Rössing workers face layoffs

RIO Tinto group chief executive Tom Albanese this week dropped a bombshell when he announced that employee costs across the group would be slashed by ten per cent, including at Swakopmund’s Rössing Uranium.

A large chunk of the group’s employees may lose their jobs within the next three months.In the letter which Albanese wrote to the group on Wednesday, he states that support and service costs have escalated by 30 per cent in recent years ‘and were due to increase even more this year unless we took immediate action’.He announced in February already that no new support and service staff may be appointed and travel and consultancy costs should be cut.Rössing Uranium spokesperson Jerome Mutumba yesterday said that it is too early to say exactly what will happen at Rössing. Asked whether there will be layoffs at the Arandis mine, he replied: ‘I cannot say that. Like others in the industry, Rio Tinto is facing the challenge of increasing costs. We are actively seeking ways to tackle this. ‘This includes a programme of reductions in service and support costs across the global organisation, which have been rising sharply in recent times. We cannot do this effectively without reducing employee costs’.Rössing’s total workforce is 1 637 and a 10 per cent reduction in the workforce translates into about 160 jobs. He said the company understands that this is a difficult time for employees and will do all it can to keep them informed of developments.Mutumba added that the recent appointment of former Road Fund Administration (RFA) boss Penda Kiiyala is not necessarily in contravention of Albanese’s order not to make new support staff appointments.Kiiyala is expected to start as the mine’s general manager: external affairs on July I.Chris Salisbury, Rössing managing director, said at the end of May that the move to create the position stems from ‘an ever-changing and challenging external environment’.In an employee brief, Salisbury said: ‘Over the last 12 months, we have seen major Government policy shifts and developments affecting the mining sector, and there continues to be significant policy changes announced and implementation details worked through.’Rössing Uranium has been in murky financial waters during the last financial year.The company recently said its key priorities for 2012 will be to provide a consistent and well-blended feed to its processing plant and reduce its mining costs in 2012. The mine’s operating costs last year rose by 24 per cent from 2010 to N$3,8 billion, while it only generated N$3,3 billion from uranium oxide sales.Rössing suffered a net loss of N$471,3 million for 2011, ballooning from its net loss of N$43 million the previous year. The mine intends to return to profitability by 2014.