Rössing Uranium has awarded a N$12.8-billion mining contract to Chinese contractor Beifang Mining Services to take over responsibility of the operations.
The mining contract agreement–-spanning a duration of 13 years–-will allow the company to secure the necessary resources and expertise to sustain and enhance Rössing Uranium’s mining operations.
Johan Coetzee, the Managing Director of Rössing Uranium Limited, said the decision to enter into the agreement was driven by the financial constraints faced by the company in funding a N$1.4 billion fleet upgrade investment required to continue operations.
The fleet upgrade would be required after the mining operations reached a 410-metre-deep pit with an additional optional 600-metre-deep pit being the deepest the company could go due to its aging fleet.
The partnership with Beifang Namibia, will allow Rössing Uranium to commence Phase 4 of operations, which will be fully operational in 2027, with operations carried out by Beifang.
“As part of our operating model derived from our thorough study, we recognised the aging nature of our current fleet during our mine visit. These machines have been in operation for many years, and while we aim to sustain their use until 2026, we are confronted with the need to make a substantial investment of approximately N$1.4 billion for a new fleet or seek external fleet solutions,” Coetzee said.
Coetzee said the fleet investment requirement would have come after the uranium miner had made a substantial investment into a water plant upgrade, and this poised a considerable financial burden on the company.
“Consequently, to evaluate the best course of action, the company explored multiple options to continue operations. We obtained quotations from equipment suppliers to assess the cost of purchasing our own fleet. Simultaneously, we approached various mining contractors in the market, sharing our mine plan and requesting cost estimates for their services,” the Rössing MD said.
According to Coetzee, around 20 mining contractors had expressed interest in the mining contract.
“After a meticulous evaluation process spanning approximately one year, Rössing Uranium Limited narrowed down the selection to three preferred contractors. Ultimately, Beifang Namibia mining contractors, a Chinese-owned company, emerged as the chosen partner. The contract spans 13 years, commencing in 2024 and continuing until the end of 2036. The total value of the agreement is N$12.8 billion over the 13-year period,” he said.
“This collaboration with Beifang Namibia marks a pivotal moment for Rössing Uranium Limited as it secures the necessary resources and expertise to sustain and enhance its mining operations. The long-term agreement is expected to foster continued growth and prosperity for both parties involved.”
The sub-contracting of mining operations will however see the uranium miner retrenching around 400 employees.
“This comes with a downfall as the company is set to let go all mining personnel, as a result, Rössing Uranium Limited has introduced a comprehensive workforce transition plan, offering attractive separation packages and employment support to its around 400 mining personnel,” he said.
According to Coetzee, employees were offered “a very lucrative separation package” with a three-and-a-half-year timeframe to find alternative jobs.
Coetzee highlighted that employees who secure employment elsewhere will still receive the promised separation package and emphasised the company’s commitment to facilitating a smooth transition, stating, “Our ultimate goal is to reach the end of 2026 without any of our valued employees remaining unemployed.”
He further added that there is a high possibility for workers to be employed by Beifang as they are currently conducting the process.
This comes as Rössing Uranium in May announced a life-of-mine extension for Namibia’s longest-running uranium mine by ten years, from 2026 to 2036, following the completion of their bankable feasibility study.
The mine has been in operation since 1976 and has been mining on phase 2 and phase 3 pits, which will be completed in 2026.
