Rössing cuts 276 jobsBy: ADAM HARTMAN
RÖSSING will lay off 276 workers by next month, the uranium mine’s managing director, Chris Salisbury, announced on Friday.
He blamed the cutbacks on a persistent slump in the global uranium price and demand, and an operational loss of N$474 million last year.
Since the 2011 Japanese tsunami destroyed the Fukushima nuclear reactor, 48 of Japan’s 50 reactors have been mothballed. This is a major contributor to the lower uranium demand and has resulted in the uranium price dropping by more than 36%.
The layoffs will only affect employees of Rio Tinto Rössing Uranium. It is unclear how the cutbacks will affect the roughly 700 contract workers employed by various companies at the mine. Salisbury said the 276 redundant jobs consist of 21 management posts, 25 professional, 28 supervisory and 202 operational and maintenance posts. Rössing provides around 1 500 direct jobs.
He said the changes have already been communicated to all employees and their union representatives.
“Every effort will be made to minimise the impact of the proposals on job losses,” he said.
These efforts include a freeze of non-essential employment. In fact, said Salisbury, about 150 workers had left the mine’s employment for various reasons since 2011 and their positions were not filled.
Ismael Kasuto, branch chairman of the Mineworkers Union of Namibia (MUN), told The Namibian that the cost-cutting process “had been on for some time”.
“As anticipated, we have regrettably reached the restructuring phase. Both parties will engage in a collaborative sessions in an attempt to minimise the impact on the affected employees within the bargaining unit. It is a difficult and a sensitive time for all of us. It is our desire that all affected parties will work closely together to make economical and politically effective decisions for the future of the organisation as tough as it is,” he said.
The Namibian understands that meetings between the various parties will start today.
Arandis chief executive officer Florida Husselmann said it is difficult to tell at this stage how the retrenchments will affect the town’s economy because “we first have to know how many of those affected live here”.
“Fortunately our economy does not depend on Rössing as before, however if many of the affected come from Arandis, we may feel it,” she said.
Husselmann is confident that other mines in the region may be able to create posts for the laid-off workers.
The chairman of the Swakopmund branch of the Namibia Chamber of Commerce and Industry, Harry //Hoabeb, who worked for Rössing for 27 years before going into private business, said it was “very bad news”, not just for the workers and the company, but also for Swakopmund and the Erongo Region.
“You need to understand that it’s not just the workers losing their jobs. These workers have families. Children need to go to school and spouses who have work. All have some sort of spending power in the local economy. It’s difficult times for everyone,” he said.
The current price of uranium is fixed at about US$44 a pound – about US$26 short of a viable US$70 a pound as was the norm prior to the Fukushima disaster.
“With the utility sector in Japan essentially shut down, there is little prospect of a turnaround in the near term,” said Salisbury.
Last year Rössing incurred its second consecutive major operational loss of N$474 million. In 2011 the company suffered a loss of N$465 million.
“This all is despite a 26% rise in production of 2 699 tons and a 31% cut in unit costs through a programme of cost reduction, improved productivity, reduced contractor spend and improved ore grade,” said Salisbury.
He said despite the ongoing global situation the company had resisted the need to cut jobs at the mine “for as long as possible, but regrettably there is now no alternative”.
“The flat outlook for price and increasing input prices, with regard to electricity and water in particular, now mean that the company must reluctantly look to further reduce costs by decreasing the number of roles in the company,” he said.
The company said would will take into consideration future retirement dates, while the redundancy processes (voluntary where possible), would include a redundancy package in excess of prescribed requirements, as well as support for those leaving the company.
“The management team will also work with other mining companies to explore potential employment options,” he said.