Rössing moving forward after ‘challenging year’
19 July 2021 | Business
Rössing Uranium on Friday released its 2020 report to stakeholders under the theme ‘Moving Forward to the New Era’.
“The report is a valuable source of information about Rössing Uranium’s activities. We believe in open communication and this report outlines how we performed in 2020. The report offers locally relevant information about our business and other aspects raised during the year,” Johan Coetzee, the mine’s managing director, said.
The uranium giant has been a feature of the Namibian economy for close to 45 years and is well versed in the nation’s mining business, making significant contributions to the development of the country.
“With the current challenges, we are confident that Rössing will continue to be a major supplier of energy to the world, as well as delivering value to our shareholders and other stakeholders,” he said.
Coetzee added that 2021 is an exciting year.
“Capital investment made in 2020 will support us in running a safer and more efficient operation. We will continue with the business integration process with CNUC, rolling out the purpose statement and integrated values of safety, coordination, responsibility and innovation.”
According to Coetzee, 2020 will go down in history as an unforgettable and challenging year due to the Covid-19 pandemic that impacted the whole world, although still delivering some positive milestones.
This includes Rössing producing 5.5 million pounds of Triuranium octoxide (U3O8) in 2020. A total of two million pounds were shipped to western converters and sold to customers in North America, Asia (excluding China), Europe, the Middle East and Africa.
A total of four million pounds, including some production from the 2019 year, was shipped to China and sold to China National Nuclear Corporation (CNNC). Rössing continued to benefit from the contractual sales prices in its historical contract portfolio, as well as the beneficial CNNC off-take agreement, with an average sales price across the entire portfolio well above the average spot price for the year.
Coetzee said the company went through many changes and still managed to achieve a lot under less-than-favourable operational circumstances in 2020.
Rössing mined a total of 19.4 million tonnes of rock (13% less than in 2019) of which 9.2 million tonnes was economic uranium-bearing ore (7% more than in 2019), and 10 million tonnes were waste and low-grade ore (including 0.2 million tonnes dumped in-pit).
Rössing produced 2 489 tonnes of uranium oxide in 2020, which is marginally higher compared with production in 2019 at 2 449 tonnes.
“Revenue was significantly higher than in 2019, which can be attributed to a 38% increase in sales volumes, combined with a significant deterioration in the USD/NAD exchange rate at the start of the Covid-19 global outbreak,” Coetzee said.
“The weaker exchange rate and mitigation steps, however, impacted cost efficiency. In addition, the extreme and sudden devaluation of the Namibia dollar resulted in significant exchange rate losses, both on prepayments for 2020 sales, as well as the foreign currency hedge derivative, which neutralised the exchange rate benefit from the revenue stream, ultimately resulting in a reduced net profit after tax from normal operations of N$443 million (in 2019, this stood at N$503 million),” Coetzee said.