OUR VALUE ADDITION AND SUMMARY ANNUAL FINANCIAL STATEMENTS

The motivation to do value-added reporting is linked to the overall process of disclosure regarding financial information. By sharing information about the value Rössing adds through its operations and business activities, the mine aims to bring into focus all aspects of the impact the company makes on the economy of the region in which it operates, as well as on Namibia’s economy as a whole.

HOW RÖSSING URANIUM ADDS VALUE

Our value-added statement (above) 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 the investments made in Namibian communities.

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 stakeholders.

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. Rössing Uranium gives rise to a significant ‘multiplier effect’ — the phenomenon whereby 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.

Despite the global economic challenges posed by COVID-19, Rössing’s total spend for goods and services for our operations was N$2.77 billion during 2020 (2019: N$2.72 billion).

As during the previous reporting years, most of the procurement expenditure was on Namibian-registered suppliers. Rössing’s spend with local suppliers amounted to N$2.17 billion (2019: N$2.03 billion), accounting for 78 per cent of our total procurement expenditure.

The continued increase in local spend reflects on the company’s confidence to procure locally, also resulting in the securing of new long-term supply agreements of goods and services with some of our major suppliers, such as Dundee Precious Metals Tsumeb and Namport.

N$370 million was spent with South African suppliers, representing 14 per cent of our procurement expenditure, while we spent N$227 million with international suppliers, representing 8 per cent of our total expenditure.

Bonita Guriras (Senior Embroider), an employee at Safewear, one of the mine’s suppliers, doing embroidery on a pair of Rössing corporate wear pants.

Rössing remains committed to support local suppliers, including spend on developing SMEs. The bulk of the Namibian spend remains in the Erongo Region (38 per cent) and Khomas Region (50 per cent). Spend within the Erongo Region reduced significantly due to COVID-19 and the lockdown measures imposed on the region, which negatively impacted suppliers’ operations.

During 2020, we invested N$25.8 million in Namibian communities, directly as well as 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 Government N$128.6 million in royalty tax, and N$161 million in pay-as-you-earn tax on behalf of employees. No corporate tax or dividends were paid in 2020.

Payments to public enterprises, such as NamWater and NamPower, amounted to N$446.5 million (2019: N$450.1 million), which includes the Vocational and Education Training levy of N$7.3. million paid to the Namibia Training Authority. We also spent N643.9 million in net salaries and wages.

PREFERENTIAL PROCUREMENT AND ENTERPRISE DEVELOPMENT

We remain committed to supporting Government development initiatives and the New Equitable Economic Empowerment policy framework (NEEEF) through preferential procurement. As such, we support local suppliers and significantly enhanced our data regarding supplier ownership and employment statistics during 2020 in compliance with the directives imposed by the Namibia Competition Commission.

During the reporting year, we spent N$2.77 billion on procurement, of which N$2.17 billion was with Namibian registered businesses. Of our Namibian spend, 43 per cent came from suppliers that confirmed majority Namibian ownership, while 71 per cent of the total Namibian spend came from suppliers that employ 75 per cent or more Namibians in their workforce.

In the below N$250,000-spend category, N$481 million (80 per cent of the total spend in this category) was local, of which 71 per cent came from suppliers with majority Namibian ownership. A total of 89 per cent were from suppliers that employ 75 per cent or more Namibians in their workforce.

 

Our value addition

 

SUMMARY OF RÖSSING URANIUM’S VALUE ADDITION

As a major player in the procurement of goods and services, Rössing makes a significant contribution to economic development and the creation of prosperity for communities. Our business provides a strong base for economic growth in communities located 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 for goods and services, both locally and nationally. The graphs below highlight some of the key socioeconomic contributions we have made to Namibia over the last five years, from 2016 to 2020.