2015-05-20Staff Report 2 Despite a slump in global uranium prices Rössing Uranium is still a major player in the Erongo Region’s economy, with significant contributions in sourcing of goods and services, taxes, training, development as well as community investment. According to Rössing’s Managing Director, Werner Duvenhage, the mine spent N$1 597 million on goods and services, of which 68 percent was spent domestically, mostly in Erongo. In addition, during the past five years Rössing has invested more than N$152 million in social responsibility programmes. “Rössing remains a responsible corporate citizen with corporate social responsibility programmes extending into the work of the Rössing Foundation, providing support in the fields of the environment, education, health and recreation for more than 30 years,” said Duvenhage. During the launch of the Rössing Report to Stakeholders 2014 which took place in Windhoek on Monday, Duvenhage noted that domestic expenditure leads to a long chain of value addition throughout the country’s economy. During the launch of the report, Duvenhage noted that the long-term future for uranium remained encouraging and that the market price for uranium was expected to rise in line with an expected increase in demand as utilities look to secure fuel for their 2017 to 2023 needs. “As we work our way through the current challenges of our business environment, I am confident that Rössing will continue to be a major supplier of energy to the world, as well as delivering value to our shareholders and other stakeholders,” said Duvenhage. Rössing’s Report to Stakeholders serves to outline how the mine performed in 2014, measured against key drivers. “Following a challenging 2013, 2014 was certainly not easier. However, our will to survive, to find innovative ways to work smarter and to face the many challenges of our business head on, paid off: we made progress during yet another tough year,” added Duvenhage. The Rössing MD continued that in the mine’s 39-year history, there have been times when similarly challenging periods were experienced. “We survived these too – and went on to prosper when market conditions improved,” said Duvenhage. After a leach tank failure in December 2013, Rössing’s operations gradually resumed during the first quarter of 2014. “In the first half of the reporting year, uranium market prices dropped even lower than their 2013 levels. This led to the Board of Directors’ decision to curtail operations from August 2014 onwards,” explained Duvenhage. He added that the curtailed operational plan involved moving to non-continuous operations in the mining and processing areas, with the objective of producing only enough uranium oxide to meet the mine’s long-term sales commitments. Rössing Uranium also embarked on an organisational redesign exercise, which changed its 7-day, 24-hour operation to a 5-day, 24-hour operation. “This in turn led to a decision to reduce our workforce – always a tough choice, but our long-term survival was at stake. A leaner structure has allowed us not only to improve productivity, but also to reduce our employee costs by over N$100 million,” noted Duvenhage. During 2014, Rössing produced 1 543 tonnes of uranium oxide, compared with 2 409 tonnes in 2013. The mine’s revenue therefore decreased by 19 percent compared to the previous year, mainly due to significantly lower market prices and sales volumes, which in turn led to a net loss after tax of N$91 million (2013: net profit after tax of N$32 million) from normal operations. 2015-05-20Staff Report 2
