Rössing sale approved

The sale of the Rössing uranium mine to the China National Uranium Corporation has been approved, with stringent conditions.

28 June 2019 | Business

The Namibia Competition Commission (NaCC) has approved the sale of Rössing Uranium Limited to the China National Uranium Corporation (CNUC), with stringent conditions.

NaCC spokesperson Dina Gowases announced this yesterday. While it was found by the commission that the transaction would not result in any unfair competition, the NaCC felt the procurement of local goods by the CNUC and job security for locals was a notable concern.

To safeguard employment and local procurement, the commission imposed certain conditions, Gowases said. “There shall be no merger-specific retrenchments of employees of Rössing Uranium for a period of two years. Rössing shall maintain a ratio of at least 95% local employees to foreign employees until the expiry of the lifespan of the mine,” she said. As far as procurement was concerned, the commission said Rössing was to abide by its 2013 procurement policy. “Rössing shall not implement any changes to its 30 July 2013 procurement policy, which will have the effect of providing for less favourable terms to local suppliers, until the expiry of the lifespan of the mine,” Gowases said. Under the framework, for purchases below N$250 000, Rössing is expected to procure a minimum of 80% of any such goods, services or products from companies that are majority Namibian-owned and registered. And at least 75% of its staff complement must be Namibian.

Rössing's total expenditure on procurement in 2018 equated to N$2.4 billion, of which N$1.4 billion was spent on locally procured goods and services. In addition, Rössing is not allowed to employ any non-Namibian at management level on any basis, other than on a two-year fixed-term contract, she said. Rio Tinto entered an agreement to sell its 69% shareholding of the loss-making Rössing uranium mine to the CNUC in November 2018 for a reported N$1.5 billion. The sale will underpin the continuation of operations at the Rössing mine, especially in a low uranium price environment, mine managing director Richard Storrie said. Rio Tinto owns 69% of the Rössing mine, while the Namibian government holds a 3% stake and it has the majority (51%) when it comes to voting rights. The Iranian Foreign Investment Company is a passive legacy investor in Rössing Uranium, holding a 15% stake that goes back to the early 1970s, during the financing of the mine. The Industrial Development Corporation of South Africa owns 10%, while local individual shareholders own a combined 3% shareholding. The mine has enjoyed the title of being the largest open-cast mine in the world and has been in operation for over 40 years.

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