Rössing Uranium swings to FY profit, despite low prices
JOHANNESBURG (miningweekly.com) – In what was a very tough year for the uranium mining industry, Rio Tinto subsidiary Rössing Uranium, which operates in Namibia, swung to a profit of N$107-million in 2016, from a loss of N$385-million in 2015.
In the company’s ‘Report to Shareholders 2016’, MD Werner Duvenhage said the year was “widely labelled the worst year of the past decade for the uranium industry”, with the spot price having dropped by 50% between January and November.
He noted that the spot price had, at one stage, hit a low of $20/lb, where the break-even cost for most uranium mines is estimated at between $40/lb and $50/lb.
Duvenhage said Rio Tinto’s marketing strategy of entering into long-term contracts with clients had played a role in minimising Rössing’s losses during 2016, while the 49% year-on-year increase in production to 1 850 t of uranium oxide had helped to offset the impact of lower prices on the company’s cash flow.
A favourable exchange rate had also positively impacted on net profit.
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