London, England — 22 November 2012 – Rössing Uranium is high on the agenda of sites that Rio Tinto energy chief executive Harry Kenyon-Slaney wants to visit early next year in a bid to ensure that the company focuses on cost-cutting.
In a memorandum to the group’s energy managers, Kenyon-Slaney points out that each site “has its own particular challenges which can’t be properly understood until you’ve been on site,” reports all.Africa.com. A reduction in spending enjoys priority, his memorandum indicates.
According to Kenyon-Slaney, he recently presented the company’s energy 2013/14 business plan to the plan review committee of Rio Tinto.
“Our plan is all about productivity: how we will get more production for less cost. The 2013/14 plan also requires us to achieve best-ever rates and utilisation in our key mining processes. This must be our strong focus to ensure we remain a viable business.”
Kenyon-Slaney says coal and uranium prices are unlikely to improve much in the near future.
“While there has been some very good business improvement work in all of our energy business units in the past 12 to 24 months, we cannot rest on this work.”
He singled out Namibia when he added that it was important to cut spending. “We need to reverse the very large cost increase that we’ve seen during the resources boom over the last five years. This issue is most pressing in Australia but also applies to Mozambique and Namibia.”
Seeing that Rio Tinto’s commodity prices have dropped, the company needs to sharpen its focus on reducing operational expenditure.
Kenyon-Slaney said he had asked energy chief financial officer Matt Halliday, “to lead a programme of work to drastically reduce our operational spend rate over the next three months”.
Again, he singled out Rössing as one of the sites where this would be implemented. “This will be a structured programme in order to meet what is an aggressive timeframe.”
At the end of June, Rio Tinto group chief executive Tom Albanese dropped a bombshell when he announced that employee costs across the group would be slashed by 10%, including Rössing.
Then, Rössing spokesperson Jerome Mutumba said it was too early to say exactly what would happen at the mine.
Asked whether there would 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.”
Source: allAfrica.com For more information, click here.