Material operator, Kleophas Tjongarero, safely operating equipment in the mine’s Plant Store. 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.
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 operates, as well as on the country's economy as a whole.
Our value-added statement (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.
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$2.49 billion during 2018. As was the case during the previous reporting year, most of it was with Namibian-registered suppliers, amounting to N$1.9 billion, accounting for 78 per cent of our total procurement expenditure.
We spent N$305 million of total procurement with international suppliers, representing 12 per cent of our procurement expenditure, while we spent N$250 million with South African suppliers, representing 10 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 (44 per cent) and Khomas (45 per cent).
We invested N$13 million in Namibian communities during 2018, 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 Government N$87.5 million in royalty tax, and N$141.6 million in pay-as-you-earn tax on behalf of employees. No corporate tax or dividends were paid in 2018.
Payments to public enterprises, such as NamWater and NamPower, amounted to N$456.1 million, which includes the Vocational and Education Training levy of N$7.0 million paid to the Namibia Training Authority. We also spent N$591.9 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-sized enterprises, equipping them with the necessary skills and knowledge to compete with international suppliers.
During the reporting period, we purchased N$100 million worth of goods and services from previously disadvantaged Namibians and local small- and medium-sized enterprises.
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, 2014 to 2018.