WINDHOEK – Rio Tinto’s Rössing Uranium Mine in the Erongo Region reported a net profit of N$32 million in 2013 after incurring losses in 2010, 2011 and 2012.
This is despite the impact of lower uranium prices, which strained the mine’s operational cash flow and forced the mine to embark on cost-cutting initiatives last year to ensure that it stays operational. Rössing’s turnover in 2013 was N$2.96 billion, up from N$2.88 billion in 2012. “Despite the challenges, we are particularly proud that our workforce has shown resilience, commitment and creativity in respect of overcoming these issues. Looking at Rössing’s history, we have made it through tough times in the past only because our employees accept and rise to the challenge. During 2013 Rössing made significant improvements across the range of business performance metrics,” remarked Rossing’s Managing Director, Werner Duvenhage, during the release of the mine’s 2013 report to stakeholders.
Duvenhage added that during 2013 the mine’s productivity improved significantly, while it saved more than N$300 million in a wide range of cost-reduction activities. “We produced 2 409 tonnes of U3O8 (yellowcake), down from 2 699 in 2012, which accounts for about 3.4 percent of world production of primary produced uranium,” said Duvenhage. “Positioning Rössing to withstand short and medium economic challenges has become part of the daily business of the operation and the pressure remains to drive operating costs to remain competitive. At the moment our business is negatively affected, and along with poor productivity and high production costs so far this year, we are not making a profit and cannot cover our current costs,” added Duvenhage.
Last week the Rössing Board of Directors gave the mine an opportunity to review its current business operations and in this way gave the company the opportunity to become more sustainable in the short- to medium-term. “This is our chance to review our operations and to come up with the most feasible survival option. What we foresee is that with the input from all employees, we will have to come up with a plan that would see us through this difficult period. At this stage we simply do not know what will be the outcome of this review exercise, but we do know that it would impact us all in one or the other way,” Duvenhage said. Rössing currently boasts a staff complement of more than 1140 employees, of whom 98 percent are Namibians. According to the managing director the company’s strategic focus continues to be on training and developing its employees, and addressing skills shortages. Rössing Uranium has invested more than N$63 million in training and development over the past five years, according to Duvenhage.
Last year Rössing Uranium spent N$1.9 billion on goods and services in Namibia, generating N$83 million in royalty payments and N$143 million in PAYE payments, while it made N$289 million in payments to state-owned enterprises, and N$783 million in employment costs.
Duvenhage continued that the 2011 tsunami in Japan and its impact on the Fukushima nuclear plant continued to plague the uranium market in 2013, with excess supply causing a decline in market prices. He added that nuclear plants in Japan remained off-line for most of the year. “Supply has increased over the three years since the Fukushima incident. This is a recipe for continued weak prices in the near term. Utilities are holding large stocks in all forms, which defer their need to buy for one to three years on average,” he explained. “However, the long-term outlook for the nuclear industry remains encouraging as a number of new mines are expected to enter production in the next couple of years, but the industry will need new mines to be developed in the next five years in order to meet the demand later this decade and in the post-2020 period,” Duvenhage said.
By Staff Reporter