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Rösssing posts modest profit, turns loss-making streak around

Rösssing posts modest profit, turns loss-making streak around

Rössing Uranium Limited posted a N$107 million profit for 2016 following a staggering N$385 million loss in 2015, although it has much more to do with accounting than with mining uranium.

On Monday this week, Rössing Uranium Ltd released its Stakeholder Report, providing a detailed report of its financial performance, mining prospects and corporate social involvement.

In 2015 Rösing posted an operational profit of just over N$290 million on mining revenues of N$1.8 billion. Total comprehensive income for 2015 came to almost N$228 million. This, however, was offset by a massive distribution of N$823.7 million to Kalahari and Extract which eventually put the uranium miner in the red with a loss of almost N$385 million.

A 48% surge in output from 1245 tonnes of uranium oxide in 2015 to 1850 tonnes in 2016, led to a substantial increae in revenue to just over N$3 billion. Despite the stellar growth in production, the mine still posted a comprehensive loss of just over N$94 million. However, contrary to 2015, a substantial reimbursement from Kalahari and Extract of N$257.7 million put the mine solidly in the black, creating a profit of N$163.4 million. This initial profit was diluted by a N$56 million provision for the mine’s defined benefit pension fund following an actuarial review, leaving the profit of N$107 million as reflected in the company’s financial statements.

Notwithstanding a substantial drop in the price of uranium, Rössing Uranium Ltd remains a formidable player in the Namibian economy. Managing Director, Werner Duvenhage said Rössing paid the government N$80.4 million in royalty tax, N$50.8 million in dividends and N$107 million in employee tax.

“Despite the current financial strain under which we operate, we invested N$15.4 million in our neighbouring communities during 2016, either directly or through the Rössing Foundation” he added.

In addition, Rössing paid almost N$400 million to NamPower and NamWater for utilities, and N$5.6 million to the National Training Authority for the VET levy. On top of this, the mine disbursed more than N$506 million to its employees as salaries and wages.

According to current planning, the mine will reach its end of life in 2025, still Duvenhage, in his closing message stated “In 2016 we celebrated a milestone 40 years of production. If we can achieve and exceed our targets over the next couple of years, there is no reason why we can’t look forward to another successful 40 years.”

According to Duvenhage, Rössing is not doing any further exploration at this stage.

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