Rössing Uranium’s plans to build a N$200 million desalination plant at the coast has hit another snag after the Rio Tinto-owned business announced this week that Government has been dragging its feet in issuing the miner with the required water permits.
Rössing Uranium Managing Director, Werner Duvenhage, said Monday that they had not received any feedback since September when they applied to the Department of Water Affairs and Forestry.
In June 2016, the uranium miner received an environmental clearance certificate for the construction of its own desalination plant at Mile 4 close to Swakopmund, after its initial application was blocked by the Ministry of Agriculture, Water Affairs and Forestry.
The environmental clearance certificate was issued after the miner had taken Government to court.
Reports at the time suggested that the agriculture ministry felt that it should be the only supplier of bulk water in Namibia through its water parastatal, NamWater, and that no other agency should be permitted to supply water, either to itself or to others, unless permitted to do so under special conditions.
“One would have expected them to have responded regarding the desalination plant, but we will just wait for their due processes to be followed, as we do not know where we stand now regarding that,” Duvenhage said this week.
“The current cost of water is high and the mine remains open to implementing alternative measures to reduce the cost of desalinated water.
“As I have said before, Rössing does not intend to own the plant as that is not our core business, but we would love it if Government would intervene and do what is necessary to make it cheaper.
“The key thing for us is the current water prices that are too high and unsustainable. So, the plant will be for us and other stakeholders as well.”
The Ministry of Agriculture, Water Affairs and Forestry did not respond to questions sent by the time of going to print.
On how Rössing would fund the construction of the proposed desalination plant, Duvenhage said they are still preoccupied with resolving the regulatory approvals and reviewing the financial models.
“Subsequent to the successful completion of these processes, we will consider funding options,” he said.
Duvenhage further said Rössing, as a large water user, takes water conservation measures very seriously.
He said since 1980, the company has been recycling 60 to 70 percent of its water, which was indicative of an effective water management strategy.
“Every year, as part of our continuous improvement focus, we set demanding goals for ourselves for the efficient use of water. Our operating plan of 2016 set a target for fresh water use of 2,9 million cubic metres (m³) supplied by NamWater.
“The actual consumption of fresh water came to 2,1 million m³ only in 2016,” he said.
Never say never
Meanwhile, Duvenhage has revealed that the uranium miner may consider retrenchments if the company continues to find challenges in its operations due to the depressed commodity prices prevailing worldwide.
“We are not planning any retrenchments at the moment, but like I have always said before, we can never say never. It all depends on the market.
“For now, we have just met our targets and we are still okay. But if the going gets tough these are some of the measures we would deploy,” he said.
The uranium miner realised a net profit from normal operations of N$107 million compared to a N$385 million net loss in prior year.
Turnover in 2016 was N$3 billion, up from N$1,8 billion in 2015, while the company paid the Government N$80,4 million in royalty tax, N$50,8 million in dividends and N$107,2 million in pay-as-you-earn tax on behalf of employees.
Rössing mined a total of 24,4 million tonnes of rock, of which 8,0 million tonnes were uranium-bearing ore from the open pit and 16,5 million tonnes were waste rock.
This resulted in increased mill throughput and a 48 percent rise in production from 1,245 tonnes of uranium oxide produced in 2015 to 1,850 tonnes in 2016.