OZ Minerals is an Australian based mining company that produces copper and gold in concentrates from the Prominent Hill mine in South Australia. OZ Minerals is also exploring for further copper and gold deposits around the highly prospective Prominent Hill area, as well as for gold in Cambodia. OZ Minerals, formerly Oxiana Limited, was renamed following the merger of Oxiana with Zinifex Limited in June 2008.
Sale of assets
At the beginning of 2009, OZ Minerals owned and operated the Century, Golden Grove, Rosebery and Sepon mining operations and various other development projects and exploration assets, including the Prominent Hill project in South Australia, which was in the final stages of construction. OZ Minerals had planned to refinance certain loan facilities towards the end of 2008 and had reasonably expected to be able to do so given its low gearing, strong balance sheet and strong revenue stream. However, there was a deterioration in the lending market over the course of the last quarter of 2008 and into 2009, which impacted upon OZ Minerals, with the result that it was not possible for OZ Minerals to reach agreement with all of the banks to achieve a refinancing. As a consequence, OZ Minerals explored all possible options to address its financial position, including cost cutting and deferral of planned capital expenditure and seeking to sell assets, as well as investigating raising new equity and raising finance from alternative sources.
In February 2009, OZ Minerals and Minmetals announced a proposal for the acquisition of all of the shares in OZ Minerals. While this would have resolved OZ Minerals’ refinancing requirements, the Federal Treasurer announced in March that, due to concerns about Australia’s national security interests, he would not approve Minmetals’ original proposal for acquisition of OZ Minerals if it included the sale of Prominent Hill, which is situated in the Woomera Prohibited Area.
As a result of this decision and following further negotiations between OZ Minerals and Minmetals, the consolidated entity’s assets, other than Prominent Hill, Martabe Project in Indonesia and certain other assets were sold to Minmetals. Additionally, the Martabe Project was subsequently sold to CST in June 2009.