Operating and Financial Performance
2008 was a remarkable year for the global economy, the base metals industry and for OZ Minerals. OZ Minerals was formed on 1 July 2008 with a substantial pipeline of development and exploration projects and the financial capacity, based on conditions at that time, to bring those projects into production.
However, the rapid and severe deterioration in base metal prices, particularly in the second half of the year, and the significant contraction in access to debt and equity markets which accompanied the global financial crisis, culminated in an extremely difficult operating environment for OZ Minerals.
The company’s financial results reflected this difficult economic environment with OZ Minerals recording an adjusted net loss after tax of A$66.4 million and a net loss after asset writedowns and one-off items of A$2,484.9 million.
Following is a summary of OZ Minerals’ financial performance data, as measured by a range of indicators.
OZ Minerals’ share price fell throughout the second half of 2008. Much of this decline can be linked to the general fall in equities markets over that period which was exacerbated by the significant decline in commodity prices, especially zinc and copper.
Notwithstanding our financial performance the company delivered strong operating performance in 2008.
- Strong production at Century. Installation of a new ball mill to improve metal recovered
- Golden Grove zinc production forecasts met, copper production slightly lower than planned but to increase significantly in 2009
- Increased zinc production from Rosebery through improved concentrator runtime
- Record production from the Sepon copper operation in Laos
- Production to plan at the Sepon gold operation
- Successful start-up and first production from the Prominent Hill copper-gold operation in early 2009
- Avebury nickel mine commissioned. Placed on care and maintenance in December
- Approvals to mine received for the Martabe* project and commencement of construction
- Dugald River* feasibility study completed, resources increased
- Pre-feasibility study completed for the Izok Lake and High Lake projects*
* Deferred development project
- Group copper, gold and zinc resources increased due to discoveries at Prominent Hill, Sepon, Golden Grove and Rosebery
- Identification of a potential new deposit at Prominent Hill in the ‘Western Copper Zone’
- Positive results from Okvau in north-east Cambodia
- Mineralisation at Avebury extended
Production figures for all OZ Minerals operations are detailed in the Company Overview section of this report.
OZ Minerals consolidated revenue totalled $1,218.4 million in 2008. A breakdown of revenue by commodity and destination is provided in figures 1 and 2.
OZ Minerals’ products were sold primarily to customers in Asia and Australia (Figure 3).
For more information regarding OZ Minerals operational and financial performance see our Annual Report.