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Home / Rossing’s revenue up 5%; reports N$166.5 million net profit after tax

Rossing’s revenue up 5%; reports N$166.5 million net profit after tax

2019-05-08  Edgar Brandt

Rossing’s revenue up 5%; reports N$166.5 million net profit after tax

WINDHOEK – Rössing Uranium Mine increased its production with 17 percent in 2018 as it produced 2 479 tonnes of drummed uranium oxide compared with 2017’s production of 2 110 tonnes. However, the total mined tonnes were 24 percent below production targets following a mining slowdown to curtail the impact of water supply interruptions. 

These figures were revealed on Monday evening when the mine released its latest Rössing Uranium’s Report to Stakeholders 2018, which indicated that the water restrictions significantly contributed to below plan milling output of 8 percent, while full year production was approximately 9 percent below the target. The report explains Rössing’s operations and outlines how the mine performed in 2018 as measured against key drivers.

“Revenue increased by five percent compared with the previous year, due to a combination of a marginally better sales price achieved and a more favourable exchange rate. Our cost saving initiatives unlocked N$310 million, which mitigated other cost increases from above inflationary utility price increases and imported consumables priced in foreign denominations,” read Rössing Managing Director Richard Storrie’s statement in the most recent report. 
Storrie noted that a combination of various factors had a positive impact on mining performance and resulted in a net profit after tax of N$166.5 million from normal operations. In 2017 Rössing Uranium reported a net profit after tax of N$1.9 million. 

“In our ambition to be the best in the industry, we continuously focus on two areas that we must be best in – safety and productivity. High on our priority list was also the need to contain our operational expenditure in an environment where we have to continue investing in growth and preserve cash to maintain our operations. We will continue to look for ways of improving operating cost efficiencies, reducing capital spend and improving our working capital position,” said Storrie. 
He added that as a major employer and a purchaser of goods and services, Rössing’s contribution to the economic development in the country, and more specifically in the Erongo Region, is significant. 

“In 2018, our total expenditure for goods and services for our operations amounted to N$2.49 billion, of which 78 per cent was spent with Namibian-registered suppliers. The bulk of what we spend in Namibia remains in the Erongo (44 per cent) and Khomas (45 per cent) regions,” Storrie added. 

However, Storrie expressed disappointment in the mine’s safety performance in 2018 when the mine recorded an All-injury Frequency Rate (AIFR) of 0.83 for the year, against a target of 0.35. He emphasised that Rössing had five months with no recordable injuries, saying that this is an indication that zero harm is possible and achievable. 

Meanwhile, Storrie welcomed the sale of shareholding In November 2018 when Rio Tinto, Rössing’s majority shareholder, announced the signature of a binding agreement with China National Uranium Corporation Limited (CNUC) for its shares held in Rössing. The transaction is subject to a number of conditions to be met and is expected to be completed in the first half of 2019.

“The announcement of the sales transaction of the majority shareholding is seen as very positive, giving certainty to the survival of the operation at least until 2025 and potentially extending the mine life beyond that. The deal will bring an aspect of vertical integration into the Chinese nuclear market, and in particular with the strongest player in that market,” Storrie stated. 

He continued that although global uranium oxide inventories remain high, uranium prices witnessed the best performance among commodities last year. This performance, said Storrie, was driven by a downward shift in expected supply growth in the medium-term and a renewal of investor interest in the market. 

“For the next year, Rössing will have a large exposure to the spot market. However, the potential shareholding sales transaction will facilitate the sale of its production into a vertically integrated off-taker in the Chinese nuclear market. With China being the only country aggressively expanding their nuclear fleet, this is seen as a positive development for the mine,” Storrie explained. 

He concluded that going forward Rössing will continue its consolidation and cost-saving efforts along with focusing on maximising resources. 

“It is imperative that we must maintain a culture of cost discipline, but above else, we must prioritise safety and in all aspects of our business strive to create a safe and caring workplace. It is vital that we consistently engage our people, as good engagement leads to good safety performance,” said Storrie. 

2019-05-08  Edgar Brandt

Tags: Khomas
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