Mining jobs on the line



Windhoek -Rio Tinto’s Namibian Rossing Uranium Ltd says that it will institute further job cuts as part of a review of operations to rein in costs and ensure the mine “becomes more sustainable in the short- to medium-term”.

“It is very likely that we will cut jobs, there is a design process at the moment, how many people we will lay off, we don’t know yet,” Rossing managing director Werner Duvenhage said.

Job cuts “are investable” at the mine, Duvenhage said. Rossing, which employs 1 141 workers, laid off 276 workers last year after two years of losses following a 2011 tsunami in Japan that reduced demand for the metal.

The company would review operations to come up “with the most feasible survival option”.

“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,” Duvenhage said.

“We will have to come up with a plan that would see us through this difficult period,” Duvenhage said.

“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,” he added.

Rossing suffered an 11 percent drop in output to 2 409 tonnes. 

The uranium miner says that net income was R32 million, after recording consecutive losses for the past three years.

“It’s an insignificant amount but it’s a profit. It was a tough year because the uranium price continued to decline globally, putting substantial pressure on our business, and even as recently as last week the price dropped to under US$30 per pound,” Duvenhage said.

Revenue rose to R2.96 billion in 2013 from R2.88b in the prior year. Cost-cutting measures, which the company started implementing in 2012, saved R300 million, management says. 

While most of the company’s current problems are attributed to the Fukushima nuclear disaster, Rossing has also been experiencing a “drop in ore grades, expensive to mine”.

Output of the metal at Rossing, known in mining circles as the “grand old lady of uranium mining” owing to it having been in operation since 1977, has gradually declined since 2009 from 4 200 tonnes to 2 409 tonnes last year.

“The decline in output has been due to the low ore grade areas where we are mining,” Duvenhage said.

Once a review of its operations is concluded and with foreseeable improvement in the prices of the metal, Rossing might consider exploiting its Z20 deposit, an ore body situated south wards of the existing main pit.

“The objective for 2014 is to establish the development pathway for the economic extraction of ore from Z20.

“Our vision is to establish a new mining and overland conveyor for processing through a modified plant at the mine. We are discussing this major investment with potential funding partners,” Rossing said in its 2013 annual report.

June 2014
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