Our value addition

As a major employer and purchaser of goods and services, Rössing Uranium makes a significant contribution to the economic sustainability of communities and the creation of prosperity in the Erongo Region and the rest of the country.

 

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 Uranium 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 operate, as well as on the country's economy as a whole.

Our value-added statement 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.

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 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 current financial strain under which we operate, Rössing’s total expenditure for goods and services for our operations was N$2.3 billion during 2017.

As was the case during the previous reporting year, most of the N$2.3 billion procurement expenditure was with Namibian-registered suppliers, amounting to N$1.7 billion, accounting for 73.5 per cent of our total procurement expenditure. The primary local procurement expenditure was the procurement of sulphuric acid from Tsumeb-based Dundee Precious Metals.

We spent N$331 million of total procurement with South African suppliers, representing 14.5 per cent of our procurement expenditure, while we spent N$274 million with international suppliers, representing 11.9 per cent of our total expenditure.

Rössing Uranium remains committed to supporting local suppliers with the main focus on developing SMEs. The bulk of what we spend in Namibian remains in the Erongo (42 per cent) and Khomas (46 per cent) regions.

We invested N$12.5 million in Namibian communities during 2017, either directly or through the Rössing Foundation.

The review period also saw us continue to demonstrate our value to Namibia through contributions to the fscal authorities. Rössing Uranium paid the Government N$77.8 million in royalty tax, and N$118.3 million in pay-as-you-earn tax on behalf of employees. No corporate tax or dividends were paid in 2017 due to the company's position of having incurred a tax loss.

Payments to public enterprises, such as NamWater and NamPower, amounted to N$425.0 million, which includes the Vocational and Education Training Levy of N$6.4 million paid to the Namibia Training Authority. We also spent N$693.3 million in net salaries and wages.

Preferential procurement and enterprise development

With the aim of securing economic growth, prosperity and the human dignity of all Namibians, the Government of Namibia developed the Harambee Prosperity Plan and the national, broad-based New Equitable Economic Empowerment Framework (NEEEF).

We remain committed to support Government development initiatives and policy frameworks. As such, we support 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.

During the reporting period, we purchased N$90 million worth of goods and services from previously disadvantaged Namibians (SMEs).

Summary of Rössing Uranium’s value addition

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 past five years, 2013 to 2017.

The mine’s educational assistance scheme for employee dependants at tertiary education level supported 34 dependants at a total investment of nearly N$0.5 million. A total of 30 trade apprentices completed their job attachments as part of their tertiary education curriculum, exposing them to on-the-job learning opportunities within their various disciplines. Further opportunities to support trade apprentices will continue during 2018.

Vocational Education and Training Levy
Rössing Uranium has participated in the Namibia Training Authority's Vocational Education and Training (VET) Levy submission since its inception. Through its contribution, the mine has contributed N$6.4 million during the 2017 training-levy cycle.

Technical training
Technical training remains pivotal to ensure that the knowledge, skills and attributes of our workforce are enhanced. In 2017 various training interventions to drive effciency and effectiveness were conducted to ensure that skills are imparted at the right levels. Shovel effciency was identifed as an area where practical on-the-job training for operators and maintainers was required.