Basil Read Mining

Importantly, in arguably the worst conditions in the mining industry for decades, the division was able to maintain its base of expertise through careful management of human resources, thus avoiding any retrenchments. This is a decided competitive advantage in an industry so affected by the shortage of specialist skills. 

Although the division is protected to an extent in the prevailing economic climate by long-term contractual agreements, the cancellation of a major Debswana contract early in the reporting period required immediate action, both to replace lost income and preserve a long-standing relationship with this client. An amicable settlement was agreed and the division has successfully tendered for other contracts for Debswana. The cancelled contract was replaced by a two-year contract on a local magnetite mine which began in August 2009 and is valued at R180 million. 

Rössing Mine

During the year, work continued at the Rössing uranium mine in Namibia for owner Rio Tinto, one of the world’s largest mining houses. This is part of a contract extension awarded in the prior period, with significant progress made during the year. 

Following capital expenditure of around R130 million in the prior period, in support of the capital-intensive nature of this business, levels dropped to R12 million in the review period. Capital expenditure is expected to increase again in 2010, reflecting ongoing investment in new plant and equipment. 

There was a welcome improvement in industry activity levels from August, with several tenders issued or under negotiation.