Rossing Uranium revenue down

WINDHOEK: Rossing Uranium’s revenue decreased by 19 per cent in 2014, due to significantly lower market prices and sales volumes.

This led to a net loss after tax of N.dollars 91 million compared to a net profit after tax of N.dollars 32 million from normal operations in 2013.

Managing Director Werner Duvenhage revealed this Monday during a media conference in Windhoek.

Unfortunately, he said that with low ore grades and recovery challenges, the drummed target was not reached, while various efforts are ongoing to improve the recovery rates.

“In 2014, we drummed 1 543 tonnes of uranium oxide compared to 2 409 tonnes recorded the previous reporting year,” he said.

Duvenhage described 2014 as a tough year because the uranium price continued to decline globally, putting substantial pressure on the business.

The average uranium spot market price was as a result placed at US$ 33 per pound (lbs), approximately N.dollars 333 per lbs, which is lower than the US$ 38/lbs, N.dollars 418/lbs, average of 2013.

He said the 2011 tsunami in Japan and its impact on the Fukushima Daiichi Nuclear Power Plant still continued to plague the global uranium market in 2014, with excess supply causing a decline in prices. Nuclear plants in Japan remained off-line for most of the year.

About 30 per cent of the Rio Tinto subsidiary’s uranium ore is sold to North America, 29 per cent to Europe, Middle East and Africa, 28 per cent to Asia and 13 per cent to Japan, which before the tsunami consumed 50 per cent of the uranium from Namibia.

“Supply has increased over the past three years since the Fukushima incident. This is a recipe for continued weak prices in the near term. Utilities are holding large stocks in all forms, which defers their need for one to three years on average,” Duvenhage said.

The company mined a total of 23 million tonnes of rock from the open pit during 2014, compared to 36 million tonnes the previous year.

“Unfortunately, the uranium price declined further during the first half of the year, leading to a management and board decision to curtail production and meet only contractual commitments, with the resulting curtailment production plan effective from August 2014,” he said.

Tonnes were reduced to match the production capacity of the plant, in line with the phased start-up process after the leach tank failure in December 2013 and to accommodate a planned four-week maintenance shutdown to the processing plant in June 2014.