Product Stewardship

• Marketing
• Procurement

PRODUCT STEWARDSHIP

Procurement

The demand for some major consumables stands out as a challenge during the year because they threatened the growth of the operation.

Sulphuric acid, in particular, was a problem in terms of availability and the resultant increase in costs to Rössing: costs increased by up to ten times between the beginning and end of the year, and supply to other southern African operations (outside Rio Tinto) was cut due to a shortage in the market. This issue was overcome by strong relationships with key suppliers and aggressive purchasing to secure 2008 supply.

Within Namibia, rail had been a bottleneck in the supply chain over a number of years; pleasingly, this also improved with additional rail trucks being made available during 2007.

Of particular note in the Procurement function is the fact that a Preferential Procurement Policy has been drafted and will be implemented during the early part of 2008 to ensure Rössing takes maximum advantage of opportunities to buy locally and from businesses that benefit historically disadvantaged Namibians.

Work focusing on critical supply risks to the business will continue, as will ensuring the mine has sustainable solutions in place for all critical items.

In line with The way we buy – the Rio Tinto statement on procurement practices, Rössing has again significantly made purchases with Namibian suppliers. In 2007, nearly N$1.6 billion was spent in Namibia.

“The strong global demand for industrial items and parts impacted Rössing and, as a result, more effort went into assessments of critical risk items and putting sustainable
strategies in place to ensure continuity
of supply. Local supplier development is a critical part of supply strategies and will remain a focus.”

MARK PICKETT
Manager: Procurement

“I would like to state that Namibia is not an island somewhere: it’s a country that is part of the international community, specifically in relation to the mining sector. We are not a small fish – we are almost a giant. Uranium mining has been here for quite a long time, mostly by Rössing Uranium, being joined by Langer Heinrich in 2005. But the interest in uranium is going to be a boost to Namibia. Firstly, as a uranium producer, there will be an increased market for our product. Namibia will be able to contribute towards resolving the global energy shortage. I understand that the environmentalists of the 1970s and 1980s are today increasingly willing to subscribe to the idea of utilising uranium for energy. The demand for uranium in the world is really going to keep our industry moving. Then Rössing Uranium will have additional counterparts in the business, and that may make it possible for Namibia to secure the No. 3 or 4 position in the world as a uranium producing country.”

JOSEPH IITA
Permanent Secretary Ministry of Mines and Energy