OUR VALUE ADDITION AND
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 adds value

Our value-added statement (See Our value addition graph below) 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 prevailing market conditions and the challenges posed by COVID-19 during 2021, Rössing’s total spend for goods and services for our operations was N$3.01 billion (2020: N$2.77 billion).

As during the previous reporting years, most of the procurement expenditure was on Namibian-registered suppliers.

We make a significant annual contribution to the economy of Namibia.

 

Most of the procurement expenditure was on Namibian-registered suppliers.

The continued increase in local spend reflects on the company’s confidence to procure locally.

Rössing’s spend with local suppliers amounted to N$2.25 billion (2020: N$2.17 billion), accounting for 75 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$426 million was spent with South African suppliers, representing 14 per cent of our procurement expenditure, while we spent N$337 million with international suppliers, representing 11 per cent of our total expenditure.

Rössing remains committed to support local suppliers, including spend on developing SMEs. The bulk of the Namibian spend remains in the Erongo Region (36 per cent) and Khomas Region (50 per cent). Spend within the northern regions remains high due to the current supply of sulphuric acid agreement with Dundee Precious Metals in Tsumeb.

During 2021, we invested about N$14 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$111 million in royalty tax, and N$167 million in pay-as-you-earn tax on behalf of employees. No corporate tax or dividends were paid in 2021.

Payments to public enterprises, such as NamWater and NamPower, amounted to N$464.2 million (2020: N$436.2 million), which includes the Vocational and Education Training levy of N$8.0 million paid to the Namibia Training Authority. We also spent N$764 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, which we also report on a quarterly basis to the Namibia Competition Commission.

Of our Namibian spend, 62 per cent (2020: 43 per cent) came from suppliers that confirmed majority Namibian ownership, while 90 per cent (2020: 71 per cent) of the total Namibian spend came from suppliers that employ 75 per cent or more Namibians in their workforce.

In the category where below N$250,000 was spend, N$464 million was made in Namibia, of which 74 per cent (2020: 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.

During the reporting year, we purchased N$86 million worth of goods and services from previously disadvantaged Namibians and local small- and medium-sized enterprises.

 

Our value addition

 

Summary of Rössing’s value addition

Rössing’s activities in Namibia lead to a long chain of value addition throughout the country. 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 2017 to 2021.