CNNC Rössing Uranium has been a feature of the Namibian economy for close to 44 years and has made significant contributions to the development of Namibia. I am confident that Rössing will continue to be a major supplier of energy to the world, as well as delivering value to shareholders and other stakeholders, for a significant number of years to come.
A new era for Rössing Uranium
2019 will be remembered as the beginning of an exciting new chapter in Rössing Uranium’s rich history.
On 25 July 2019, China National Nuclear Corporation, (CNUC), concluded the purchase of Rio Tinto’s 68.62% shareholding in Rössing Uranium, with no change in the other, minority shareholders. CNUC is a subsidiary of state-owned China National Nuclear Corporation Limited (CNNC), a vertically integrated supplier of nuclear energy into the Chinese and international markets. Being part of this giant family brings to Rössing Uranium all the benefits of shared cooperation and a solid base from where to build the future of the mine.
The uranium market
The uranium spot market price in 2019 averaged US$25.91. In the medium- to long-term uranium prices are expected to recover, but may take another five years. Moderate demand growth and subdued supply will drive a gradual price appreciation. While demand is expected to grow in the long term, the rate of growth remains uncertain. 2019 witnessed a series of positive news events on nuclear development. China, for the first time since 2016, finally re-launched its approval for new projects and construction with at least four reactors having been approved (two at CNNC’s Zhangzhou site and two at CGN’s Huizhou site).
Of the 11.0 per cent uranium produced by Namibia in 2019, as part the world’s primary production of uranium oxide, Rössing Uranium produced 3.9 per cent. This is a significant achievement for both Rössing Uranium and Namibia. 75 per cent of Rössing’s total production was delivered under long-term contracts and several historical spot contracts. The remaining production will be sold during 2020 to China, to be loaded into CNNC nuclear reactors. This vertical integration into the CNNC group opens a significant marketing opportunity into China for Rössing Uranium.
Business prospects going forward
In 2019 the Company went through many changes, some of these under less-than-favourableoperational circumstances, but we achieved a lot:
- A total of 22.4 million tonnes of rock was mined, (13% more than in 2018) of which 8.6 million tonnes was economic uranium-bearing ore, (7% more than in 2018), with13.3 million tonnes waste and low grade ore mined.
- A total of 2,449 tonnes of uranium oxide was produced in 2019, marginally lower when compared with 2018’s production of 2,479 tonnes, whilst ending the year with healthy inventories on site.
- Revenue was in line with 2018 at N$2.82 billion. Lower sales volumes were largely offset by a more favourable exchange rate. However, a 15% reduction in operating costs had a positive impact on profits before tax. The reduced costs largely contributed to an improved net profit after tax from normal operations of N$503 million (2018: N$166 million).
2020 and the next few years will still be challenging, but with our new majority shareholder we are confident that we will build from a solid base, exploring various opportunities to remain a competitive supplier of uranium into the nuclear energy market.
Building the local economy
As a major employer and purchaser of goods and services, we make a significant annual contribution to economic development in the Erongo Region, in particular, and to Namibia at large.
- In 2019, total expenditure for goods and services to maintain safe operations amounted to N$2.72 billion (2018: N$2.49 billion), of which 75 per cent, (N$2.03 billion), was spent with Namibian registered suppliers. The bulk of the Namibian spend was in the Erongo Region (43%) and Khomas Region (44%).
- Total procurement from international suppliers amounted to N$373 million, representing 14 per cent of total procurement expenditure, excluding South Africa, where goods and services to the value of N$311 million (11%) of total procurement was spend.
- Rössing invested N$26 million in Namibian communities during 2019, directly and through the Rössing Foundation. This is a 100 per cent increase compared with the previous year.
The Company’s Value Addition statement on pages 66 & 67 of the report, reflects the wealth created through the sale of uranium oxide produced, payment for services to suppliers, taxes to the Namibian Government, payments to employees and the investments made in neighbouring communities.
The Rössing Foundation’s annual report will be available on its website soonest – please visit the website www.rossingfoundation.com for information on the significant work done by the Rössing Foundation.
Employer of Choice
At Rössing capacity building and development of employees is a critical process aimed at enhancing productivity and organisational performance. Aspiring to be the employer of choice, Rössing Uranium provides long-term and rewarding employment by investing in its people throughout their careers, with 98.7 per cent of the workforce being Namibian and only 1.3 per cent expatriates from other nationalities.
Safety, Health and the Environment
At Rössing Uranium, safety is the foundation on which the business is build. Recognising Rössing’s safety efforts and achievement, Rössing won the Chamber of Mines’ 2019 Best Safety Award in the Operating Mines category for the second consecutive year.
The mine recorded an AIFR of 0.49, a significant improvement on the 0.83 AIFR recorded in 2018. It is also the same AIFR recorded in 2012, and the third best since 2004.
The Company remains committed to zero harm and have put rigorous processes and systems in place to ensure that every employee and contractor finishes his or her work day as safely and as healthy as they were when they reported for work.
As part of Rössing’s continuous improvement focus, demanding goals are set in protecting the environment in which the Company operates, and conservation measures at the mine are taken seriously, with particular focus on water management and monitoring. Rössing has a strong history of engagement and co-operation with regulators and other stakeholders to ensure that the environment remains protected.
Rössing Uranium Limited
Source: Rössing Uranium Mine