Rossing retrenchments finalised this month
The retrenchment exercise currently underway at the country’s oldest uranium mine, Rossing Uranium, will be finalised by the end of May, the Economist has established.
Penda Kiiyala, the General Manager for External Relations and Communities at Rossing Uranium said the retrenchment exercise, which was announced early March, will soon be finalised as a number of people have exercised the option of a voluntary exit package.
Kiiyala said: “We expect that approximately 276 people will leave Rössing’s employment as part of the organisational restructuring exercise which will be essentially complete by the end of May 2013. We are not disclosing the exact numbers of voluntary vs. compulsory retrenchments. However, we are pleased to inform you that we have been able to achieve the majority of changes through a voluntary process.”
The restructuring exercise was effected after the Rio Tinto owned mine announced a second successive operational loss of N$474 million during the financial year ended 31 December 2012. Although Rossing Uranium said it has a mixture of long-term and short-term contracts as sales contracts, the company maintained that the low uranium spot prices prevailing in the post Fukishima period were affecting margins.
“Rössing’s sales contracts are a mixture of long-term and short-term contracts. There is continual renewal of the sales portfolio. However, the downward trend of prices is having a negative effect on our profitability and cash flow. This is being countered by a comprehensive business improvement and cost improvement programmes,” said Kiiyala.
He added that the restructuring exercise has affected workers from all departments in the company with the former Manager of External Affairs, Jerome Mutumba, whose position has been made redundant, one of the high profile employees affected by the restructuring exercise.
The Mineworkers Union of Namibia (MUN)’s branch representative at Rössing Uranium, Ismael Kasuto could not shed more details on how the retrenchment exercise was progressing. He said he cannot comment at this stage as the process was sensitive.
“One would be very cautious not to make decisions that could aggravate the implications to both the employees and the employer going forward. You may call the employer to give their input if they opt to,” Kasuto said.
Rossing could not reveal how much the restructuring exercise is costing the company, but said funding for the exercise was being done through its operational cash flow. However, the Economist understands that the affected workers will receive what has been described by the Mine Workers Union, as the best package deal so far in the country’s history.
Affected workers will receive twenty one days basic salary for the number of years that they were employed at Rossing, three months salary for the notice period and two months basic salary as relocation costs. Employees staying in company houses will continue to stay there for the next six months or if they prefer, will be paid a six month housing allowance based on current arrangements. Rossing will also continue to pay the medical aid for the affected employees for a period of four months, among other benefits.