Rössing Uranium procures goods through Namibian-registered suppliers


Staff Reporter

Rio Tinto’s Rössing Uranium has revealed it spent N$2.4 billion on goods and services for the mine’s operations during 2016.

Rössing Uranium Limited managing director Werner Duvenhage said most of the procurement expenditure was on Namibian-registered suppliers, amounting to N$1.8 billion and accounting for 76.7 percent of the company’s total procurement expenditure.

“Rössing is a major player in the Namibian economy, with significant contributions in sourcing of goods and services, taxes, training, development as well as community investment. Rössing Uranium gives rise to a significant ‘multiplier effect’ — the phenomenon where spending by one company creates income for and further spending by others,” he said.

Given the prevailing market conditions, Duvenhage noted, their primary focus was to procure goods and services as cost-effectively and efficiently as possible and to focus on maximising their contribution to the local economy.

In the report to stakeholders, which covers the period January to December 2016, he revealed the company purchased N$90 million worth of goods and services from previously disadvantaged Namibians (SMEs).

Rössing Uranium, one of the largest and longest-running open pit uranium mines in the world, mined 24.4 million tonnes of rock and milled 9.1 tonnes of uranium bearing ore. This allowed the mine to produce 1 850 tonnes of uranium oxide, which is a 48 percent increase in output compared to the previous year’s production output.

The mine had a turnover of N$3 billion in 2016, nearly twice the N$1.8 billion recorded in 2015, to register a net profit of N$107 million. The previous year Rössing Uranium suffered a loss of N$385 million.

Further, Duvenhage emphasized that 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.

During the year under review, he said, Rössing committed more than N$15.4 million towards the implementation of community initiatives and activities.

“This is over and above the direct and indirect economic benefits we created through local employment and the procurement of goods and services from local businesses. Most of our community and social investments are channelled directly through the Rössing Foundation, but the mine also supported various community investment initiatives directly,” he stated.

Equally, he said, they continually report on the company’s environmental performance in a transparent manner.

He said Rössing Uranium is conscious of the fact that water is a precious resource; and because the mining industry is typically a large water user, water conservation measures at the mine are taken seriously.

The mine is located in the Namib Desert, therefore, he said, water management is one of the most crucial environmental and operational focus areas of their activities.

Water management includes all aspects of groundwater pumping, seepage management as well as storage, reuse and recycling of surface and groundwater.

Since 1980 the mine has been recycling 60 to 70 percent of water used, which is indicative of an effective water management strategy.

According to him, their operating plan of 2016 set a target for fresh water use of 2.9 million cubic metres (m³) supplied by NamWater.

But he noted the actual consumption of fresh water was 2.1 million m³ in 2016.
“The current cost of water is high and the mine remains open to implementing alternative measures to reduce the cost of desalinated water,” he maintained.

In June 2016, he said, the environmental clearance certificate for the construction of Rössing Uranium’s own desalination plant at Mile 4 close to Swakopmund was received from the Environmental Commissioner’s office of the Ministry of Environment and Tourism.

To meet prerequisites for receipt of the certificate Rössing Uranium applied for the water permits required by the Department of Water Affairs and Forestry in September 2016.

However, he added, no reply from the department had been received by the end of 2016.

“We acknowledge the importance of caring for the ecosystems and biodiversity in the regions where we operate. Likewise, we are aware that sustainable growth requires an effective response to climate change.”

“As a significant uranium producer and consumer of energy, we are committed to reducing greenhouse gas (GHG) emissions,” Duvenhage added.
He said the establishment of the Rössing Environmental Rehabilitation Fund, which provides for expenditures associated with the mine’s closure, complies with statutory obligations and stipulated requirements of both the Ministry of Mines and Energy and the Ministry of Environment and Tourism.
At the end of December 2016, he said, the fund had a cash balance of N$603 million.
Additionally in 2016 the total cost of closure, excluding retrenchment costs, was estimated at N$1.5 billion.
He said the mine will make additional payments to the fund each year to provide for the eventual total cost of closure by 2025.
By the end of 2016, he said, they had a personnel complement of 949 full-time employees (currently 967) – of whom 98.4 percent are Namibians and 17 percent are females. The average number of contractors at the mine for the reporting period was 752.


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