The year under review was certainly challenging, especially in terms of our safety and production performances. However, Rössing is a resilient company that has encountered many challenges over the past 34 years, and we are well positioned to meet these head-on.
Our safety performance was on track in the first six months of 2011, but deteriorated in the second half of the year. Our AIFR achieved for the year was 0.81 overall, against a target of 0.74. The 2012 target is 0.65.
We are well advanced in our Life-of-Mine extension pre-strip programme
in the open pit, which aims at accessing higher-grade ore and improving
our production output by 2014. Thus, we remained focused both on
expanding our operations and on extending the mine's life beyond 2023.
We had serious challenges in every section of the production value
chain - from mining to metal drummed. The challenges included above-average seasonal rainfall at the beginning of the year; the closure of the
open pit's Trolley 10; lower ore grades, low Crushing Plant availability;
the planned two-week maintenance shut-down; and industrial action
during the second half of the year.
A major fit-for-purpose organisational structure redesign was completed
during 2011, streamlining our company to better address some of our
operational challenges head-on. We are confident that our team is
more than capable of leading the mine into the future.
We will continue to focus on our strengths, which are our people, our reputation and heritage, our resources and infrastructure, our growth options, and Rio Tinto's support. Together, we will face challenges and come out stronger.
While the tsunami in 2011 and its impact on the Fukushima nuclear
plant had an immediate negative effect on the uranium market, the
longer-term outlook for nuclear power remains positive. This is true not
only in China but also around the world, as climate change concerns
and energy security continue to be two of the most important drivers
of global energy planning. Uranium mining will still need to expand
significantly in the coming years to meet global energy demand.
We invested heavily in time and resources to improve our efficiency,
productivity and cost base to become a top-performing uranium
producer and to earn the right to secure financial support to execute
our growth plans. As part of our Sustainable Performance Acceleration
at Rössing (SPAR) initiative, three workshops were conducted to train
about 60 employees in the process that will bring sustainable business
improvement to the company.
Our poor production performance impacted on our financial performance.
Moving from a profit of N$1.23 billion in 2008 and N$290 million in
2009, we recorded losses in both of the past two reporting years. In
2010, our loss amounted to N$43 million, but increased substantially to
N$471 million in 2011. While we planned for a loss due to our expansion
programme, it was much more severe than expected. We expect to return
to profitability in 2014.
While industrial action during the second half of 2011 severely
impacted on our production, it had many positive spin-offs. To settle
the dispute, the company and the Mineworkers Union of Namibia (MUN)
signed a memorandum of understanding which aimed at starting a new
relationship. The agreement dealt with the central issues in dispute as
well as other matters that would benefit both parties.