kimberlites. The economic assessment of these discoveries has rapidly progressed with 60 sampled for microdiamonds and 33 bulk-sampled at depth through large-diameter drilling.

Results from the Lunda NE project are steadily being integrated with geological models and revenue information with a view to selecting priority pipes and clusters for more detailed drill bulk sampling. Three immediately adjacent pipes have been selected for priority work in an area where the average overburden is less than 40 metres. It is expected that additional pipes will be added to the evaluation portfolio as further results become available.

Whilst at an early development stage, the programme at Dando Kwanza has advanced rapidly. Exploration activities are now focused on an isolated cluster of some 42 kimberlites in the catchment area of the diamond-bearing Lubia River. In 2009, an on-site diamond recovery plant was commissioned and one kimberlite was bulk-sampled.

In 2009, Exploration activity focused on evaluating satellite kimberlite pipes around the Victor mine and, in addition, finding pipes in the Attawapiskat area. Two kimberlites were discovered in 2009 and evaluation work continued on the prioritised kimberlites in the Victor cluster. The objective of the work is to define further resources that could potentially contribute to the existing reserves of the Victor mine.

De Beers has a significant database of prospecting information collected over the past 50 years across South Africa and Botswana. This data was utilised in 2009 through technical reviews by our specialist teams. These reviews led to reconnaissance phase prospecting activities to target priority areas for the discovery of new kimberlites with particular focus on the areas surrounding the existing DBCM and Debswana mines.

In India, exploration activities focused on early stage reconnaissance and targeting work. Ground-holdings have been reduced by 50% in line with the strategy to focus on the most prospective high- priority target areas.

Although the Democratic Republic of Congo (DRC) and Russia remain highly prospective regions, offices were scaled down and closed, respectively, in 2009 as a consequence of resource limitations.

The combined Group Exploration lost time injury frequency rate (LTIFR) for 2009 was 0.89, compared to the 2008 LTIFR of 0.49. This is due to 7 lost time injuries being reported in 2009 compared to 5 in 2008. Exploration in India achieved more than one million lost time injury (LTI) free hours having registered zero LTIs since 2004. In Canada De Beers Exploration achieved four years without a LTI. Safety remains Group Exploration’s main priority and the teams are committed to becoming more proactive in order to achieve the goal of ‘zero harm’. The diamond recovery laboratories in South Africa achieved OHSAS18001 safety certification. The India operations, South Africa laboratories, technical support and field operations retained their ISO14001 environmental certification.

De Beers remains committed to exploring for profitable diamond mines of the future to ensure the long-term sustainability of its business. Group Exploration has developed a long-term strategic business plan focused on the delivery of profitable new carat production from its highly prospective portfolio.