Our value addition
We add value in neighbouring communities by creating a significant 'multiplier effect' where the spending by the mine creates income for the community and further spending by others, such as in the town of Arandis some 12 km from the mine.
Our Value Added Statement (see bottom of this page) reflects the wealth created through the sale of our uranium oxide production, payments for services to suppliers, taxes to the Namibian Government, payments to employees, and investments made in neighbouring communities.
How Rössing Uranium adds value
Sustainable development is underpinned by sustainable economies. Our continuing operations are based on our ability to secure access to land, people and capital.
We use our economic, social, environmental and technical expertise to harness these resources and create prosperity for our shareholders, employees and communities, as well as for the Namibian Government and our business partners.
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.
During the reporting year the uranium price continued to be under pressure. The significantly lower uranium price - combined with a much lower uranium oxide production of 1,245 tonnes in 2015 compared with 1,543 tonnes in 2014 - resulted in our revenue decreasing from N$2.4 billion in 2014 to N$1.8 billion in 2015.
For the second year, we realised a net loss from normal operations: in 2015, N$385 million and in 2014 N$91 million.
Despite the current financial strain under which we operate, we invested N$18 million in our neighbouring communities during 2015, either directly or through the Rössing Foundation.
The review period also saw us continue to demonstrate our value to Namibia through contributions to the fiscal authorities. Rössing Uranium paid the Receiver of Revenue N$54 million in royalty tax, and N$88 million in pay-as-you-earn tax on behalf of employees. Payments to stateowned enterprises such as NamWater and NamPower amounted to N$314 million, which includes the training levy paid to the National Training Authority of N$5 million. We also spent N$453 million in net salaries and wages.
The graphs on below summarise the highlights of various value additions Rössing Uranium has made since 2011. Cash flows to the various stakeholders are set out in our Value Added Statement at the bottom of this page.
Our procurement spend
Rössing Uranium gives rise to a significant 'multiplier effect' - the phenomenon where spending by one company creates income for and further spending by others.
Given the prevailing market conditions, our primary focus was to procure goods and services as cost-effectively and efficiently as possible and to focus on maximising our contribution to the local economy.
In 2015, we spent N$1.78 billion on goods and services for our operations. As during the previous reporting year, most of the procurement expenditure was on Namibian-registered suppliers, amounting to N$1.29 billion, accounting for 73 per cent of our total procurement expenditure.
N$222 million was spent with South African suppliers, representing 12 per cent of our procurement expenditure, while we spent N$263 million with international suppliers, representing 15 per cent of our total expenditure.
The bulk of the Namibian spend remains in the Erongo (48 per cent) and Khomas (52 per cent) regions.
We remain committed to supporting local suppliers with the main focus on developing small- and medium enterprises, equipping them with the necessary skills and knowledge to compete with international suppliers. Our activities in Namibia lead to a long chain of value addition throughout the economy and we have a significant impact on supporting local suppliers. Through commercial agreements with international or foreign-owned enterprises, the Procurement department aims to enforce local support through skills transfer and local employment in the coming year.
On 2016, our local spend is expected to increase, mainly due to the procuring of sulphuric acid from Dundee Precious Metals, based in Tsumeb.
Preferential procurement and enterprise development
Namibia's socioeconomic and political environment places significant value on the advancement of persons regarded as disadvantaged by past discriminatory laws or practices.
With the aim of securing economic growth, prosperity and the human dignity of all Namibians, the Government developed the national, broad-based New Equitable Economic Empowerment Framework (NEEEF).
NEEEF targets various private sector industries in order to ensure that socioeconomic benefits created through their local operations are distributed to those regarded as previously disadvantaged.
The framework is designed to be an incentive-driven set of policies to encourage businesses to take transformation seriously.
The Namibian Government established a commission to promote and administer the NEEEF. Companies are scored by the commission according to six 'pillars of empowerment'.
The mine's Community and Social Investment Steering Committee was established with an advisory and coordinating function to Rössing Uranium's Board of Directors and management, who are to ensure the implementation of its community and social responsibility intent in Namibia. The committee meets on a quarterly basis and provides monthly update reports and quarterly update papers to the board.
Summary of Rössing Uranium's value addition
Our business provides a strong base for economic growth in the communities around us, in the Erongo Region, and in Namibia as a whole. Our economic contribution comprises the value we add by paying wages, employee benefits and Government taxes and royalties, as well as by making dividend and interest payments and by retaining capital to invest in the growth of the mine.
In addition, we make significant payments to our suppliers of goods and services, both locally and nationally. The graphs shown below highlight some of the key socioeconomic contributions we have made to Namibia over the past five years, ie from 2011 to 2015.