More annual reports from Grange Resources Limited:
2023 ReportA
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Burnie Office - Tasmania
(Registered Office)
34A Alexander Street
Burnie, TAS 7320
PO Box 659
Burnie, TAS 7320
+61 (3) 6430 0222
grr.info@grangeresources.com.au
ANNUAL
REPORT 2022
GRANGE RESOURCES LIMITEDBOARD OF DIRECTORSMichelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonMichael Dontschuk Non-Executive Director Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Managing Director / Chief Executive OfficerChongtao Xu Executive Director (appointed 1 March 2023)COMPANY SECRETARYPiers LewisREGISTERED OFFICEGrange Resources Limited ABN 80 009 132 40534a Alexander Street, BURNIE, TAS 7320Telephone: + 61 (3) 6430 0222Email: GRR.Info@grangeresources.com.auSHARE REGISTRYAdvance Share Registry Services Limited110 Stirling HighwayNedlands, WA 6009AUDITORSPricewaterhouseCoopers2 Riverside QuaySOUTHBANK, VIC 3006STOCK EXCHANGEGrange Resources Limited is listed on the ASX Limited (ASX Code: GRR) and the “OTC” Markets in Berlin, Munich, Stuttgart and Frankfurt in Germany (Code: WKN. 917447)WEBSITEwww.grangeresources.com.auThis report has been printed on recycled paper.OUR BUSINESSGrange Resources Limited (Grange or the Company), ASX Code: GRR, is Australia’s most experienced magnetite producer with over 55 years of mining and production from its Savage River mine and has a projected mine life beyond 2035. Grange’s operations consist principally of owning and operating the Savage River integrated iron ore mining and pellet production business located in the north-west region of Tasmania. The Savage River magnetite iron ore mine is a long-life mining asset. At Port Latta, on the north-west coast of Tasmania, Grange owns a downstream pellet plant and port facility producing over 2.5 million tonnes of premium quality iron ore pellets annually, with plans to increase annual production. Grange has a combination of spot and contracted sales arrangements in place to deliver its pellets to customers throughout the Asia Pacific region and beyond.In addition, Grange owns a major magnetite development project at Southdown, near Albany in Western Australia. The Southdown magnetite project, once developed, is expected to have the capacity to supply double the amount of iron ore produced at Savage River, at an initial annual production rate of 5 million tonnes of premium magnetite concentrate. The Company is continuing to evaluate options related to a strategic share of the Company’s interest in the project.OUR PURPOSEThe responsible provision of mineral resources to support sustainable development, growth and prosperity.OUR VISIONWe will produce high quality steel making raw materials economically and effectively. Our operations will be efficient, flexible, and stakeholder focused. OUR VALUESWe valueAt Grange we all will… Safety Work safely.Respect Lead & act with fairness, integrity, trust and respect.Accountability Be responsible & accountable for our actions.Efficiency Utilise our resources efficiently and effectively.Sustainability Engage with stakeholders and proactively manage our impact on their environment.Teamwork Work together openly and transparently.People Promote an inclusive and diverse environment in which our people can develop and prosper.ABOUT GRANGE1GRANGE RESOURCES LIMITEDBOARD OF DIRECTORSMichelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonMichael Dontschuk Non-Executive Director Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Managing Director / Chief Executive OfficerChongtao Xu Executive Director (appointed 1 March 2023)COMPANY SECRETARYPiers LewisREGISTERED OFFICEGrange Resources Limited ABN 80 009 132 40534a Alexander Street, BURNIE, TAS 7320Telephone: + 61 (3) 6430 0222Email: GRR.Info@grangeresources.com.auSHARE REGISTRYAdvance Share Registry Services Limited110 Stirling HighwayNedlands, WA 6009AUDITORSPricewaterhouseCoopers2 Riverside QuaySOUTHBANK, VIC 3006STOCK EXCHANGEGrange Resources Limited is listed on the ASX Limited (ASX Code: GRR) and the “OTC” Markets in Berlin, Munich, Stuttgart and Frankfurt in Germany (Code: WKN. 917447)WEBSITEwww.grangeresources.com.auThis report has been printed on recycled paper.2022
OVERVIEW
OPERATIONAL OVERVIEW
• Achieved a major milestone of over 2,110 days Lost Time
Injury free.
• Mining activities have focused on waste stripping in both
North Pit and Centre Pit, following the successful completion
of North Pit Stage 6.
• Pellet production of 2.52 million tonnes for the year compared
to 2.60 million tonnes for the prior year.
• Delivered full year’s production profile and managed the
safety health and wellbeing of our employees throughout the
COVID-19 pandemic.
• Definitive feasibility study for underground mining in North
Pit commenced in 2022 with the location of the extraction
level being modelled after the completion of the North Pit
Stage 7 open pit mining.
• Redesigned Furnace Line 4 was commissioned in 2022 with
the initial phase completed and the next phase to implement
the intermediate air system scheduled for first half of 2023.
FINANCIAL OVERVIEW
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to
$321.6 million for the prior year, on revenues from operations
of $594.6 million compared to $781.7 million for the prior
year.
• Average realised product price (FOB Port Latta) of $203.18
per tonne for the year compared to $276.17 for the prior year.
• Unit C1 cash operating costs of $120.64 per tonne for the
year compared to $99.73 for the prior year mainly due to
significantly higher energy costs.
• Cash and liquid investments of $298.6 million at the end of
year compared to $463.5 million at the end of the prior year.
2
2022
OVERVIEW
OPERATIONAL OVERVIEW
• Achieved a major milestone of over 2,110 days Lost Time
Injury free.
• Mining activities have focused on waste stripping in both
North Pit and Centre Pit, following the successful completion
of North Pit Stage 6.
• Pellet production of 2.52 million tonnes for the year compared
to 2.60 million tonnes for the prior year.
• Delivered full year’s production profile and managed the
safety health and wellbeing of our employees throughout the
COVID-19 pandemic.
• Definitive feasibility study for underground mining in North
Pit commenced in 2022 with the location of the extraction
level being modelled after the completion of the North Pit
Stage 7 open pit mining.
• Redesigned Furnace Line 4 was commissioned in 2022 with
the initial phase completed and the next phase to implement
the intermediate air system scheduled for first half of 2023.
FINANCIAL OVERVIEW
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to
$321.6 million for the prior year, on revenues from operations
of $594.6 million compared to $781.7 million for the prior
year.
• Average realised product price (FOB Port Latta) of $203.18
per tonne for the year compared to $276.17 for the prior year.
• Unit C1 cash operating costs of $120.64 per tonne for the
year compared to $99.73 for the prior year mainly due to
significantly higher energy costs.
• Cash and liquid investments of $298.6 million at the end of
year compared to $463.5 million at the end of the prior year.
2
Grange is Australia’s proven, safe, reliable, long-life producer of magnetite iron ore and premium quality pellets. Grange is committed to the local community of Northwest Tasmania and makes a significant contribution to the state economy.The Board has reviewed our five key strategic drives that underpin the development of Grange’s business. These focus on: Developing a sustainable Life-of-Mine-Plan; Integrating innovation into all aspects of the business; Building capacity and capability within our workforce; Developing strategic initiatives for future development and Delivering our ESG goals. Grange’s business and operational planning is directed to enact these strategies.DEVELOP SUSTAINABLE LIFE-OF-MINE-PLAN The Life-of-Mine-Plan is a key to underpin investment decisions and to optimise business execution. Geotechnical instability has historically introduced uncertainty into the production profile. Over the past few years we have reduced the risk to the production profile with the re-commencement of Centre Pit to provide a second ore source; a substantial ore stockpile; investment in our geotechnical model and controls; and progression of the North Pit Underground feasibility study. We will continue to seek to mitigate increasing pressure on OPEX costs; develop contingency for extreme weather events; understand and mitigate risk delays on project development and complete the studies to enable integration and optionality for Open Pit and Underground operation.Centre Pit and stockpiles provide the main source of ore for 2023 and Grange will continue to invest in stripping Centre Pit and North Pit to deliver future high-grade ore. Focussed condition monitoring and maintenance will enable us to sustain and extend the life of our valuable infrastructure and assets. For longer term asset development, the focus will be on the completion of the Underground feasibility. This will provide a basis for an optimised Life of Mine Plan with a view to maximise the efficient and effective recovery of the mineral resources at Savage River. INTEGRATE INNOVATIONInnovation is critical to improving safety, efficiency and reducing cost. Innovation tools are integrated into the business through our Management Operating System (MOS) and we are building capability with our people and systems. This will be considered both at the strategic level in the development of the plan and at the transactional level. Application of new technology will support and improve operational outcomes. Our focus is to: determine the potential to introduce automation into the operation; upgrade the equipment tracking system for the mine and optimise the mining cycle to reduce delay and increase efficiency; review the opportunity for sources and supply of energy; and build production capability for potential expansion of the operation.BUILD CAPACITY & CAPABILITYWe recognise that our people are our most valuable asset. We have a committed workforce with a strong skills and experience base. There is increasing competition for human resources as the resource industry cycles and we note the risk of losing key technical staff and some of our skills and experience.To mitigate these risks we are implementing strategies to retain employees; attract the required skills into the business; improve the communication of our brand and operation in order to attract talent and build specialised expertise as we gain certainty with respect to our optimised and de-risked Life-of-Mine-Plan.DEVELOP STRATEGIC INITIATIVESGrange has developed capacity and capability. There are new markets developing to address changes in climate. Grange is well positioned to further develop existing assets and consider additional growth that will leverage opportunities in new areas.The Southdown feasibility study will be completed in 2023 and will provide guidance on the go-forward options for development of this world class project.DELIVER ESG GOALSGrange is committed to supporting the prosperity of the communities in which we operate. The global landscape is changing. Stakeholders are demanding reduction & elimination of Carbon Emissions, with businesses incorporating pricing to achieve net zero targets. We are aligning our business to the sustainable development goals that provide a roadmap to sustainability and resilience. 2023 PRIORITIES3Grange Resources Limited (Grange) owns and operates Australia’s
oldest integrated iron ore mining and pellet production business
located in the northwest region of Tasmania. The Savage River
magnetite iron ore mine, 100km southwest of the city of Burnie, is a
long-life mining asset set to continue operation to beyond 2035. At
Port Latta, 70kms northwest of Burnie, is Grange’s wholly owned
pellet plant and port facility producing more than 2.5 million tonnes
of premium quality iron ore pellets annually with plans to increase
annual production. Grange holds long term supply contracts for 1
million tonnes of its annual production and offers the balance of
its production to market via a spot sales tendering and contracting
process.
As well as this profitable magnetite operation, Grange has the
majority interest in the Southdown magnetite mining project near
Albany in Western Australia.
Grange Resources is Australia’s most experienced magnetite
producer. Grange is a proven and reliable commercial producer
combining both mining and pellet production expertise.
ABOUT THE
GRANGE
BUSINESS
MAGNETITE
Magnetite is a naturally occurring mineral commonly refined into an
iron ore concentrate and used for steel production. Iron ore makes
up about five per cent of the Earth’s crust and most commonly
occurs in the form of haematite or magnetite. Most of the magnetite
mined is usually used to produce concentrate for pellet feed or
pellets which are used to make steel.
The Australian iron ore industry has traditionally been based on
the mining, production, and export of haematite ores, also referred
to as ‘Direct Shipping Ore’ (DSO). The majority of Australian iron
ore production comes from DSO. While magnetite is an emerging
industry in Australia, globally it accounts for approximately 50 per
cent of iron ore production.
Smelting magnetite to iron involves agglomeration or ‘clumping
together’ of the magnetite concentrate, and thermal treatment to
produce haematite iron ore pellets.
The pellets can be used directly in a blast furnace or at direct
reduction iron-making plants.
Magnetite concentrate has internal thermal energy, meaning less
energy is required as the magnetite is converted into haematite
pellets. This results in lower carbon dioxide emissions. The blast
furnace chemically reduces iron oxide into liquid iron called ‘hot
metal’. The iron ore and reducing agents (coke, coal and limestone)
are combined. Pre-heated air is blown at the bottom of the
combination for up to eight hours. The final product is a liquid which
is drained, and eventually refined to produce steel.
Mining magnetite ore is capital intensive and requires significant
downstream processing infrastructure including a beneficiation
plant, a pellet plant and port facilities. Magnetite products command
a value premium above haematite ore products such as fines and
lump. This premium is derived on two fronts, through additional iron
content, and a quality premium.
The growth in Chinese demand and its understanding of the use of
magnetite-based iron ore products has seen a significant change in
the value accrued to both magnetite concentrate and pellets, and
the methodology used for determining that value.
As magnetite concentrate is a refined product, it usually has higher
iron content and lower impurities. This can have beneficial quality
and environmental outcomes for the steel maker.
4
Magnetite is a naturally occurring mineral commonly refined into an
Grange Resources Limited (Grange) owns and operates Australia’s
iron ore concentrate and used for steel production. Iron ore makes
oldest integrated iron ore mining and pellet production business
up about five per cent of the Earth’s crust and most commonly
located in the northwest region of Tasmania. The Savage River
occurs in the form of haematite or magnetite. Most of the magnetite
magnetite iron ore mine, 100km southwest of the city of Burnie, is a
mined is usually used to produce concentrate for pellet feed or
long-life mining asset set to continue operation to beyond 2035. At
Port Latta, 70kms northwest of Burnie, is Grange’s wholly owned
pellet plant and port facility producing more than 2.5 million tonnes
of premium quality iron ore pellets annually with plans to increase
annual production. Grange holds long term supply contracts for 1
million tonnes of its annual production and offers the balance of
its production to market via a spot sales tendering and contracting
process.
As well as this profitable magnetite operation, Grange has the
majority interest in the Southdown magnetite mining project near
Albany in Western Australia.
Grange Resources is Australia’s most experienced magnetite
producer. Grange is a proven and reliable commercial producer
combining both mining and pellet production expertise.
ABOUT THE
GRANGE
BUSINESS
MAGNETITE
pellets which are used to make steel.
The Australian iron ore industry has traditionally been based on
the mining, production, and export of haematite ores, also referred
to as ‘Direct Shipping Ore’ (DSO). The majority of Australian iron
ore production comes from DSO. While magnetite is an emerging
industry in Australia, globally it accounts for approximately 50 per
cent of iron ore production.
Smelting magnetite to iron involves agglomeration or ‘clumping
together’ of the magnetite concentrate, and thermal treatment to
produce haematite iron ore pellets.
The pellets can be used directly in a blast furnace or at direct
reduction iron-making plants.
Magnetite concentrate has internal thermal energy, meaning less
energy is required as the magnetite is converted into haematite
pellets. This results in lower carbon dioxide emissions. The blast
furnace chemically reduces iron oxide into liquid iron called ‘hot
metal’. The iron ore and reducing agents (coke, coal and limestone)
are combined. Pre-heated air is blown at the bottom of the
combination for up to eight hours. The final product is a liquid which
is drained, and eventually refined to produce steel.
Mining magnetite ore is capital intensive and requires significant
downstream processing infrastructure including a beneficiation
plant, a pellet plant and port facilities. Magnetite products command
a value premium above haematite ore products such as fines and
lump. This premium is derived on two fronts, through additional iron
content, and a quality premium.
The growth in Chinese demand and its understanding of the use of
magnetite-based iron ore products has seen a significant change in
the value accrued to both magnetite concentrate and pellets, and
the methodology used for determining that value.
As magnetite concentrate is a refined product, it usually has higher
iron content and lower impurities. This can have beneficial quality
and environmental outcomes for the steel maker.
4
DEAR SHAREHOLDERS,The Company achieved outstanding performance in FY2022 as a result of the hard work and commitment made by our people to keep our operations running safely. Your Company delivered another strong set of financial results and paid dividends of 4 cents per share fully-franked. These results were achieved through a focused strategy of capital expenditure with improvements in operational performance and safety, supported by a continued focus on productivity. Our balance sheet remains strong. We have been reviewing our strategy against changes in the external environment by analysing the risks and opportunities we are facing and optimising our operations with a number of long-term improvement projects. We believe that the Board’s approach to strategy and risk management positions us to manage and respond to changes and capture opportunities to grow shareholder value over time. We maintain a relentless focus on the health and safety of our people and the communities in which we operate. 2022 REVIEWThe iron ore market was very volatile in 2022. The iron ore price reached its highest level for the year at about US$160 per tonne in March 2022, although the second part of the year had a different story. The price dropped by half to approximately US$80 per tonne in November 2022 due to renewed worries over COVID-19 restrictions in China. There were renewed concerns over the country’s property sector and cooling global economic growth. The Chinese market accounts for approximately two-thirds of global seaborne iron ore demand. The Company, like many other in the industry, was challenged by an inflationary environment that saw the cost of energy, labour and many other inputs of production rise significantly over the past year.In spite of these challenges, the Company achieved a profit after tax of $171.7million (2021: $321.6 million), on revenues from mining operations of $594.6 million (2021: $781.7 million). The year’s average product prices realised $203.18 per tonne (2021: $276.17 per tonne) (FOB Port Latta). Total iron ore product sales of 2.57 million tonnes (2021: 2.62 million tonnes) were achieved. Increases in fuel and gas costs were balanced with improved production rates resulting in C1 cash operating costs of $120.64 per tonne (2021: $99.73 per tonne). The increase in costs was largely due to the significant increase in energy costs. A final dividend of 2 cents per share taking total dividends declared for shareholders this year to 4 cents per share or $46.3 million. Cash and liquid investments positioned at $298.6 million (2021: $463.5 million) at the end of the year.The Company delivered strong results as the world recovers from 3 years of disruption caused by the COVID-19 pandemic. A focus on safety has been maintained across the business. 2022 was still a difficult and challenging year for everyone. We are very proud of the Company’s response to COVID-19. Despite all the uncertainties created by the pandemic, we have achieved over 2110 days Lost Time Injury Free. This achievement is made possible by the hard work and dedication of hundreds of employees, contractors, and the support of the local community throughout the year.Mining activities have focused on the cutbacks in both North Pit and Centre Pit, following the completion of North Pit Stage 6. North Pit Stage 6 yielded large stockpiles to support production in 2022 and 2023. Mining movement was impacted by mining equipment availability and positive COVID cases in the workforce, but improved significantly over the later part of the year. The North Pit Underground PFS demonstrated a technically and economical feasible underground mining operation for North Pit. Ore continuity at depth indicated the potential for 6 million tonne per annum production rate with a mine life of more than 10 years. The Definitive Feasibility Study was commenced in 2022, with an amendment of the extraction level after the completion of North Pit Stage 7 open pit mining. The redesigned pellet plant furnace line 4 was commissioned in 2022. The next phase will be to improve the air distribution through the furnace which is scheduled for Q2, 2023. These design modifications will improve production efficiency and support Grange’s decarbonisation initiatives.During 2022, the Company commenced a definitive feasibility study on a 5 Mtpa development case with new technology and additional test-work for Southdown magnetite project. In December 2022, the Company entered into a binding agreement with its joint venture partner, SRT Australia Pty Ltd to reacquire SRT’s 30 per cent interest in the Southdown Magnetite Project. FIRB approval on the acquisition was received on 3rd March 2023. The transaction is expected to be completed in Q2, 2023. Upon completion, Grange will hold 100 per cent ownership in the Project. All tenements, permits and project assets continue to be maintained in good order. Climate change is a defining issue the world is currently facing. Grange published its baseline Environmental, Social, and Governance (ESG) report with disclosures on 21 core metrics set by the World Economic Forum (WEF) in its standardised and globally recognised Stakeholder Capitalism Metrics ESG framework. Grange has developed a road map to reduce emissions. This will involve the reduction in energy used per tonne of product; upgrades to furnaces; CHAIRPERSON’S & CHIEF EXECUTIVE OFFICER’S REVIEW5GRANGE RESOURCES ANNUAL REPORT 2022
recovery of heat in the pellet plant; application of technology
and electric vehicles in the mining operation; and alternative fuel
sources. The Board has endorsed the pursuit of decarbonisation
of Grange’s Business with specific targets for CO2-e reduction
including:
• The elimination of non-renewable coal sources like anthracite, by
2025.
• CO2-e emission target reduction of 50% by 2030 reducing
emissions to 53kg of CO2-e per tonne of iron ore products.
• Target of net zero CO2-e (Scope 1 and 2) emissions by 2035.
• Continuing focus on improving productivity and implementing
cost control projects
• Delivering on secured off take agreements
• Strategic review on the completion of the feasibility study on a
5 Mtpa development case with new technology for Southdown
magnetite project.
The company continues to assess and manage various business
risks which could impact the company’s operating and financial
performance and its ability to successfully deliver strategic priorities
including:
• Health, safety and environment
•
Impacts of climate change on our business
• Volatility in iron ore market and movements in foreign exchange
rates
• Volatility in the energy prices and availability, and tight labour
markets
• Production risks and costs associated with pit wall stability and
ageing infrastructure
THANK YOU
On behalf of Grange’s Board, we would like to thank all of our
employees for their dedication and hard work over the past year.
We are proud of our excellent culture, capability and resilience to
position us for a prosperous future. Thank you to our Shareholders
for your continued support.
Michelle Li
Chairman
Honglin Zhao
Chief Executive Officer
OUTLOOK
Looking ahead, the iron ore pellet market remains uncertain and
challenging. The iron ore price rallied after China reopened at
the end of 2022. On the 17th February, China issued its biggest-
ever cash injection of US$121 billion. This prompted increased
demand for steel as the manufacturing and construction sectors
recommenced normal activity. However, a modest increase in
seaborne iron ore supply during 2023, led by Brazil and India, will
impact the supply and demand equation and potentially impact the
iron ore price. The possible increasing pricing volatility stemming
from increasing geopolitical tensions, a growing debate over the
future of globalization and the United States’ policy of decoupling
from China. Risks with respect to energy costs are slightly reduced,
although labour markets remained tight.
Despite the uncertain conditions we currently face, the long-term
outlook for our sector remains positive. We continue to build our
safety culture through initiatives. Our employees are encouraged
to come up with new, creative ideas on how to strengthen and
improve our business. Our strong balance sheet provides a
fundamental base for managing volatile markets and ensuring
capital is available for sustaining operations through the cycle. This
strength is underpinned by our ongoing generation of solid cash
flows from operations. We continue to implement measures to both
preserve the balance sheet strength and align our capital allocation
framework with the cyclical nature of the industry. Our primary goal
is to remain competitive in a frequently changing iron ore market.
Our focus will remain on delivering value to our shareholders in
the near, medium and long term. We strive to ensure our company
remains strong and resilient. Sustainability will remain an important
priority and indeed, will play an increasingly important role in our
business.
The Board and the management team have a positive outlook for
the pellet market and are proactively exploring opportunities for
innovation, improvement and productivity growth. De-carbonisation
ambitions for the sector provide a unique opportunity for us. We
are confident in our competitiveness to supply a high quality, low
impurity iron ore pellet product. We strive to deliver value to our
loyal employees and shareholders.
The Company’s strategic focus is to generate sustained shareholder
value by safely producing high quality iron ore products from
its Savage River and Port Latta operations in Tasmania whilst
continuing to assess the feasibility of a major iron ore development
project at Southdown, near Albany in Western Australia, by:
• Optimising the Life of Mine Plan together with cost reduction
strategies
• Completing the Definitive Feasibility Study and transition
preparation for underground mining in North Pit
• Maintaining access to ore with continuing investment in mine
development
• Maintaining critical process infrastructure
6
GRANGE RESOURCES ANNUAL REPORT 2022
including:
2025.
OUTLOOK
recovery of heat in the pellet plant; application of technology
• Continuing focus on improving productivity and implementing
and electric vehicles in the mining operation; and alternative fuel
cost control projects
sources. The Board has endorsed the pursuit of decarbonisation
of Grange’s Business with specific targets for CO2-e reduction
• Delivering on secured off take agreements
• The elimination of non-renewable coal sources like anthracite, by
magnetite project.
• Strategic review on the completion of the feasibility study on a
5 Mtpa development case with new technology for Southdown
• CO2-e emission target reduction of 50% by 2030 reducing
emissions to 53kg of CO2-e per tonne of iron ore products.
The company continues to assess and manage various business
risks which could impact the company’s operating and financial
performance and its ability to successfully deliver strategic priorities
• Target of net zero CO2-e (Scope 1 and 2) emissions by 2035.
including:
Looking ahead, the iron ore pellet market remains uncertain and
challenging. The iron ore price rallied after China reopened at
the end of 2022. On the 17th February, China issued its biggest-
ever cash injection of US$121 billion. This prompted increased
demand for steel as the manufacturing and construction sectors
recommenced normal activity. However, a modest increase in
rates
markets
• Health, safety and environment
•
Impacts of climate change on our business
• Volatility in iron ore market and movements in foreign exchange
• Volatility in the energy prices and availability, and tight labour
seaborne iron ore supply during 2023, led by Brazil and India, will
• Production risks and costs associated with pit wall stability and
impact the supply and demand equation and potentially impact the
ageing infrastructure
iron ore price. The possible increasing pricing volatility stemming
from increasing geopolitical tensions, a growing debate over the
future of globalization and the United States’ policy of decoupling
from China. Risks with respect to energy costs are slightly reduced,
although labour markets remained tight.
THANK YOU
On behalf of Grange’s Board, we would like to thank all of our
employees for their dedication and hard work over the past year.
We are proud of our excellent culture, capability and resilience to
Despite the uncertain conditions we currently face, the long-term
position us for a prosperous future. Thank you to our Shareholders
outlook for our sector remains positive. We continue to build our
for your continued support.
Michelle Li
Chairman
Honglin Zhao
Chief Executive Officer
safety culture through initiatives. Our employees are encouraged
to come up with new, creative ideas on how to strengthen and
improve our business. Our strong balance sheet provides a
fundamental base for managing volatile markets and ensuring
capital is available for sustaining operations through the cycle. This
strength is underpinned by our ongoing generation of solid cash
flows from operations. We continue to implement measures to both
preserve the balance sheet strength and align our capital allocation
framework with the cyclical nature of the industry. Our primary goal
is to remain competitive in a frequently changing iron ore market.
Our focus will remain on delivering value to our shareholders in
the near, medium and long term. We strive to ensure our company
remains strong and resilient. Sustainability will remain an important
priority and indeed, will play an increasingly important role in our
business.
The Board and the management team have a positive outlook for
the pellet market and are proactively exploring opportunities for
innovation, improvement and productivity growth. De-carbonisation
ambitions for the sector provide a unique opportunity for us. We
are confident in our competitiveness to supply a high quality, low
impurity iron ore pellet product. We strive to deliver value to our
loyal employees and shareholders.
The Company’s strategic focus is to generate sustained shareholder
value by safely producing high quality iron ore products from
its Savage River and Port Latta operations in Tasmania whilst
continuing to assess the feasibility of a major iron ore development
project at Southdown, near Albany in Western Australia, by:
• Optimising the Life of Mine Plan together with cost reduction
strategies
• Completing the Definitive Feasibility Study and transition
preparation for underground mining in North Pit
• Maintaining access to ore with continuing investment in mine
development
• Maintaining critical process infrastructure
6
7
OPERATING & FINANCIAL REVIEWKEY HIGHLIGHTS• Achieved over 2,110 days Lost Time Injury Free.• Mining activities have focused on waste stripping in both North Pit and Centre Pit, following the successful completion of North Pit Stage 6.• Concentrate production was 2.62 million tonnes an increase from the previous year of 2.56 million tonnes.• Pellet production of 2.52 million tonnes for the year compared to 2.60 million tonnes for the prior year.• Grange’s high quality, low impurity iron ore products attracted average realised product price (FOB Port Latta) of $203.18 per tonne for the year, a decrease compared to $276.17 for the prior year.• Unit C1 cash operating costs of $120.64 per tonne for the year compared to $99.73 for the prior year mainly due to significantly higher energy costs.• Delivered profit after tax of $171.7 million for the year compared to $321.6 million for the prior year.• Cash and liquid investments of $298.6 million at the end of year compared to $463.5 million at the end of the prior year.8SAFETY PERFORMANCEGrange operations have achieved over 2,110 consecutive days Lost Time Injury free by year end 2022. The sustained focus on lead indicators, hazard identification and risk management has helped us maintain the current long running lost time injury free period, despite a continued increase in worker hours.There was a notable decrease in Medical Treatment (MTI) injuries, however disabling injuries in 2022 remained the same as in 2021 (7 cases). During the year, there were 4 disabling injuries caused by mine operations jarring events, 1 similar type of injury in the concentrator and 2 ankle related injuries at Port Latta. All persons involved were given meaningful work for their respective periods of incapacity. They have actively contributed to their return-to-work programs reducing the periods of alternate work so far as reasonably possible.2022 saw considerable contractor involvement at both operational sites, increasing our worker hours and our level of risk exposures, with new and ongoing projects. These included contractor crews assembling new and repairing the older truck fleet, a crew working on the Pipeline Span to rectify corrosion, teams constructing new buildings at both sites and crews working on the new bentonite mixing system at Port Latta. Our SEMS (Safety, Environment Management System) onsite training and major hazard systems improvements continue to support a compliant, well managed and mature safety culture throughout the year.FULL YEAR RESULTGrange recorded a statutory profit after tax of $171.7 million for the year ended 31 December 2022 (2021: $321.6 million).Key revenue metrics for the year ended 31 December 2022 and the preceding 2021 year were as follows: 20222021Iron Ore Pellet Sales (dmt)2,429,7002,507,201Iron Ore Concentrate Sales (dmt)1,85342Iron Ore Chip Sales (dmt)136,760108,130Total Iron Ore Product Sales (dmt)2,568,3132,615,373Average Realised Product Price (US$/t FOB Port Latta)*141.28208.08Average Realised Exchange Rate (AUD:USD)0.69530.7535Average Realised Product Price (A$/t FOB Port Latta)203.18276.17*adjusted for the costs of freight and final pricing settlements on provisional settlements as per sales agreements. Pricing is typically finalised in one to three months after shipment month.Total sales for the year ended 31 December 2022 was 2.57 million tonnes of high quality, low impurity iron ore products (2021: 2.62 million tonnes) and reflects sustained production from maintaining access to high grade ore.The average iron ore product price received during the year was $203.18 per tonne of product sold (FOB Port Latta) (2021: $276.17 per tonne). Key operating metrics for the year ended 31 December 2022 and the preceding 2021 year were as follows: 20222021Total BCM Mined15,466,53413,667,044Total Ore BCM1,280,5012,804,234Concentrate Produced (t)2,624,8652,559,987Weight Recovery (%)45.244.4Pellets Produced (t)2,518,2322,597,428Pellet Stockpile (t)298,725210,193“C1” Operating Cost (A$/t Concentrate Produced)(1)120.6499.73(1) Note: “C1” costs are the cash costs associated with producing iron ore products without allowance for mine development, deferred stripping and stockpile movements, and also excludes royalties, sustaining capital, depreciation and amortisation costs.Mining activities have focused on the cutbacks in both North Pit and Centre Pit, following the successful completion of North Pit Stage 6. This ore mining stage yielded large stockpiles to support production in 2022 and 2023. Mining movement improved significantly over the later part of the year with completion of some repairs to the truck fleet and the implementation of modifications to the haul network. The new Caterpillar 6040 face shovel is working well and six second-hand Caterpillar 789 trucks have been introduced to the fleet to support production. The rebuild of the current fleet also continues with mechanical overhauls on six trucks completed during the year. Additional replacement equipment is scheduled for delivery in Q1, 2023.Lag IndicatorsJan ’22Feb ‘22Mar ‘22Apr ‘22May ‘22Jun ‘22Jul ‘22Aug ‘22Sep ‘22Oct ‘22Nov ‘22Dec ‘22IncidentsIncidents0123456012344.21.856MTILTIDITR:FRLT:FRDI:FR09 OPERATING & FINANCIAL REVIEWKEY HIGHLIGHTS• Achieved over 2,110 days Lost Time Injury Free.• Mining activities have focused on waste stripping in both North Pit and Centre Pit, following the successful completion of North Pit Stage 6.• Concentrate production was 2.62 million tonnes an increase from the previous year of 2.56 million tonnes.• Pellet production of 2.52 million tonnes for the year compared to 2.60 million tonnes for the prior year.• Grange’s high quality, low impurity iron ore products attracted average realised product price (FOB Port Latta) of $203.18 per tonne for the year, a decrease compared to $276.17 for the prior year.• Unit C1 cash operating costs of $120.64 per tonne for the year compared to $99.73 for the prior year mainly due to significantly higher energy costs.• Delivered profit after tax of $171.7 million for the year compared to $321.6 million for the prior year.• Cash and liquid investments of $298.6 million at the end of year compared to $463.5 million at the end of the prior year.8GRANGE RESOURCES ANNUAL REPORT 2022
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The North Pit Underground PFS previously demonstrated a
technically and economical feasible underground mining operation
for North Pit. Ore continuity was demonstrated at depth and
highlights the potential for 6 million tonne per annum production rate
with an underground mine life of more than 10 years. The Definitive
Feasibility Study was commenced in 2022, with an amendment
to the location of the extraction level being modelled after the
completion of North Pit Stage 7 open pit mining. Additional drilling
to the north, revisions to geotechnical models were completed and
further exploration is planned as part of the DFS in 2023.
PORT LATTA IMPROVEMENT PROJECTS
The redesigned Furnace Line 4 was commissioned in 2022. The
initial phase involved integration into the operation with completion
of the refractory rebuild. The next phase will be to commission the
intermediate air system which will allow the improvement of air
distribution through the furnace, and is scheduled for Q2, 2023. This
will inform future design modifications to the other furnace lines
and support Grange’s decarbonisation initiatives.
ENERGY ALTERNATIVES
Early in 2020, Grange set out to investigate potential routes for
carbon reduction at our Tasmanian operation. It was identified that
our two biggest contributors were our diesel usage from the mining
fleet at Savage River and natural gas usage from the furnaces at the
Port Latta Pellet Plant.
As part of our strategic vision to reduce carbon emissions across
the operation, discussions were commenced through the formation
of the Heavy Industry Low Carbon Transition CRC (HILT-CRC). In
late 2021, the HILT-CRC was finalised, with Grange becoming a
founding member and core partner. It is with great excitement that
we work with the newly formed HILT-CRC to advance Australian
Heavy Industry’s Transition to Low Carbon.
In 2021, Grange also set out on a specific Hydrogen Study. This was
in line with the Tasmanian Government’s ambitions to establish a
Hydrogen Hub within Tasmania, to utilise the current Green Electricity
supply to generate Green Hydrogen. The study, co-founded by the
Tasmanian Government and in collaboration with Hatch, was aimed
at investigating the feasibility to convert our Port Latta operations
from natural gas to Green Hydrogen. This Prefeasibility Study
concluded that it was technically feasible to operate the Port Latta
facility on Hydrogen, with no impact on product make or quality.
The study also identified the key commercial drivers which would
need to be achieved to make the project commercially feasible and
will require support from the Tasmanian Government as part of
establishing a Tasmanian hydrogen economy. If these fundamentals
were achieved, the next step would be to undertake a pilot plant
scale trial and thereafter convert one of the 5 Port Latta Furnaces
to run on Hydrogen (pending supply and legislative requirements
being met).
Grange will continue to work with the Tasmanian Government,
external parties, and as part of the HILT CRC, to progress
decarbonisation strategies for our operations.
10
GRANGE RESOURCES ANNUAL REPORT 2022
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The North Pit Underground PFS previously demonstrated a
technically and economical feasible underground mining operation
for North Pit. Ore continuity was demonstrated at depth and
highlights the potential for 6 million tonne per annum production rate
with an underground mine life of more than 10 years. The Definitive
Feasibility Study was commenced in 2022, with an amendment
to the location of the extraction level being modelled after the
completion of North Pit Stage 7 open pit mining. Additional drilling
to the north, revisions to geotechnical models were completed and
further exploration is planned as part of the DFS in 2023.
PORT LATTA IMPROVEMENT PROJECTS
The redesigned Furnace Line 4 was commissioned in 2022. The
initial phase involved integration into the operation with completion
of the refractory rebuild. The next phase will be to commission the
intermediate air system which will allow the improvement of air
distribution through the furnace, and is scheduled for Q2, 2023. This
will inform future design modifications to the other furnace lines
and support Grange’s decarbonisation initiatives.
ENERGY ALTERNATIVES
Early in 2020, Grange set out to investigate potential routes for
carbon reduction at our Tasmanian operation. It was identified that
our two biggest contributors were our diesel usage from the mining
fleet at Savage River and natural gas usage from the furnaces at the
Port Latta Pellet Plant.
As part of our strategic vision to reduce carbon emissions across
the operation, discussions were commenced through the formation
of the Heavy Industry Low Carbon Transition CRC (HILT-CRC). In
late 2021, the HILT-CRC was finalised, with Grange becoming a
founding member and core partner. It is with great excitement that
we work with the newly formed HILT-CRC to advance Australian
Heavy Industry’s Transition to Low Carbon.
In 2021, Grange also set out on a specific Hydrogen Study. This was
in line with the Tasmanian Government’s ambitions to establish a
Hydrogen Hub within Tasmania, to utilise the current Green Electricity
supply to generate Green Hydrogen. The study, co-founded by the
Tasmanian Government and in collaboration with Hatch, was aimed
at investigating the feasibility to convert our Port Latta operations
from natural gas to Green Hydrogen. This Prefeasibility Study
concluded that it was technically feasible to operate the Port Latta
facility on Hydrogen, with no impact on product make or quality.
The study also identified the key commercial drivers which would
need to be achieved to make the project commercially feasible and
will require support from the Tasmanian Government as part of
establishing a Tasmanian hydrogen economy. If these fundamentals
were achieved, the next step would be to undertake a pilot plant
scale trial and thereafter convert one of the 5 Port Latta Furnaces
to run on Hydrogen (pending supply and legislative requirements
being met).
Grange will continue to work with the Tasmanian Government,
external parties, and as part of the HILT CRC, to progress
decarbonisation strategies for our operations.
EXPLORATION AND
EVALUATION
In 2022 there were 9,766 metres of diamond drilling completed.
5,524 metres were completed within the Centre pit deposit and 4,242
within the North Pit deposit. The diamond drilling was focused on
refinement of the existing Mineral Resources in North Pit and Centre
Pit and improvement of the geo-chemical categorisation of waste
rock types. The drilling has resulted in maintenance of the existing
Mineral Resources despite mining depletion.
The Mineral Resource stands at 485 million tonnes at 44.5% DTR,
maintaining our resource from the 2021 annual report, with a small
reduction in grade. The decrease in grade is a result of new drilling
data and updated statistical estimation of North Pit. The decrease
in total Mineral Resource grade is considered minor given the
quantum of the total Mineral Resources, annual mine production
levels, and the ongoing nature of the underground mining study.
Ore Reserves decreased to 96MT @ 46.7% DTR due primarily to
mining depletion from North Pit and Centre Pit during the year.
There was an improvement in confidence of Ore Reserves with an
increase in Proven Reserves. All Ore Reserves remain based on
open pit only mining methods and do not include any underground
mineable resources.
The North Pit Underground Definitive
Feasibility Study (NPUG DFS) is still in progress and estimation of
the underground Ore Reserves will be conducted at the conclusion
of the NPUG DFS scheduled for 2023.
Further resource definition drilling of North Pit from underground
is expected to commence in 2023. The aim is to improve confidence
in the quantity and grade of the resource and further de-risk the
mineral resource for potential underground mining while also
exploring the ore body at greater depth.
FINANCIAL POSITION
Grange’s net assets increased during the year to $904.1 million (31
December 2021: $871.2 million). The key movements in net assets
during the year are a result of the following:
• An increase in property plant and equipment and mine properties
and development of $60.6 million and $98.6 million respectively.
• An increase in other financial assets of $170.6 million due to
investment in term deposits
• An increase in trade receivables by $34.3 million
• A decrease in income tax payable by $62.9 million
• A decrease in cash and cash equivalents of $335.5 million (refer
to statement of cashflow) and
• A decrease in net deferred tax assets by $60.9 million.
• The Group’s market capitalisation as at 22 March 2023 is
$827.5 million.
STATEMENT OF CASH FLOWS
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net cash inflows from operating activities for the year were $196.9
million (2021: inflows $498.2 million) due to lower prices compared
to previous year and increase in unit operating costs.
NET CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflows from investing activities for the period were
$396.2 million (2021: outflows $79.6 million) and principally related
to funds invested in term deposits of $191.2 million and expenditures
for mine properties and development of $136.8 million and property,
plant and equipment of $87.7 million.
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net cash outflows from financing activities for the period were
$145.6 million (2021 outflow: $165.3 million) and principally related
to the payment of 2021 final dividend ($115.7 million) and 2022
interim dividend ($23.1 million).
10
11
GRANGE RESOURCES ANNUAL REPORT 2022
12
GRANGE RESOURCES ANNUAL REPORT 2022
12
MINERAL RESOURCES AND
ORE RESERVES STATEMENT
SAVAGE RIVER OPERATIONS
The following tables show the Mineral Resources and Ore Reserves
for the Savage River operations as at 31 December 2022. The
mining of ore throughout the year focussed on high grade supply
from North Pit. The Mineral Resource has been depleted since the
previous estimate dated 31 December 2021 as a result of mining
offset by updates from the drilling program. Ore Reserves have
decreased due to mining depletion from North Pit and Centre Pit.
Mineral Resources and Ore Reserves are categorised in accordance
with the Australasian Code for Exploration Results, Mineral
Resources and Ore Reserves of 2012 (JORC Code, 2012). Estimated
Measured and Indicated Mineral Resources include those Mineral
Resources modified to produce the estimated Ore Reserves. Mineral
Resources which are not included in the Ore Reserves did not meet
the required economic viability hurdle at the time of last review.
MINERAL RESOURCES
A summary of the total Mineral Resources for Savage River as at
31 December 2022, above a cut-off grade of 15% DTR is as follows:
As at December 2022
As at December 2021
Tonnes
(Mt)
Grade
% DTR*
Tonnes
(Mt)
Grade
% DTR*
Measured
Indicated
Inferred
Total
173.0
172.6
139.4
485.0
51.5
41.8
37.4
44.5
167.7
176.9
141.2
485.8
52.7
43.0
39.7
45.4
* Davis Tube Recovery – a measure of recoverable magnetite
ORE RESERVE
A summary of the Ore Reserve for Savage River as at 31 December
2022, above a cut-off grade of 15% DTR is as follows:
As at December 2022
As at December 2021
Tonnes
(Mt)
Grade
% DTR*
Tonnes
(Mt)
Grade
% DTR*
Proved
Probable
Total
69.0
27.7
96.7
49.3
40.1
46.7
61.6
41.5
103.1
51.1
41.4
47.2
A detailed statement of the Mineral Resources and Ore Reserves can
be found in the ASX announcement dated 31-March-2023. Grange
confirms in reproducing the Mineral Resources and Ore Reserves in
this subsequent report, that it is not aware of any new information
or data that materially affects the information included and all the
material assumptions and technical parameters underpinning the
estimates in this report continue to apply and have not materially
changed.
HEALTH SAFETY AND
ENVIRONMENT
OVERVIEW
Grange believes that responsible occupational Health and Safety
management with sound environmental and social responsibility
(HSE) practices are integral to an efficient and successful company.
Grange’s integrated OHS & ESR Management Systems form our
“Safety and Environment Management System” (SEMS) which
supports OHS & ESR policies and defines the required standards to
which any Grange facility must operate. Our OHS policy is reviewed
annually by our executive team and leads us to continually improve
our Safety Systems, reinforcing Psychological Health and Safety at
Work
SEMS is an integral part of the Grange Management System
(GMS) and is well supported by a management plan for 16 of the
major hazards identified in our industry. Of the 16 Major Hazard
Standards, 4 are deemed to be Principal Mining Hazards as outlined
in the Tasmanian Mining Legislation. The implementation and
effective management of SEMS enables compliance with legislation,
reduction of risk, increased efficiencies and provides the framework
for continuous improvement. SEMS is aligned to ISO 45001 & ISO
45003 Occupational Health & Safety Standards and to ISO 14001
Environmental Management Standards. These are all applicable to
any existing and future national or international operation. SEMS
is now integrated into our Certificate IV Leadership & Management
training competency for our current and aspiring leaders.
During 2022 we recognised the need for SEMS to include an update
to the “Supervisor’s Handbook” in the MOS toolbox and consultation
commenced with key stakeholders. This work will result in a new
version of the handbook being released in 2023.
MISSION STATEMENT
To drive a continuous improvement culture involving everyone at
Grange. We strive to eliminate injury, loss and waste, and create
positive environmental outcomes adding value to the communities
in which we operate.
This will be achieved through effective adherence to management
systems, integrated risk management practices, risk aware culture,
demonstrable
leadership, maintaining standards, monitoring
performance and looking after our people.
SAFETY PRINCIPLES
• All injuries and loss events are preventable
• All hazards can be identified and their risks managed
• No task is so important that it cannot be done safely and
respectfully
• Every person is accountable for their own safety and the safety
of those around them
• Safety performance can always be improved
SAFETY PERFORMANCE
The Company remains committed to providing safe systems
and a safe place of work for everyone at every site. We take this
commitment seriously and expect those working with and for us
share the same level of commitment. We want all our workers,
employees, contractors and visitors to return home in the same
or better condition than when they come to work. The Board has
monitored a 3-year HSE Strategic Plan culminating in 2023, during
13
GRANGE RESOURCES ANNUAL REPORT 2022
this year the goals of the plan were actively progressed and the plan
is on track for a successful 3-year outcome. The effectiveness of our
systems and safety management in general is well demonstrated
by the consistent measurable improvement in our safety lag
indicators. Targeted improvements in our lag indicators continue
to be reinforced by a regime of measurable lead indicators to help
reduce risk exposures.
During 2022 the company continued safety controls to manage the
impact of the global COVID-19 pandemic. The management of our
controls prevented any business disruption and ensured the health
safety and wellbeing of our employees, contractors and supported
our community.
In addition, Grange is committed to ensuring compliance with
legislative requirements for each area of its operations including
meeting or exceeding requirements within:
• Federal & State Work Health & Safety Legislation
• Anti-Discrimination Legislation
• Fair Work Australia Legislation
• Rehabilitation & Workers Compensation Legislation
• Environmental Legislation
• Codes of Practice nominated in all Federal and State Legislation
• Adopting accepted industry & Australian Standards in areas
where legislation is deficient
• Whistleblower legislation
• Mining specific, HSE Legislation as required; and
• Environmental licence conditions for existing and new operations.
Established systems are in place to ensure legislative requirements
are tracked, monitored and corrective actions implemented for any
instances of non-compliance.
Grange continued the focus on reducing costs without reducing
support services:
• Emergency Response Team (ERT) in-house training was further
developed, saving considerable costs, while maintaining a high
standard of response and continuing to develop our underground
rescue capability.
• The underground emergency refuge chambers and associated
ventilation and pumping equipment were monitored to maintain
compliance with industry standards and WST expectations.
• Emergency response team size was managed while increasing
our general first aid training coverage has ensured we have
competent people where they are needed.
• Obtained Federal and State government training funds reducing
the outlay for training in leadership and continuous improvement
and seeking to provide an opportunity for additional young
workers to commence apprenticeships.
• The highwall scaling excavator continued development and
promises to provide a machine capable of restoring lost berm
catch capacity in the mine, cleaning batters and improving
mining safety. It continues to generate industry wide interest.
• Participating in the Insurance Underwriters safety audit to
provide initiatives to help reduce insurance costs.
•
Investment in Mental Health and Wellbeing first aid training for
Management and Contact Officers has helped foster an alert and
caring worker relationship.
• Focus on gender diversity, respect at work and cultural
awareness has promoted the role of women in our workforce
14
and is supporting greater diversity in our teams.
• Strategic focus on “Critical Controls” further strengthens to our
risk management system and initiatives.
Grange recognises the importance of our contractors’ safety
management systems being aligned with WorkSafe Tasmania and
mine safety regulations as well as being on par with our own safety
standards. To this end we have incorporated and communicated
new OHS & ESR requirements for contractors into our SEMS.
The enhancement of our Safety Preventative Maintenance work
orders continued through 2022 with lead indicators, dedicated
Area Inspections covering all areas on site, formalising Task
Observations for management and key personnel as Lead Indicator
Key Performance Indicators (KPI’s). The lead indicators have been
strengthened by the addition of specific “care and maintenance”
KPIs for underground workings.
Completion and tracking of lead indicators have moved to the
iAuditor system meaning a speedy and more efficient process and
allowing more time for task observations. Lead Indicators have
helped reduce risk exposures across all areas. This is particularly
evident by our continued lost time injury (LTI) free status, seeing us
now more than 5 years LTI free.
SHARING AND LEARNING
Grange adopts a philosophy of continuous learning and sharing
of safety experiences. In addition to its highly successful on-line
induction programs, Grange conducts an extensive range of on-site
safety training activities including extensive work permit training,
energy isolations, site driving and pit driving permits, simulation
training for new operators, fire warden and extinguisher training as
well as refreshers on occupational first aid and road accident rescue
entrapment release. Grange also continues to offer a very effective
online “Isolations” training package allowing our offsite contract
workforce to learn our systems before coming to site.
During 2022 Grange have introduced an “ICAM” (Incident Cause
Analysis Method) investigation process into the incident reporting
system. The change has also helped enhance the daily review of
incidents in our pre-shift meetings. This allows an effective view
of newly raised incidents, open investigations, recently closed
investigations and actions in progress from investigations.
During the year Grange continued to work closely and openly with
the Office of the Chief inspector of Mines (OCIM), traditionally our
company provide an outlet for GMIRM (Global Mining Industry Risk
Management training sponsored by the Chief inspector of Mines and
we have asked to recommence this interaction during 2023.
GMIRM has four levels of Risk Management training G1 for workers,
G2 for Supervisors, G3 for Management and G4 for Directors and
Senior Executives. Grange again ran two, week-long G3 forums
during 2022 and will continue GMIRM training in 2023
All G3 seminars were open to other Tasmanian Mines and Mining
contractors via the Tasmanian Minerals, Manufacturing and Energy
Council (TMEC) to actively promote risk management throughout
the industry.
In addition to training delivered at the operational level, the company
continued to reinforce many site-wide health and safety programs
aimed at improving our employee’s wellbeing, including cancer
awareness, heart safety awareness, respect at work and mental
health awareness/first aid.
During the year the HSE team have continued the deployment of the
three-year Strategic Plan for HSE, achieving excellent results across
the spectrum. The plan aims to consolidate safety improvements
and target areas of lesser performance with a focus on training and
safety leadership.
GRANGE RESOURCES ANNUAL REPORT 2022
this year the goals of the plan were actively progressed and the plan
and is supporting greater diversity in our teams.
is on track for a successful 3-year outcome. The effectiveness of our
systems and safety management in general is well demonstrated
by the consistent measurable improvement in our safety lag
• Strategic focus on “Critical Controls” further strengthens to our
risk management system and initiatives.
indicators. Targeted improvements in our lag indicators continue
Grange recognises the importance of our contractors’ safety
to be reinforced by a regime of measurable lead indicators to help
management systems being aligned with WorkSafe Tasmania and
reduce risk exposures.
During 2022 the company continued safety controls to manage the
impact of the global COVID-19 pandemic. The management of our
mine safety regulations as well as being on par with our own safety
standards. To this end we have incorporated and communicated
new OHS & ESR requirements for contractors into our SEMS.
controls prevented any business disruption and ensured the health
The enhancement of our Safety Preventative Maintenance work
safety and wellbeing of our employees, contractors and supported
orders continued through 2022 with lead indicators, dedicated
our community.
In addition, Grange is committed to ensuring compliance with
legislative requirements for each area of its operations including
meeting or exceeding requirements within:
• Federal & State Work Health & Safety Legislation
• Anti-Discrimination Legislation
• Fair Work Australia Legislation
• Rehabilitation & Workers Compensation Legislation
• Environmental Legislation
Area Inspections covering all areas on site, formalising Task
Observations for management and key personnel as Lead Indicator
Key Performance Indicators (KPI’s). The lead indicators have been
strengthened by the addition of specific “care and maintenance”
KPIs for underground workings.
Completion and tracking of lead indicators have moved to the
iAuditor system meaning a speedy and more efficient process and
allowing more time for task observations. Lead Indicators have
helped reduce risk exposures across all areas. This is particularly
evident by our continued lost time injury (LTI) free status, seeing us
now more than 5 years LTI free.
• Codes of Practice nominated in all Federal and State Legislation
SHARING AND LEARNING
• Adopting accepted industry & Australian Standards in areas
Grange adopts a philosophy of continuous learning and sharing
where legislation is deficient
• Whistleblower legislation
• Mining specific, HSE Legislation as required; and
• Environmental licence conditions for existing and new operations.
of safety experiences. In addition to its highly successful on-line
induction programs, Grange conducts an extensive range of on-site
safety training activities including extensive work permit training,
energy isolations, site driving and pit driving permits, simulation
training for new operators, fire warden and extinguisher training as
well as refreshers on occupational first aid and road accident rescue
Established systems are in place to ensure legislative requirements
entrapment release. Grange also continues to offer a very effective
are tracked, monitored and corrective actions implemented for any
online “Isolations” training package allowing our offsite contract
instances of non-compliance.
workforce to learn our systems before coming to site.
Grange continued the focus on reducing costs without reducing
During 2022 Grange have introduced an “ICAM” (Incident Cause
support services:
• Emergency Response Team (ERT) in-house training was further
developed, saving considerable costs, while maintaining a high
standard of response and continuing to develop our underground
rescue capability.
• The underground emergency refuge chambers and associated
ventilation and pumping equipment were monitored to maintain
compliance with industry standards and WST expectations.
Analysis Method) investigation process into the incident reporting
system. The change has also helped enhance the daily review of
incidents in our pre-shift meetings. This allows an effective view
of newly raised incidents, open investigations, recently closed
investigations and actions in progress from investigations.
During the year Grange continued to work closely and openly with
the Office of the Chief inspector of Mines (OCIM), traditionally our
company provide an outlet for GMIRM (Global Mining Industry Risk
Management training sponsored by the Chief inspector of Mines and
• Emergency response team size was managed while increasing
we have asked to recommence this interaction during 2023.
our general first aid training coverage has ensured we have
competent people where they are needed.
GMIRM has four levels of Risk Management training G1 for workers,
G2 for Supervisors, G3 for Management and G4 for Directors and
• Obtained Federal and State government training funds reducing
Senior Executives. Grange again ran two, week-long G3 forums
the outlay for training in leadership and continuous improvement
during 2022 and will continue GMIRM training in 2023
and seeking to provide an opportunity for additional young
workers to commence apprenticeships.
All G3 seminars were open to other Tasmanian Mines and Mining
contractors via the Tasmanian Minerals, Manufacturing and Energy
• The highwall scaling excavator continued development and
Council (TMEC) to actively promote risk management throughout
promises to provide a machine capable of restoring lost berm
the industry.
catch capacity in the mine, cleaning batters and improving
mining safety. It continues to generate industry wide interest.
In addition to training delivered at the operational level, the company
continued to reinforce many site-wide health and safety programs
• Participating in the Insurance Underwriters safety audit to
aimed at improving our employee’s wellbeing, including cancer
provide initiatives to help reduce insurance costs.
awareness, heart safety awareness, respect at work and mental
•
Investment in Mental Health and Wellbeing first aid training for
health awareness/first aid.
Management and Contact Officers has helped foster an alert and
During the year the HSE team have continued the deployment of the
caring worker relationship.
• Focus on gender diversity, respect at work and cultural
awareness has promoted the role of women in our workforce
three-year Strategic Plan for HSE, achieving excellent results across
the spectrum. The plan aims to consolidate safety improvements
and target areas of lesser performance with a focus on training and
safety leadership.
14
The Company has a fully functional and qualified emergency response team (“ERT”) providing expert first aid and first response care to our sites and others in need including road accidents in the Savage River and Port Latta areas. The company is a member of the Tasmanian Mines Emergency Response Committee (TMERC) and commits to providing assistance through Mutual Aid to other member sites as requested. COMMITMENT TO SOCIAL RESPONSIBILITYGrange continued with its commitment to social responsibility engaging with our stakeholders and communities to help us understand and respond to their interests and concerns. In addition to regular dialogue with neighbours and communities close to our operations, the Company continues to host and support the education sector through tours, school curriculum information, industry links, a graduate program as well as work opportunities at its operations. During 2022 we managed to allow a number of work experience students to have a week each on site and we hosted smaller size “socially distanced and monitored” school tours despite the threats of the COVID-19 pandemic. During the year our management and workers have actively participated in WorkSafe Tasmania (WST) workshops, helping to share our Safety Management approach with other industry participants. Our interactions with WST have been positive. The collaboration has been mutually beneficial and the inspectorate has also requested Grange participate in the review the Tasmanian “Mines Work Health & Safety (Supplementary Requirements) Regulations 2012 during 2023. 15GRANGE RESOURCES ANNUAL REPORT 2022
ENVIRONMENTAL
LEGISLATIVE APPROVAL
Grange obtained environmental and planning approval in 1996 and
1997 allowing it to operate under the Tasmanian Land Use Planning
and Approvals Act 1993 (LUPA), the Tasmanian Environmental
Management and Pollution Control Act 1994 (EMPCA), the Tasmanian
Goldamere Pty Ltd (Agreement) Act 1996 (Goldamere Act) and the
Tasmanian Mineral Resources Development Act 1995. This approval
covers an expected mine and processing life using open-cut mining
at Savage River, gangue removal and concentrating at Savage River
and pelletising at Port Latta.
During 2014 Grange received relevant approvals for the South
Deposit Tailings Storage Facility. Grange obtained approval to
construct an underground exploration drive and a portal to allow
exploration of the North Pit ore body at depth in 2019 and continues
to progress approval to mine the ore using underground mining
through the North Pit Underground project (NPUG). Grange
received planning approval from the Waratah Wynyard Council and
the Tasmanian Environment Protection Authority for the Centre Pit
Expansion and South Deposit Backfill Dump through DA 216/2021
and Permit Conditions-Environmental No. 10995 in 2022.
GOLDAMERE ACT
The Goldamere Act makes provisions for Grange’s operation in
Tasmanian legislation. The Goldamere Act limits Grange’s liability
for remediation of contamination, under Tasmanian law, to damage
caused by Grange’s operations, and indemnifies Grange for certain
environmental liabilities arising from past operations. Where
pollution is caused or might be caused by previous operations
and that pollution may be impacting on Grange’s operations or
discharges, Grange is indemnified against that pollution. Grange is
required to operate to Best Practice Environmental Management
(BPEM).
PLANNING APPROVALS
Grange obtained planning approval subject to a series of
environmental permit conditions on 29 January 1997. Planning
approval was issued by the Waratah Wynyard Council for Savage
River and by the Circular Head Council for Port Latta. The approvals
were conditional on the provision of an Environmental Management
Plan (EMP) incorporating an Environmental Rehabilitation Plan
(ERP) prior to the commencement of operations. Various other
studies were also required.
Grange received planning approvals from the Waratah Wynyard
Council for the South Deposit Tailings Storage Facility (SDTSF)
during 2014, construction commenced in July 2014 and operation
commenced in Q4 2018.
Full approval of the Centre Pit Expansion and South Deposit Backfill
Dump was achieved in 2022.
Grange is actively working with contractors and the Tasmanian EPA
on the planning and environmental approvals of the NPUG Project
with submission of an Environmental Impact Statement (EIS)
planned for 2023.
Grange continued through 2022 to implement approved upgrades
to the Port Latta Pelletising Plant including the refurbishment of
Furnace Line 4.
16
ENVIRONMENTAL MANAGEMENT PLANS
The EMP incorporating the ERP and study results were approved by
the (then) Department of Environment Parks, Heritage and the Arts
and operations commenced in October 1997. The latest revision
of the approval documents occurred on 6 October 2000 when
Environmental Protection Notices (EPN) 248/2 and 302/2 were
issued to replace the environmental permit conditions for Savage
River and Port Latta respectively.
Approvals are required from the Tasmanian EPA and relevant
Councils for major infrastructure developments and operational
expansions and changes. These approvals are in the form of
development applications, planning permits, approved EPN’s and
or amendments and reflect changing operational circumstances,
an increasing knowledge base and include approvals designed
to extend operations, amend management plans and provide for
changes to waste rock dumping plans and any proposed treatment
facilities. Such amendments are enacted by the issue of planning
permits, EPN’s or Permit Conditions Environmental (PCE)’s.
An amendment to the EMP was approved for an extension of mine
and pelletising operations In early 2007 to approve the Mine Life
Extension Plan.
EMP and ERP reviews are submitted on a 3-yearly basis. Revised
EMPs reflect BPEM and current mine planning and focus on closure
requirements and rehabilitation. A new EMP was submitted to the
EPA in 2022 with the current ERP due for review in 2023.
The Tasmanian EPA issued EPN 10006/1 in November 2018,
enabling the construction of the Exploration Decline for the North
Pit Underground Project.
GOLDAMERE AGREEMENT
The Goldamere Agreement (which forms part of the Goldamere
Act) provides a framework for Grange to repay the Tasmanian
Government for the purchase of the mine through remediation
works. A significant variation to the Goldamere Agreement was
signed on the 19 December 2014 which extends the Agreement until
24 December 2034. This variation also removed a significant number
of redundant conditions. The amended Goldamere Agreement
provides a framework for Grange to co-manage the Savage River
Rehabilitation Project (SRRP) and carry out contracted works in lieu
of paying the purchase price of the operation to the Government.
The agreement also allows Grange to integrate its rehabilitation
obligations with those of the State under the SRRP.
SAVAGE RIVER REHABILITATION PROJECT
(“SRRP”)
Grange representatives meet with representatives from DPIPWE
on a regular basis to develop and implement remediation works
at Savage River. Grange has contracted with the SRRP for works
including construction, management and development of waste rock
dump covers, acid pipelines and other remediation projects. The
SRRP objective is to capture and treat 65% of the site’s copper load
to remove the possibility of an acutely toxic aquatic environment.
The scope of works to meet this objective has been completed and
costed to feasibility level.
A strategic plan outlining the works required to achieve the objective
and repay Grange’s purchase price debt has been approved by
the Tasmanian Environmental Protection Authority and is being
implemented by the SRRP Committee. This plan is updated annually
to reflect the long-term risks and Grange’s latest mining plan.
Major projects undertaken by the SRRP and Grange during 2022
include final works on the OTD Collection Bund and Transfer
Scheme transferring AMD from the OTD around the MCTD, the OTD
GRANGE RESOURCES ANNUAL REPORT 2022
ENVIRONMENTAL
LEGISLATIVE APPROVAL
Grange obtained environmental and planning approval in 1996 and
1997 allowing it to operate under the Tasmanian Land Use Planning
and Approvals Act 1993 (LUPA), the Tasmanian Environmental
Management and Pollution Control Act 1994 (EMPCA), the Tasmanian
Goldamere Pty Ltd (Agreement) Act 1996 (Goldamere Act) and the
Tasmanian Mineral Resources Development Act 1995. This approval
covers an expected mine and processing life using open-cut mining
at Savage River, gangue removal and concentrating at Savage River
and pelletising at Port Latta.
During 2014 Grange received relevant approvals for the South
Deposit Tailings Storage Facility. Grange obtained approval to
construct an underground exploration drive and a portal to allow
exploration of the North Pit ore body at depth in 2019 and continues
to progress approval to mine the ore using underground mining
through the North Pit Underground project (NPUG). Grange
received planning approval from the Waratah Wynyard Council and
the Tasmanian Environment Protection Authority for the Centre Pit
Expansion and South Deposit Backfill Dump through DA 216/2021
and Permit Conditions-Environmental No. 10995 in 2022.
GOLDAMERE ACT
The Goldamere Act makes provisions for Grange’s operation in
Tasmanian legislation. The Goldamere Act limits Grange’s liability
for remediation of contamination, under Tasmanian law, to damage
caused by Grange’s operations, and indemnifies Grange for certain
environmental liabilities arising from past operations. Where
pollution is caused or might be caused by previous operations
and that pollution may be impacting on Grange’s operations or
discharges, Grange is indemnified against that pollution. Grange is
required to operate to Best Practice Environmental Management
(BPEM).
PLANNING APPROVALS
Grange obtained planning approval subject to a series of
environmental permit conditions on 29 January 1997. Planning
approval was issued by the Waratah Wynyard Council for Savage
River and by the Circular Head Council for Port Latta. The approvals
were conditional on the provision of an Environmental Management
Plan (EMP) incorporating an Environmental Rehabilitation Plan
(ERP) prior to the commencement of operations. Various other
studies were also required.
Grange received planning approvals from the Waratah Wynyard
Council for the South Deposit Tailings Storage Facility (SDTSF)
during 2014, construction commenced in July 2014 and operation
commenced in Q4 2018.
Full approval of the Centre Pit Expansion and South Deposit Backfill
Dump was achieved in 2022.
Grange is actively working with contractors and the Tasmanian EPA
on the planning and environmental approvals of the NPUG Project
with submission of an Environmental Impact Statement (EIS)
planned for 2023.
Furnace Line 4.
Grange continued through 2022 to implement approved upgrades
to the Port Latta Pelletising Plant including the refurbishment of
16
ENVIRONMENTAL MANAGEMENT PLANS
The EMP incorporating the ERP and study results were approved by
the (then) Department of Environment Parks, Heritage and the Arts
and operations commenced in October 1997. The latest revision
of the approval documents occurred on 6 October 2000 when
Environmental Protection Notices (EPN) 248/2 and 302/2 were
issued to replace the environmental permit conditions for Savage
River and Port Latta respectively.
Approvals are required from the Tasmanian EPA and relevant
Councils for major infrastructure developments and operational
expansions and changes. These approvals are in the form of
development applications, planning permits, approved EPN’s and
or amendments and reflect changing operational circumstances,
an increasing knowledge base and include approvals designed
to extend operations, amend management plans and provide for
changes to waste rock dumping plans and any proposed treatment
facilities. Such amendments are enacted by the issue of planning
permits, EPN’s or Permit Conditions Environmental (PCE)’s.
An amendment to the EMP was approved for an extension of mine
and pelletising operations In early 2007 to approve the Mine Life
Extension Plan.
EMP and ERP reviews are submitted on a 3-yearly basis. Revised
EMPs reflect BPEM and current mine planning and focus on closure
requirements and rehabilitation. A new EMP was submitted to the
EPA in 2022 with the current ERP due for review in 2023.
The Tasmanian EPA issued EPN 10006/1 in November 2018,
enabling the construction of the Exploration Decline for the North
Pit Underground Project.
GOLDAMERE AGREEMENT
The Goldamere Agreement (which forms part of the Goldamere
Act) provides a framework for Grange to repay the Tasmanian
Government for the purchase of the mine through remediation
works. A significant variation to the Goldamere Agreement was
signed on the 19 December 2014 which extends the Agreement until
24 December 2034. This variation also removed a significant number
of redundant conditions. The amended Goldamere Agreement
provides a framework for Grange to co-manage the Savage River
Rehabilitation Project (SRRP) and carry out contracted works in lieu
of paying the purchase price of the operation to the Government.
The agreement also allows Grange to integrate its rehabilitation
obligations with those of the State under the SRRP.
SAVAGE RIVER REHABILITATION PROJECT
(“SRRP”)
Grange representatives meet with representatives from DPIPWE
on a regular basis to develop and implement remediation works
at Savage River. Grange has contracted with the SRRP for works
including construction, management and development of waste rock
dump covers, acid pipelines and other remediation projects. The
SRRP objective is to capture and treat 65% of the site’s copper load
to remove the possibility of an acutely toxic aquatic environment.
The scope of works to meet this objective has been completed and
costed to feasibility level.
A strategic plan outlining the works required to achieve the objective
and repay Grange’s purchase price debt has been approved by
the Tasmanian Environmental Protection Authority and is being
implemented by the SRRP Committee. This plan is updated annually
to reflect the long-term risks and Grange’s latest mining plan.
Major projects undertaken by the SRRP and Grange during 2022
include final works on the OTD Collection Bund and Transfer
Scheme transferring AMD from the OTD around the MCTD, the OTD
Cobalt Project, exploring possible Cobalt recovery and Sulphur removal from the OTD and resultant remediation and a stability assessment of the OTD. Planning for an extensive study of the neutralising capacity of South Lens was commenced in 2022.PRINCIPAL ENVIRONMENTAL ISSUESWASTE ROCK, TAILINGS AND WATER MANAGEMENT – SAVAGE RIVER• Water, tailings and waste rock management at Savage River, including: development of waste rock dumps which exclude oxygen to minimise the formation of acid mine drainage and utilisation of these dumps to form seals on old waste rock dumps; subaqueous tailings deposition and maintenance of saturated tailings; providing a centralised water treatment system using a disused pit to eliminate turbidity from mine runoff. Appropriate management and monitoring systems are in place to ensure regulatory compliance in these areas. • Grange continued to progress design and construction work for the Main Creek Tails Dam closure during 2022. It is expected that the closure process will take approximately two more years subject to buttress requirements.AIR EMISSIONS REDUCTION PROGRAM – PORT LATTA• Grange continued to work on quality and measurement systems to improve performance of the Port Latta operations especially with regard to air emissions. In particular, the focus is on the stable operation of furnaces.REHABILITATION PLANSGrange continues to plan for closure and departure on completion of the mining plan. Principal issues in respect of closure include waste rock dump maintenance, tailings management, future use of infrastructure and a five-year monitoring and maintenance plan.17ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) METRICSDevelopments in global markets for directing investment capital have shifted with traditional profit only focus being challenged when assessing companies’ performance. Grange is committed to aligning the business, where applicable, to the sustainable development goals that provide a roadmap to sustainability and resilience. Grange has adopted an Environmental, Social, and Governance (ESG) framework with 21 core metrics and disclosures as created by the World Economic Forum (WEF) and is establishing an impact measurement plan for each sustainability area which includes, but is not limited to, governance, anti-corruption practices, ethical behaviour, human rights, carbon emissions, land use, ecological sensitivity, water consumption, diversity and inclusion, pay equality and tax payments.ESG REPORTING UPDATESReview across our management systems have occurred through 2022 to map across process and reporting improvements to align to the ESG core metrics. This resulted in Grange publishing the baseline environmental, Social, and Governance (ESG) report in August 2022 and made disclosures on 21 core metrics set by the World Economic Forum (WEF) in its standardised and globally recognised stakeholder Capitalism Metrics ESG framework.The baseline report demonstrates Grange’s commitment to aligning the business, where applicable, to the sustainable development goals provide guidance to sustainability and resilience. The report describes the progress Grange has made against the four pillars of the framework for Governance, Planet, People and Prosperity.Most notably, Grange has developed a road map to reduce emissions. This will involve the reduction in energy used per tonne of product; upgrades to furnaces; recovery of heat in the pellet plant; application of technology and electric vehicles in the mining operation; and alternative fuel sources.18GRANGE RESOURCES ANNUAL REPORT 2022The Board has endorsed the pursuit of decarbonisation of Grange’s Business with specific targets for CO2-e reduction including:• The elimination of non-renewable coal sources like anthracite, by 2025.• CO2-e emission target reduction of 50% by 2030 reducing emissions to 53kg of CO2-e per tonne of iron ore products.• Target of Zero CO2-e (Scope 1 and 2) emissions by 2035.Grange have also reviewed and updated policies with regard to anti-slavery and anti-bribery and corruption. Grange recognises that our activities can have an impact on human rights locally as well as overseas. We recognise the need to continually assess the Company’s effectiveness in identifying, assessing and responding to potential areas of risk regarding modern slavery and unfair practices in its procurement processes. Grange does not tolerate any form of modern slavery, including forced or compulsory labour and is committed to operating in a transparent, responsible and fair manner throughout our procurement and business processes.19ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) METRICSDevelopments in global markets for directing investment capital have shifted with traditional profit only focus being challenged when assessing companies’ performance. Grange is committed to aligning the business, where applicable, to the sustainable development goals that provide a roadmap to sustainability and resilience. Grange has adopted an Environmental, Social, and Governance (ESG) framework with 21 core metrics and disclosures as created by the World Economic Forum (WEF) and is establishing an impact measurement plan for each sustainability area which includes, but is not limited to, governance, anti-corruption practices, ethical behaviour, human rights, carbon emissions, land use, ecological sensitivity, water consumption, diversity and inclusion, pay equality and tax payments.ESG REPORTING UPDATESReview across our management systems have occurred through 2022 to map across process and reporting improvements to align to the ESG core metrics. This resulted in Grange publishing the baseline environmental, Social, and Governance (ESG) report in August 2022 and made disclosures on 21 core metrics set by the World Economic Forum (WEF) in its standardised and globally recognised stakeholder Capitalism Metrics ESG framework.The baseline report demonstrates Grange’s commitment to aligning the business, where applicable, to the sustainable development goals provide guidance to sustainability and resilience. The report describes the progress Grange has made against the four pillars of the framework for Governance, Planet, People and Prosperity.Most notably, Grange has developed a road map to reduce emissions. This will involve the reduction in energy used per tonne of product; upgrades to furnaces; recovery of heat in the pellet plant; application of technology and electric vehicles in the mining operation; and alternative fuel sources.18GRANGE RESOURCES ANNUAL REPORT 2022GRANGE RESOURCES ANNUAL REPORT 2022
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project (“Southdown” or “the Project”),
situated 90km from the city of Albany in Western Australia, is a joint
venture between Grange (70%) and SRT Australia Pty Ltd (SRT)
(30%). SRT is jointly owned by Sojitz Corporation and Kobe Steel.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT to reacquire SRT’s 30 per cent
interest in the Project. The transaction is expected to complete in
Q2, 2023. Upon completion, Grange will hold 100 per cent ownership
in the Project.
WORKING WITH THE COMMUNITY
Planning and preparation for the Southdown project has spanned
several years, during which Grange has established a project
office in Albany and has been working closely with key stakeholder
organisations and community members.
Grange will continue to engage stakeholders and the community as
the project progresses through the Albany Project Office, information
sessions, landowner discussions, briefings and presentations and a
range of focused communications.
PROJECT OVERVIEW
Southdown is an advanced project with over 1.2 billion tonnes of
high-quality mineral resources, including 388 million tonnes of ore
reserves. It has access to established infrastructure and involves
the construction and operation of an open pit magnetite mine located
approximately 90 kilometres northeast of Albany, and 10 kilometres
southwest of Wellstead in the Great Southern region of Western
Australia. The Southdown magnetite deposit is approximately 12
kilometres in length with 6 kilometres of this included in the current
study. The magnetite ore will be mined, crushed, ground, screened
and magnetically separated to produce a magnetite concentrate.
With an initial mine life of 28 years, it is anticipated that around 5 Mt
of magnetite concentrate will be exported to international markets
each year.
PROJECT STATUS
In addition to a Definitive Feasibility Study completed in 2012 on
a 10 million tonne per annum (mtpa) case, Grange completed an
updated prefeasibility study (PFS) in the first quarter of 2022 (See
ASX announced on 22 March 2022). This updated PFS has optimised
the project layout and equipment. This involves a smaller 5mtpa
concentrate production operation within the constraints of existing
mineral resources and ore reserves. During 2022, the Company
commenced a Definitive Feasibility Study on the 5 mtpa development
case and is further progressing designs for the optimised site layout,
mine designs, metallurgical test work and pilot plant trials utilising
dry grinding techniques, and port operations and transhipping
methodology.
APPROVALS
The optimised project has remained largely within the area that
has already obtained environmental approvals for development.
Previously, Southdown has been granted primary environmental
approvals by the Western Australian government under the
Environmental Protection Act 1986 (EP Act) and by the federal
government under the Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act). Under the optimised project there
are some modifications to the project that require further approvals
and work is progressing to obtain environmental approvals for
these aspects of the project.
Grange Resources’ referral for modifications to the already approved
Southdown Magnetite Project was submitted on 30 January 2023
to the Environmental Protection Authority (EPA) for environmental
assessment. A new environmental approval will also be sought for
the transhipping component of the project by the Southern Ports
Authority.
KEY COMPONENTS OF THE PROJECT
The Southdown Magnetite Project is proposed to be a pit to port
operation involving:
· The construction and operation of an open cut magnetite mine
and concentrator for producing magnetite concentrate at the
mine site, near Wellstead.
· A 110km underground slurry pipeline to transport the magnetite
concentrate from the mine site to the Port of Albany.
· Once the slurry reaches the Port, it will be dewatered and stored
in a storage shed ready for shipping.
· The recycled water from the dewatering process will be pumped
back to the mine site in a second pipeline following the same
alignment as the slurry pipeline.
· When the concentrate is ready for shipping, it will be loaded
on to a smaller transhipping vessel (TSV) via conveyors and
a shiploader and transported by the TSV to be loaded onto
larger vessels in King George Sound. This process is known as
transhipping.
· Water for the construction and operation of the mine is anticipated
to be sourced from a mix of recycled wastewater from the Water
Corporation’s Wastewater Treatment Plant and groundwater
from local borefields.
· Electricity supply options for the project continue to focus on
maximising access to renewable energy.
PROJECT OVERVIEW
GEOLOGY
The currently defined Resource extends over 11 kilometres of strike,
with variable depths ranging from 50 metres below surface in the
west to 555 metres below surface in the east. The deposit has been
drilled and evaluated since its initial discovery in 1983, including an
extensive program of resource drilling during 2011 for the feasibility
study.
MINING
Mining will be undertaken as a conventional drill, blast, load and
haul cycle. Bulk loading on 12 metre benches will utilise 600-tonne
hydraulic face shovels. Ore and some surrounding waste will be
selectively mined on multiple flitches with 400-tonne hydraulic
excavators. All pit material with be hauled with 220-tonne capacity
rear dump trucks. Ore will be trucked directly from the blasted faces
to either direct tip into the primary crusher or to the ROM stockpile
with waste either sent to WRDs or backfill.
The mining operation will draw heavily on Grange’s existing capability
as Australia’s most experienced commercial producer of magnetite
concentrate, to assist with start-up and ongoing operations.
20
GRANGE RESOURCES ANNUAL REPORT 2022
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project (“Southdown” or “the Project”),
situated 90km from the city of Albany in Western Australia, is a joint
venture between Grange (70%) and SRT Australia Pty Ltd (SRT)
(30%). SRT is jointly owned by Sojitz Corporation and Kobe Steel.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT to reacquire SRT’s 30 per cent
interest in the Project. The transaction is expected to complete in
Q2, 2023. Upon completion, Grange will hold 100 per cent ownership
in the Project.
PROJECT OVERVIEW
Southdown is an advanced project with over 1.2 billion tonnes of
high-quality mineral resources, including 388 million tonnes of ore
reserves. It has access to established infrastructure and involves
the construction and operation of an open pit magnetite mine located
approximately 90 kilometres northeast of Albany, and 10 kilometres
southwest of Wellstead in the Great Southern region of Western
Australia. The Southdown magnetite deposit is approximately 12
kilometres in length with 6 kilometres of this included in the current
study. The magnetite ore will be mined, crushed, ground, screened
and magnetically separated to produce a magnetite concentrate.
With an initial mine life of 28 years, it is anticipated that around 5 Mt
of magnetite concentrate will be exported to international markets
each year.
PROJECT STATUS
In addition to a Definitive Feasibility Study completed in 2012 on
a 10 million tonne per annum (mtpa) case, Grange completed an
updated prefeasibility study (PFS) in the first quarter of 2022 (See
ASX announced on 22 March 2022). This updated PFS has optimised
the project layout and equipment. This involves a smaller 5mtpa
concentrate production operation within the constraints of existing
mineral resources and ore reserves. During 2022, the Company
commenced a Definitive Feasibility Study on the 5 mtpa development
case and is further progressing designs for the optimised site layout,
mine designs, metallurgical test work and pilot plant trials utilising
dry grinding techniques, and port operations and transhipping
methodology.
APPROVALS
The optimised project has remained largely within the area that
has already obtained environmental approvals for development.
Previously, Southdown has been granted primary environmental
approvals by the Western Australian government under the
Environmental Protection Act 1986 (EP Act) and by the federal
government under the Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act). Under the optimised project there
are some modifications to the project that require further approvals
and work is progressing to obtain environmental approvals for
these aspects of the project.
Grange Resources’ referral for modifications to the already approved
Southdown Magnetite Project was submitted on 30 January 2023
to the Environmental Protection Authority (EPA) for environmental
assessment. A new environmental approval will also be sought for
the transhipping component of the project by the Southern Ports
Authority.
WORKING WITH THE COMMUNITY
Planning and preparation for the Southdown project has spanned
several years, during which Grange has established a project
office in Albany and has been working closely with key stakeholder
organisations and community members.
Grange will continue to engage stakeholders and the community as
the project progresses through the Albany Project Office, information
sessions, landowner discussions, briefings and presentations and a
range of focused communications.
KEY COMPONENTS OF THE PROJECT
The Southdown Magnetite Project is proposed to be a pit to port
operation involving:
· The construction and operation of an open cut magnetite mine
and concentrator for producing magnetite concentrate at the
mine site, near Wellstead.
· A 110km underground slurry pipeline to transport the magnetite
concentrate from the mine site to the Port of Albany.
· Once the slurry reaches the Port, it will be dewatered and stored
in a storage shed ready for shipping.
· The recycled water from the dewatering process will be pumped
back to the mine site in a second pipeline following the same
alignment as the slurry pipeline.
· When the concentrate is ready for shipping, it will be loaded
on to a smaller transhipping vessel (TSV) via conveyors and
a shiploader and transported by the TSV to be loaded onto
larger vessels in King George Sound. This process is known as
transhipping.
· Water for the construction and operation of the mine is anticipated
to be sourced from a mix of recycled wastewater from the Water
Corporation’s Wastewater Treatment Plant and groundwater
from local borefields.
· Electricity supply options for the project continue to focus on
maximising access to renewable energy.
PROJECT OVERVIEW
GEOLOGY
The currently defined Resource extends over 11 kilometres of strike,
with variable depths ranging from 50 metres below surface in the
west to 555 metres below surface in the east. The deposit has been
drilled and evaluated since its initial discovery in 1983, including an
extensive program of resource drilling during 2011 for the feasibility
study.
MINING
Mining will be undertaken as a conventional drill, blast, load and
haul cycle. Bulk loading on 12 metre benches will utilise 600-tonne
hydraulic face shovels. Ore and some surrounding waste will be
selectively mined on multiple flitches with 400-tonne hydraulic
excavators. All pit material with be hauled with 220-tonne capacity
rear dump trucks. Ore will be trucked directly from the blasted faces
to either direct tip into the primary crusher or to the ROM stockpile
with waste either sent to WRDs or backfill.
The mining operation will draw heavily on Grange’s existing capability
as Australia’s most experienced commercial producer of magnetite
concentrate, to assist with start-up and ongoing operations.
ORE CRUSHING AND CONCENTRATION
Ore processing at the mine site consists of crushing and dry
grinding with closed circuit dry magnetic separation, before water
is added to facilitate a further series of magnetic separation steps
to remove non-magnetic material, and reverse floatation to remove
the sulphide mineral Pyrrhotite, which will result in a magnetite
concentrate at around 69.5% iron.
Process waste (tailings) will be produced in dry and wet components,
with the wet tailings mixed with the dry to form an Agglomerated
Tailing and sent to the waste rock dump.
TRANSPORTING THE CONCENTRATE SLURRY
110 KM TO THE PORT
Final magnetite concentrate will be thickened and transported
through a 110 km pipeline to the Port of Albany. Once the
concentrate reaches the Port, it will be filtered and stored ready for
shipping. The excess water will be pumped back to the mine site in
a return water pipeline, which runs parallel to the slurry pipeline.
Around 85% of water pumped with the slurry will be returned to the
mine site for re-use.
The entire length of the pipeline will be buried underground except
a small section that may be exposed to accommodate a walkway/
cycleway over Pt Melville, on the edge of Princess Royal Harbour.
ALBANY PORT
The study has adopted a transhipping methodology with reduced
on-site storage capacity at the Port of Albany. It incorporates the
addition of a new wharf at Albany Port’s Berth 5, a filtration plant, a
concentrate stockpile shed and a ship loading facility. The magnetite
concentrate will be loaded onto a Transhipment Vessel (TSV) and
barged to the larger Cape sized vessels located at an anchorage
point in the King George Sound.
Detailed technical and environmental assessments have been
undertaken to assess the potential landside and waterside
impacts of transhipping in conjunction with the Southern Ports
Authority to identify an appropriate anchorage point, and assess
the environmental, community and visual impacts to facilitate new
environmental and operational approvals.
WATER
With the introduction of dry grinding and a reduced capacity in the
concentrator, the annual make-up water demand has reduced to
approximately 4 gigalitres per year. This can be supplied from a
combination of recycled water from the Water Corporations Albany
waste-water treatment facilities and various potential groundwater
sources in the region. Ground water sources are deep in the
sequence, below a clay layer which will restrict any significant
impact on the surface water table or other users.
Specialised groundwater consultants, Rockwater and GHD, have
been engaged to complete thorough technical and environmental
investigations to understand the groundwater resources in the
region. Each area has been investigated by geological mapping,
geophysics, the drilling of monitoring and test production bores, and
undertaking test pumping to understand the hydraulic properties of
the target aquifer. To date over 150 bores have been drilled for more
than 11,000 metres of drilling. This data has been used to develop
groundwater models to run predictions of water level change and,
together with the environmental baseline studies, provide the
basis for environmental impact assessments and approvals. The
investigations have indicated up to 3.5GL/a can be obtained from
both borefields without adverse effects to native vegetation and
other beneficial users.
POWER
In 2011, Western Power had identified and agreed a transmission line
route for the Project which is covered in the existing EPBC approval
currently in place. Works are ongoing along the transmission
line route, including environmental surveys and assessments,
and landholder and other stakeholder consultation. Supply and
connection options for the project continue to focus on maximising
access to renewable energy.
OPERATIONS
The project is committed to working with stakeholders and the
community in the planning, implementation and operation of its
projects as well as delivering possible future community benefits
including employing local people to work and service the mine,
supporting local and regional economic development and investing
in community initiatives. The Southdown operation will be modelled
on Grange’s existing Savage River operation in Tasmania operating
on a 24/7 basis for 365 days per year.
We acknowledge the Noongar Menang people as traditional
custodians of this region and recognise their continuing connection
to land, water and culture. We pay our respects to Aboriginal
communities and cultures, and to their Elders past, present and
emerging.
MINERAL RESOURCES AND
ORE RESERVES
- SOUTHDOWN MAGNETITE
PROJECT
MINERAL RESOURCES
The Mineral Resource estimate for the Southdown Magnetite Project
as at 31 December 2022 is as follows:
Measured
Indicated
Inferred
Total
As at December 2022
Tonnes (Mt)
Grade %DTR*
423.0
86.8
747.1
1,256.9
37.8
38.7
30.9
33.7
* Davis Tube Recovery – a measure of recoverable magnetite
Mineral Resources are reported above a cut-off of 10% DTR
ORE RESERVES
The current Ore Reserve for the Southdown Magnetite Project as at
31 December 2022 is based on the pit design and mining schedule
developed during the Feasibility Study and includes modifying
metallurgical factors and plant recovery.
Proven
Probable
ROM (Mt)
DTR* (%)
384.6
3.1
35.6
41.7
Total
387.7
An additional 24.4 Mt of Inferred Resources is included within the
designed pit.
35.6
A detailed statement of the Mineral Resources and Ore Reserves can
be found in the ASX announcement dated 28 February 2014. Grange
confirms in reproducing the Mineral Resources and Ore Reserves in
this subsequent report, that it is not aware of any new information
or data that materially affects the information included, and all the
material assumptions and technical parameters underpinning the
estimates in this report continue to apply and have not materially
changed. Grange confirms that all environmental approvals and
tenure have been maintained in compliance and terms extended as
required to retain currency.
20
21
CORPORATE
GOVERNANCE
STATEMENT
Grange is committed to creating and building sustainable value for shareholders and protecting stakeholder interests. The Company
recognises that high standards of corporate governance are essential to achieving that objective.
The Board has the responsibility for ensuring Grange is properly managed so as to protect and enhance shareholders’ interests in a manner
that is consistent with the Company’s responsibility to meet its obligations to all stakeholders. For this reason, the Board is committed to
applying appropriate standards of corporate governance across the organisation.
As part of its commitment to enhancing its corporate governance, and as a listed company, the Board has adopted relevant practices
which are consistent with the Australian Securities Exchange (“ASX”) Corporate Governance Principles. The 2022 corporate governance
statement was approved by the Board in February 2023.
Details of the Company’s corporate governance practices are included in the Corporate Governance Statement and Appendix 4G which
have been announced on the ASX and can be located on our Company’s website www.grangeresources.com.au on the Investors page. This
facilitates transparency about Grange’s corporate governance practices and assists shareholders and other stakeholders make informed
judgments.
Grange considers that its governance practices comply with the majority of the ASX Best Practice Recommendations.
ASX BEST PRACTICE RECOMMENDATIONS
The following table lists the departures from the ASX Best Practice Recommendations applicable to the Company as at the date of its
financial year end, being 31 December 2022. Where the Company considers that it is divergent from these recommendations, or that it is
not practical to comply, there is an explanation of the Company’s reasons set out in the following table.
“Recommendation” Ref
(“Principle No” Ref followed by
Recommendation Ref)
7.3(a)
Departure
Explanation
A separate internal audit function has not
been formed.
An Internal Audit function has not been
established as per recommendation
7.3(a), The Board monitors the need for an
internal audit function having regard to the
size, geographic location and complexity of
the Company’s operations.
The Company’s Management periodically
undertakes an internal review of financial
systems and processes and where systems
are considered to require improvement
these systems are developed. The Board
also considers external reviews of specific
areas and monitors the implementation of
system improvements.
22
CORPORATE
GOVERNANCE
STATEMENT
Grange is committed to creating and building sustainable value for shareholders and protecting stakeholder interests. The Company
recognises that high standards of corporate governance are essential to achieving that objective.
The Board has the responsibility for ensuring Grange is properly managed so as to protect and enhance shareholders’ interests in a manner
that is consistent with the Company’s responsibility to meet its obligations to all stakeholders. For this reason, the Board is committed to
applying appropriate standards of corporate governance across the organisation.
As part of its commitment to enhancing its corporate governance, and as a listed company, the Board has adopted relevant practices
which are consistent with the Australian Securities Exchange (“ASX”) Corporate Governance Principles. The 2022 corporate governance
statement was approved by the Board in February 2023.
Details of the Company’s corporate governance practices are included in the Corporate Governance Statement and Appendix 4G which
have been announced on the ASX and can be located on our Company’s website www.grangeresources.com.au on the Investors page. This
facilitates transparency about Grange’s corporate governance practices and assists shareholders and other stakeholders make informed
judgments.
Grange considers that its governance practices comply with the majority of the ASX Best Practice Recommendations.
ASX BEST PRACTICE RECOMMENDATIONS
The following table lists the departures from the ASX Best Practice Recommendations applicable to the Company as at the date of its
financial year end, being 31 December 2022. Where the Company considers that it is divergent from these recommendations, or that it is
not practical to comply, there is an explanation of the Company’s reasons set out in the following table.
(“Principle No” Ref followed by
Departure
Explanation
“Recommendation” Ref
Recommendation Ref)
7.3(a)
A separate internal audit function has not
An Internal Audit function has not been
been formed.
established as per recommendation
7.3(a), The Board monitors the need for an
internal audit function having regard to the
size, geographic location and complexity of
the Company’s operations.
The Company’s Management periodically
undertakes an internal review of financial
systems and processes and where systems
are considered to require improvement
these systems are developed. The Board
also considers external reviews of specific
areas and monitors the implementation of
system improvements.
22
23
GRANGE RESOURCES ANNUAL REPORT 2022
24
GRANGE RESOURCES ANNUAL REPORT 2022
24
GRANGE RESOURCES LIMITEDABN 80 009 132 405AND CONTROLLED ENTITIESAUSTRALIA’S MOST EXPERIENCED MAGNETITE PRODUCERFINANCIAL REPORTFor the Year Ended 31 December 2022DIRECTORS’ REPORT 26AUDITOR’S INDEPENDENCE DECLARATION 40CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 42CONSOLIDATED STATEMENT OF FINANCIAL POSITION 43CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 44CONSOLIDATED STATEMENT OF CASH FLOWS 45NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 47DIRECTORS’ DECLARATION 71INDEPENDENT AUDITOR’S REPORT TO THE 72 MEMBERS OF GRANGE RESOURCES LIMITEDGENERAL INFORMATIONThe financial statements cover Grange Resources Limited as a Group consisting of Grange Resources Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Grange Resources Limited’s functional and presentation currency.Grange Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:34a Alexander Street, Burnie, Tasmania A description of the nature of the Group’s operations and its principal activities are included in the directors’ report, which is not part of the financial statements.The financial statements were authorised for issue, in accordance with a resolution of directors, on 24 February 2023. The directors have the power to amend and reissue the financial statements. 25FINANCIAL REPORT
INFORMATION ON DIRECTORSMICHELLE LI PHD, GAICD Independent Non-executive Chairperson, Member of the Audit and Risk Committee, Member of the Remuneration and Nomination Committee. Dr Li has more than 30 years of international mining experience, including senior executive roles with mining companies such as Citic Pacific, Rio Tinto and Iluka Resources. Dr Li has a PhD from the University of Queensland and was previously a non-executive Director of Ardiden Limited, Orion Metals Limited and Sherwin Iron Limited. YAN JIA GAICDNon-executive Deputy Chairperson Ms Jia is currently the Director of the Administration Department with the Jiangsu Shagang International Trade Co Ltd, a subsidiary of Jiangsu Shagang Group, China’s largest private steel company. Ms Jia has over ten years’ experience of managerial, human resources, intellectual property and commercial experience in the steel industry and bulk raw material transaction sector. HONGLIN ZHAO Managing Director, Chief Executive Officer Mr Zhao is a former Director of Shagang International (Australia) Pty Ltd, former Director and General Manager of Shagang (Australia) Pty Ltd, and former Director of Jiangsu Shagang Group, ultimate shareholder of Shagang International Holdings Limited and China’s largest private steel company. Mr Zhao has over 40 years’ experience in the industry and was previously the Commander of Project Development Headquarters with Shagang. Mr Zhao has extensive project management and implementation experience and expertise. DIRECTORS’ REPORTThe directors present their report, together with the financial statements, on the consolidated entity (the ‘Group’) consisting of Grange Resources Limited (‘Grange’ or ‘the Company’) and the entities it controlled at the end of, or during, the year ended 31 December 2022.DIRECTORSThe following persons were directors of Grange Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:Michelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonHonglin Zhao Managing Director, Chief Executive OfficerChongtao Xu Executive Director (Appointed 1 March 2023)Michael Dontschuk Non-Executive DirectorAjanth Saverimutto Non-Executive Director26GRANGE RESOURCES ANNUAL REPORT 2022FINANCIAL REPORT
CHONGTAO XU (APPOINTED 1 MARCH 2023)
Executive Director, Senior Investment Manager
Mr Xu specialises in investment of upstream and downstream
processes for steel producers. Mr Xu is a former head of steel
merger & acquisition division of Shagang Investment Holding Co
Ltd, the investment arm of China’s largest private steel company.
Mr Xu has extensive management experience in private equity
projects. Mr Xu managed a portfolio with the marketable value of
over four billion Australian dollars. Mr Xu holds a Master of Science
(Hons) from University College London
MICHAEL DONTSCHUK BSC(HONS), FFTP, GAICD
Independent Non-executive Director, Chairperson of the Audit and
Risk Committee, Chairperson of the Remuneration and Nomination
Committee
Mr Dontschuk is a finance professional with over 35 years’ experience
in investment, finance, treasury and financial risk management. He
currently is a professional NED and sits on a number of company
boards including Eticore, Public Trustee (Tasmania) and Australia
Ratings.
Previously Mr Dontschuk has been Group Treasurer of Grange
Resources, Group Treasurer of ANZ Bank, Managing Director of
Treasury Corporation Victoria, President and Director of the Finance
and Treasury Association of Australia and has worked extensively in
corporate financial advisory and investment banking including with
Oakvale Capital and Bankers Trust.
AJANTH SAVERIMUTTO BENG (MINING) HONS,
BBUS (ACCOUNTING)
Independent Non-executive Director and Member of the Audit and
Risk Committee
Mr Saverimutto is a Mining Engineer and Accountant with over 25
years’ experience in the resources industry. Mr Saverimutto has
extensive Corporate and Senior Management experience in a number
of ASX-listed and private companies. Currently Mr Saverimutto is
President and Director of Black Mountain Metals, a private, natural
resources company. Mr Saverimutto’s previous positions include
Managing Director of ASX listed Venturex Resources, Managing
Director and Founder of privately held Australian company Salt
Lake Mining.
Mr Saverimutto has held senior operational roles including Mining
Manager for leading international copper producer Freeport
McMoRan (NYSE: FCX), Chief Operating Officer of ASX listed gold
miner Unity Mining and Mining Manager for BHP Billiton – Stainless
Steel Materials.
COMPANY SECRETARY
MR PIERS LEWIS BCOMM, CA, AGIA
Mr Lewis has more than 20 years’ global corporate experience and
is currently the Company Secretary for ASX listed companies Cycliq
Group Limited and Ultima United Limited. Mr Lewis also serves as
Chairman of Digital Wine Ventures Limited and eSense-Lab Ltd and
on the Board of Cycliq Group Limited.
In 2001 Mr Lewis qualified as a Chartered Accountant with Deloitte
(Perth) he has extensive and diverse financial and corporate
experience from previous senior management roles with Credit
Suisse (London), Mizuho International and NAB Capital. Mr Lewis is
also a Chartered Company Secretary.
27
INFORMATION ON DIRECTORSMICHELLE LI PHD, GAICD Independent Non-executive Chairperson, Member of the Audit and Risk Committee, Member of the Remuneration and Nomination Committee. Dr Li has more than 30 years of international mining experience, including senior executive roles with mining companies such as Citic Pacific, Rio Tinto and Iluka Resources. Dr Li has a PhD from the University of Queensland and was previously a non-executive Director of Ardiden Limited, Orion Metals Limited and Sherwin Iron Limited. YAN JIA GAICDNon-executive Deputy Chairperson Ms Jia is currently the Director of the Administration Department with the Jiangsu Shagang International Trade Co Ltd, a subsidiary of Jiangsu Shagang Group, China’s largest private steel company. Ms Jia has over ten years’ experience of managerial, human resources, intellectual property and commercial experience in the steel industry and bulk raw material transaction sector. HONGLIN ZHAO Managing Director, Chief Executive Officer Mr Zhao is a former Director of Shagang International (Australia) Pty Ltd, former Director and General Manager of Shagang (Australia) Pty Ltd, and former Director of Jiangsu Shagang Group, ultimate shareholder of Shagang International Holdings Limited and China’s largest private steel company. Mr Zhao has over 40 years’ experience in the industry and was previously the Commander of Project Development Headquarters with Shagang. Mr Zhao has extensive project management and implementation experience and expertise. DIRECTORS’ REPORTThe directors present their report, together with the financial statements, on the consolidated entity (the ‘Group’) consisting of Grange Resources Limited (‘Grange’ or ‘the Company’) and the entities it controlled at the end of, or during, the year ended 31 December 2022.DIRECTORSThe following persons were directors of Grange Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:Michelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonHonglin Zhao Managing Director, Chief Executive OfficerChongtao Xu Executive Director (Appointed 1 March 2023)Michael Dontschuk Non-Executive DirectorAjanth Saverimutto Non-Executive Director26GRANGE RESOURCES ANNUAL REPORT 2022
GRANGE RESOURCES ANNUAL REPORT 2022
PRINCIPAL ACTIVITIES
DIVIDENDS
During the period, the principal continuing activities of the Group
consisted of the mining, processing and sale of iron ore; and
the ongoing exploration, evaluation and development of mineral
resources.
Dividends paid during the financial year were as follows:
Fully franked interim dividend for half year ended 30 June 2022
- 2.0 cents per share
Fully franked final dividend for the year ended 31 December
2021 - 10.0 cents per share
Fully franked special dividend for year ended 31 December
2021 - 10.0 cents per share
Fully franked interim dividend for half year ended 30 June 2021
- 2.0 cents per share
Fully franked final dividend for the year ended 31 December
2020 - 2.0 cents per share
Total dividends paid
2022
$’000
23,147
115,734
-
-
-
138,881
2021
$’000
-
-
115,734
23,147
23,147
162,028
Since the end of the financial year the directors have recommended the payment of a 2.0 cent per share final dividend of $23.1 million.
This represents a total of $46.3 million (4.0 cents per share) fully franked dividend for the year-end 31 December 2022. The final dividend
was declared NIL conduit foreign income and will be paid on 28 March 2023.
OPERATING AND FINANCIAL REVIEW
KEY HIGHLIGHTS
MINING OPERATIONS
• Achieved a major milestone of over 2,110 days Lost Time
Injury free.
• Pellet production of 2.52 million tonnes for the year compared to
2.60 million tonnes for the prior year.
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to $321.6
million for the prior year, on revenues from operations of $594.6
million compared to $781.7 million for the prior year.
• Average realised product price (FOB Port Latta) of A$203.18 per
tonne for the year compared to A$276.17 per tonne for the prior
year.
• Unit C1 cash operating costs of $120.64 per tonne for the year
compared to $99.73 for the prior year.
• Cash and liquid investments of $298.6 million at the end of year
compared to $463.5 million at the end of the prior year. Decrease
largely due to payment of dividends.
28
SAFETY PERFORMANCE
A focus on safety has been maintained across the business with
over 2,110 days Lost Time Injury Free achieved.
Key revenue metrics for the year ended 31 December 2022 and the
preceding 2021 year were as follows:
2022
2021
Iron Ore Pellet Sales (dmt)
2,429,700
2,507,201
Iron Ore Concentrate Sales (dmt)
1,853
42
Iron Ore Chip Sales (dmt)
136,760
108,130
Total Iron Ore Product Sales (dmt)
2,568,313
2,615,373
Average Realised Product Price
(US$/t FOB Port Latta) *
Average Realised Exchange Rate
(AUD:USD)
Average Realised Product Price
(A$/t FOB Port Latta)
141.28
208.08
0.6953
0.7535
203.18
276.17
*adusted for the costs of freight and final pricing settlements on provisional
settlements as per sales agreements. Pricing is typically finalised in one to three
months after shipment month.
Total sales for the year ended 31 December 2022 was 2.57 million
tonnes of high quality, low impurity iron ore products (2021: 2.62
million tonnes) and reflects sustained production from maintaining
access to high grade ore.
The average iron ore product price received during the year was
$203.18 per tonne of product sold (FOB Port Latta) (2021: $276.17
per tonne).
Please refer to Note 4 of the Financial Report for segment information
for sales to different geographical markets. The sales from long
term off take agreements with Jiangsu Shagang International Trade
Co. Ltd represents 36.5% of total sales for 2022 (2021: 27.7%).
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
PRINCIPAL ACTIVITIES
DIVIDENDS
Key operating metrics for the year ended 31 December 2022 and the
preceding 2021 year were as follows:
Total BCM Mined
Total Ore BCM*
Concentrate Produced (t)
Weight Recovery (%)
Pellets Produced (t)
Pellets Stockpile (t)
2022
2021
15,466,534
13,667,044
1,280,501
2,804,234
2,624,865
2,559,987
FINANCIAL POSITION
Grange’s net assets increased during the year to $904.1 million (31
December 2021: $871.2 million). The key movements in net assets
during the year are a result of the following:
• An increase in property plant and equipment and mine properties
and development of $60.6 million and $98.6 million respectively.
• An increase in other financial assets of $170.6 million due to
45.2
44.4
investment in term deposits
2,518,232
2,597,428
• An increase in trade receivables by $34.3 million
298,725
210,193
• A decrease in income tax payable by $62.9 million
"C1" Operating Cost (A$/t Concentrate
Produced)
120.64
99.73
• A decrease in cash and cash equivalents of $335.5 million
(refer to statement of cashflow) and
*Mining activities have focused on waste stripping in both North Pit and
Centre Pit in 2022.
• A decrease in net deferred tax assets by $60.9 million.
Note: “C1” costs are the cash costs associated with producing iron ore products
without allowance for mine development, deferred stripping and stockpile movements,
and also excludes royalties, sustaining capital, depreciation and amortisation costs.
Mining activities have focused on the cutbacks in both North Pit and
Centre Pit, following the successful completion of North Pit Stage 6.
This ore mining stage yielded large stockpiles to support production
in 2022 and 2023. Mining movement improved significantly over the
later part of the year with completion of some repairs to the truck
fleet and the implementation of modifications to the haul network.
The new Caterpillar 6040 face shovel is working well and six second-
hand Caterpillar 789 trucks have been introduced to the fleet to
support production. The rebuild of the current fleet also continues
with mechanical overhauls on six trucks completed during the year.
Additional replacement equipment is scheduled for delivery in Q1,
2023.
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The North Pit Underground PFS previously demonstrated a
technically and economical feasible underground mining operation
for North Pit. Ore continuity was demonstrated at depth and
highlights the potential for 6 million tonne per annum production rate
with an underground mine life of more than 10 years. The Definitive
Feasibility Study was commenced in 2022, with an amendment
to the location of the extraction level being modelled after the
completion of North Pit Stage 7 open pit mining. Additional drilling
to the north, revisions to geotechnical models were completed and
further exploration is planned as part of the DFS in 2023.
PORT LATTA IMPROVEMENT PROJECTS
The redesigned Furnace Line 4 was commissioned in 2022. The
initial phase involved integration into the operation with completion
of the refractory rebuild. The next phase will be to commission the
intermediate air system which will allow the improvement of air
distribution through the furnace, and is scheduled for Q2, 2023. This
will inform future design modifications to the other furnace lines
and support Grange’s decarbonisation initiatives.
STATEMENT OF CASH FLOWS
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net cash inflows from operating activities for the year were $196.9
million (2021: inflows $498.2 million) due to lower prices compared
to previous year and increase in unit operating costs.
NET CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflows from investing activities for the period were
$396.2 million (2021: outflows $79.6 million) and principally related
to funds invested in term deposits of $191.2 million and expenditures
for mine properties and development of $136.8 million and property,
plant and equipment of $87.7 million.
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net cash outflows from financing activities for the period were
$145.6 million (2021 outflow: $165.3 million) and principally related
to the payment of 2021 final dividend ($115.7 million) and 2022
interim dividend ($23.1 million).
ESG REPORTING AND INITIATIVES
Grange published
its baseline Environmental, Social, and
Governance (ESG) report with disclosures on 21 core metrics set by
the World Economic Forum (WEF) in its standardised and globally
recognised Stakeholder Capitalism Metrics ESG framework.
This new global environment
is challenging the traditional
expectations of corporations and redirecting investment capital.
Grange is committed to aligning the business, where applicable,
to the sustainable development goals that provide a roadmap to
sustainability and resilience.
The baseline report demonstrates Grange’s commitment to aligning
the business, where applicable, to the sustainable development
goals to provide guidance to sustainability and resilience. The report
describes the progress Grange has made against the four pillars of
the framework for Governance, Planet, People and Prosperity.
Most notably, Grange has developed a road map to reduce
emissions. This will involve the reduction in energy used per tonne
of product; upgrades to furnaces; recovery of heat in the pellet
plant; application of technology and electric vehicles in the mining
operation; and alternative fuel sources.
The Board has endorsed the pursuit of decarbonisation of Grange’s
Business with specific targets for CO2-e reduction including:
• The elimination of non-renewable coal sources like anthracite, by
2025.
• CO2-e emission target reduction of 50% by 2030 reducing
emissions to 53kg of CO2-e per tonne of iron ore products.
• Target of net zero CO2-e (Scope 1 and 2) emissions by 2035
29
During the period, the principal continuing activities of the Group
Dividends paid during the financial year were as follows:
consisted of the mining, processing and sale of iron ore; and
the ongoing exploration, evaluation and development of mineral
resources.
Fully franked interim dividend for half year ended 30 June 2022
Fully franked final dividend for the year ended 31 December
Fully franked special dividend for year ended 31 December
Fully franked interim dividend for half year ended 30 June 2021
- 2.0 cents per share
2021 - 10.0 cents per share
2021 - 10.0 cents per share
- 2.0 cents per share
2020 - 2.0 cents per share
Total dividends paid
Fully franked final dividend for the year ended 31 December
2022
$’000
23,147
115,734
-
-
-
138,881
2021
$’000
-
-
115,734
23,147
23,147
162,028
Since the end of the financial year the directors have recommended the payment of a 2.0 cent per share final dividend of $23.1 million.
This represents a total of $46.3 million (4.0 cents per share) fully franked dividend for the year-end 31 December 2022. The final dividend
was declared NIL conduit foreign income and will be paid on 28 March 2023.
OPERATING AND FINANCIAL REVIEW
KEY HIGHLIGHTS
MINING OPERATIONS
Injury free.
• Achieved a major milestone of over 2,110 days Lost Time
• Pellet production of 2.52 million tonnes for the year compared to
2.60 million tonnes for the prior year.
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to $321.6
SAFETY PERFORMANCE
A focus on safety has been maintained across the business with
over 2,110 days Lost Time Injury Free achieved.
Key revenue metrics for the year ended 31 December 2022 and the
preceding 2021 year were as follows:
2022
2021
Iron Ore Pellet Sales (dmt)
2,429,700
2,507,201
Iron Ore Concentrate Sales (dmt)
1,853
42
Iron Ore Chip Sales (dmt)
136,760
108,130
million for the prior year, on revenues from operations of $594.6
Total Iron Ore Product Sales (dmt)
2,568,313
2,615,373
million compared to $781.7 million for the prior year.
Average Realised Product Price
• Average realised product price (FOB Port Latta) of A$203.18 per
(US$/t FOB Port Latta) *
tonne for the year compared to A$276.17 per tonne for the prior
year.
• Unit C1 cash operating costs of $120.64 per tonne for the year
compared to $99.73 for the prior year.
• Cash and liquid investments of $298.6 million at the end of year
compared to $463.5 million at the end of the prior year. Decrease
largely due to payment of dividends.
Average Realised Exchange Rate
(AUD:USD)
Average Realised Product Price
(A$/t FOB Port Latta)
141.28
208.08
0.6953
0.7535
203.18
276.17
*adusted for the costs of freight and final pricing settlements on provisional
settlements as per sales agreements. Pricing is typically finalised in one to three
months after shipment month.
Total sales for the year ended 31 December 2022 was 2.57 million
tonnes of high quality, low impurity iron ore products (2021: 2.62
million tonnes) and reflects sustained production from maintaining
access to high grade ore.
The average iron ore product price received during the year was
$203.18 per tonne of product sold (FOB Port Latta) (2021: $276.17
per tonne).
Please refer to Note 4 of the Financial Report for segment information
for sales to different geographical markets. The sales from long
term off take agreements with Jiangsu Shagang International Trade
Co. Ltd represents 36.5% of total sales for 2022 (2021: 27.7%).
28
GRANGE RESOURCES ANNUAL REPORT 2022
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project, situated 90km from the city of
Albany in Western Australia, is a joint venture between Grange
(70%) and SRT Australia Pty Ltd (SRTA) (30%). SRTA is jointly owned
by Sojitz Corporation and Kobe Steel. This advanced project has 1.2
billion tonnes of high quality resource and has access to established
infrastructure.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT Australia Pty Ltd to reacquire
SRT’s 30 per cent interest in the Southdown Magnetite Project.
The transaction is expected to be completed in Q1, 2023. Upon
completion, Grange will hold 100 per cent ownership in the Project.
During 2022, the Company commenced to carry out a definitive
feasibility study on a 5 Mtpa development case with new technology
and additional testwork. The study is progressing as planned and
the results will be released when completed at the end of March.
All tenements, permits and project assets continue to be maintained
in good order.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group
during the financial year.
There was no significant change in the state of affairs of the
Group that occurred during the year ended 31 December 2022.
Commentary on the overall state of affairs of the Group is set out in
the Operating and Financial Review.
There were no other significant changes in the state of affairs of the
Group during the financial year.
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
Since the end of the financial year the directors have recommended
the payment of a 2.0 cent per share final dividend of $23.1 million.
There were no other matters or circumstances arising since 31
December 2022 that has significantly affected, or may significantly
affect:
i) The Group’s operations in future years; or
ii) The results of those operations in future financial years; or
iii) The Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
Grange’s strategic focus is to generate shareholder value by safely
producing high quality iron ore products from its Savage River and
Port Latta operations in Tasmania and continuing to assess the
feasibility of a major iron ore development project at Southdown,
near Albany in Western Australia. The Group’s current strategic
priorities include:
SAVAGE RIVER AND PORT LATTA OPERATIONS
• Optimising the Life of Mine Plan together with cost reduction
strategies
• Completing the Definitive Feasibility Study for underground
mining in North Pit
• Producing high grade ore from Centre Pit
• Delivering on secured off take agreements
30
• Maintaining access to ore with continuing investment in mine
development
• Maintaining critical process infrastructure
• Continuing focus on improving productivity and implementing
cost control projects
SOUTHDOWN PROJECT
• Completing feasibility study on a 5 Mtpa development case with
new technology and additional testwork
• Ensuring that all tenements, permits and project assets remain
in good standing
RISK MANAGEMENT
The Group continues to assess and manage various business risks
that could impact the Group’s operating and financial performance
and its ability to successfully deliver strategic priorities including:
• Fluctuations in iron ore market and movements in foreign
exchange rates
• Volatility in the energy prices and availability
• Geotechnical risks including wall stability
• Production risks and costs associated with aging infrastructure
• Project evaluation and development
• Health, safety and environment
•
Impacts of climate change on our business
• Risks associated with underground mining
RISK MITIGATION STRATEGIES INCLUDE THE FOLLOWING:
• Optimise timing of sales to the fluctuations in iron ore prices and
demands from different markets
• Focussed program of geotechnical wall monitoring, modelling
and redesign work to mitigate potential stability issues
• Continue disciplined and rigorous review process regarding
budget development and cost control to ensure investment
directed to highest priority areas while reducing overall operating
costs
• Hedging strategies for key energy exposures
• A well developed tool kit to ensure projects are adequately
planned and peer reviewed prior to commitment and execution
• Outstanding safety record is supported by comprehensive safety
system that enables management to develop a resilient safety
culture and ensure our stewardship over the environment
•
Initiatives to progressively decarbonise the operation
ENVIRONMENTAL REGULATION
The mining and exploration tenements held by the Group contain
environmental requirements and conditions that the Group must
comply with in the course of normal operations. These conditions
and regulations cover the management of the storage of hazardous
materials and rehabilitation of mine sites.
The Group is subject to significant environmental legislation and
regulation in respect of its mining, processing and exploration
activities as set out below:
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project, situated 90km from the city of
development
• Maintaining access to ore with continuing investment in mine
Albany in Western Australia, is a joint venture between Grange
• Maintaining critical process infrastructure
(70%) and SRT Australia Pty Ltd (SRTA) (30%). SRTA is jointly owned
by Sojitz Corporation and Kobe Steel. This advanced project has 1.2
billion tonnes of high quality resource and has access to established
infrastructure.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT Australia Pty Ltd to reacquire
SRT’s 30 per cent interest in the Southdown Magnetite Project.
The transaction is expected to be completed in Q1, 2023. Upon
completion, Grange will hold 100 per cent ownership in the Project.
During 2022, the Company commenced to carry out a definitive
feasibility study on a 5 Mtpa development case with new technology
and additional testwork. The study is progressing as planned and
the results will be released when completed at the end of March.
All tenements, permits and project assets continue to be maintained
in good order.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group
during the financial year.
• Continuing focus on improving productivity and implementing
cost control projects
SOUTHDOWN PROJECT
• Completing feasibility study on a 5 Mtpa development case with
new technology and additional testwork
• Ensuring that all tenements, permits and project assets remain
in good standing
RISK MANAGEMENT
The Group continues to assess and manage various business risks
that could impact the Group’s operating and financial performance
and its ability to successfully deliver strategic priorities including:
• Fluctuations in iron ore market and movements in foreign
exchange rates
• Volatility in the energy prices and availability
• Geotechnical risks including wall stability
• Production risks and costs associated with aging infrastructure
There was no significant change in the state of affairs of the
Group that occurred during the year ended 31 December 2022.
Commentary on the overall state of affairs of the Group is set out in
• Project evaluation and development
• Health, safety and environment
the Operating and Financial Review.
•
Impacts of climate change on our business
There were no other significant changes in the state of affairs of the
• Risks associated with underground mining
Group during the financial year.
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
RISK MITIGATION STRATEGIES INCLUDE THE FOLLOWING:
• Optimise timing of sales to the fluctuations in iron ore prices and
demands from different markets
Since the end of the financial year the directors have recommended
• Focussed program of geotechnical wall monitoring, modelling
the payment of a 2.0 cent per share final dividend of $23.1 million.
and redesign work to mitigate potential stability issues
There were no other matters or circumstances arising since 31
• Continue disciplined and rigorous review process regarding
December 2022 that has significantly affected, or may significantly
budget development and cost control to ensure investment
affect:
directed to highest priority areas while reducing overall operating
i) The Group’s operations in future years; or
ii) The results of those operations in future financial years; or
iii) The Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
Grange’s strategic focus is to generate shareholder value by safely
producing high quality iron ore products from its Savage River and
Port Latta operations in Tasmania and continuing to assess the
feasibility of a major iron ore development project at Southdown,
near Albany in Western Australia. The Group’s current strategic
priorities include:
SAVAGE RIVER AND PORT LATTA OPERATIONS
costs
• Hedging strategies for key energy exposures
• A well developed tool kit to ensure projects are adequately
planned and peer reviewed prior to commitment and execution
• Outstanding safety record is supported by comprehensive safety
system that enables management to develop a resilient safety
culture and ensure our stewardship over the environment
•
Initiatives to progressively decarbonise the operation
ENVIRONMENTAL REGULATION
The mining and exploration tenements held by the Group contain
environmental requirements and conditions that the Group must
comply with in the course of normal operations. These conditions
and regulations cover the management of the storage of hazardous
• Optimising the Life of Mine Plan together with cost reduction
materials and rehabilitation of mine sites.
strategies
• Completing the Definitive Feasibility Study for underground
regulation in respect of its mining, processing and exploration
mining in North Pit
activities as set out below:
The Group is subject to significant environmental legislation and
• Producing high grade ore from Centre Pit
• Delivering on secured off take agreements
30
SAVAGE RIVER AND PORT LATTA OPERATIONS
The Group obtained approvals to operate in 1996 and 1997
under the Land Use Planning and Approvals Act (LUPA) and the
Environmental Management and Pollution Control Act (EMPCA) as
well as the Goldamere Act and Mineral Resources Development
Act. The land use permit conditions for Savage River and Port
Latta are contained in Environmental Protection Notices 248/2
and 302/2 respectively. The currently approved Environmental
Management Plans were submitted for Savage River and Port
Latta on 21 December 2010. The extension of the project’s life was
approved by the Department of Tourism, Arts and the Environment
on 12 March 2007 and together with the Goldamere Act and the
Environmental Protection Notices, is the basis for the management
of all environmental aspects of the mining leases. The Group
has been relieved of any environmental obligation in relation to
contamination, pollutants or pollution caused by operations prior
to the date of the Goldamere Agreement (December 1996). Grange
received planning approval from the Waratah Wynyard Council and
the Tasmanian Environment Protection Authority for the Centre Pit
Expansion and South Deposit Backfill Dump through DA 216/2021
and Permit Conditions-Environmental No. 10995
During the financial year there were no breaches of licence
conditions.
SOUTHDOWN JOINT VENTURE
The Southdown Joint Venture has not been responsible for any
activities which would cause a breach of environmental legislation.
MOUNT WINDSOR JOINT VENTURE
Grange is a minority partner (30%) in the Mt Windsor project in
North Queensland which is now being rehabilitated for future lease
relinquishment. An ongoing Transitional Environment Program
has been entered into voluntarily to identify and remediate various
sources of pollution on site. A comprehensive plan has been
developed and instigated to manage the leases with relinquishment
expected in 2045.
During the financial year there were no breaches of licence
conditions.
NATIONAL GREENHOUSE AND ENERGY
REPORTING ACT 2007
The National Greenhouse and Energy Reporting Act 2007 requires
the Group to report its annual greenhouse gas emissions and energy
use by 31 October each year. The Group has implemented systems
and processes for the collection and calculation of the data required
and has submitted its annual reports through the Emissions and
Energy Reporting System (EERS) by 31 October each year.
NATIONAL GREENHOUSE AND ENERGY REPORTING (SAFE-
GUARD MECHANISM) RULE 2015
The Safeguard Mechanism applies to designated large facilities
and is triggered when the facility exceeds 100,000 t CO2-e as per
Division 8 of NEGR (Safeguard Mechanism) Rule 2015. The entity
with operational control of a designated large facility is responsible
for meeting safeguard requirements, including that the facility must
keep net emissions at or below baseline emission levels. Grange
has two facilities which trigger the Safeguard Mechanism. The Port
Latta Pelletising Plant has moved to a Production Adjusted Baseline
and the Savage River Mine Site has moved to a Transitional
Calculated Baseline.
RENEWABLE ENERGY (ELECTRICITY) ACT 2000
In recognition that the Renewable Energy Targets scheme may
increase costs to Companies that carry on Emissions Intensive
Trade Exposed (EITE) activities, the exemption provisions under
the Renewable Energy (Electricity) Act 2000 as amended allow a
prescribed person to apply for an exemption certificate in relation to
the electricity supplied to an EITE activity carried on at a site. Subject
to agreement from the prescribed person an exemption certificate
may be traded to the liable entity for the electricity supplied, and
provides the liable entity with exemption from liability for a certain
amount of megawatt-hours of electricity in the given calendar year.
Grange has received exemption certificates under this scheme.
CLIMATE CHANGE RISK AND OPPORTUNITIES
PHYSICAL RISKS
• Concentrated rainfall event causing flooding
• Rising sea levels and reduced rainfall causing groundwater
scarcity
RISK RELATED TO TRANSITION TO A LOW
CARBON ECONOMY
• Policy and legal risks as a result of government regulation of
carbon emissions, resulting in higher energy prices and other
production costs or restricted energy availability.
• Technology, market and reputation risk as a result of change in
consumer expectations and demand for low carbon goods and
services.
The Group identifies and monitors these risks through the enterprise
risk assessment process and continues to identify opportunities for
improvement. The Group acknowledges that the world is moving
to a low-carbon future. The steel market is already starting to
value ‘green steel’ and while our pellets reduce emissions in the
production of steels, the Group will continue to explore opportunities
to reduce carbon emissions in its production processes.
MEETINGS OF DIRECTORS
The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held during the year ended 31
December 2022, and the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and
Risk Committee
M Li
Y Jia
H Zhao
M Dontschuk
A Saverimutto
Attended
13
12
13
13
13
Held
13
13
13
13
13
Attended
6
6
-
6
-
Held
6
6
-
6
-
Attended
6
-
-
6
6
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
Held
6
-
-
6
6
31
GRANGE RESOURCES ANNUAL REPORT 2022
REMUNERATION REPORT
The remuneration report details the key management personnel
remuneration arrangements for the Group, in accordance with the
requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of
the entity, directly or indirectly, including all directors.
(I) KEY MANAGEMENT PERSONNEL DISCLOSED IN THIS
REPORT
Non-executive directors
Michelle Li
Yan Jia
Michael Dontschuk
Ajanth Saverimutto
Executive directors
Position
Honglin Zhao
Managing Director
Chief Executive Officer
Other key management personnel Position
(III) EXECUTIVE REMUNERATION PHILOSOPHY AND
FRAMEWORK
It is the Company’s objective to provide maximum stakeholder
benefit from the retention of a small high-quality executive team
by remunerating Executive Directors and executives fairly and
appropriately with reference to relevant market conditions. To assist
in achieving this objective, the Board attempts to link the nature and
amount of executives’ emoluments to the Company’s performance.
The remuneration framework aims to ensure that remuneration
practices are:
• acceptable to shareholders, transparent and easily understood;
• competitive and reasonable, enabling the company to attract
and retain key talents who share the same values with Grange
Resources; and
• aligned to the Company’s strategic and business objectives and
the creation of shareholder value.
Using external remuneration sector comparative data, the Group
has structured an executive remuneration framework that is
market competitive and complementary to the reward strategy of
the organisation. The framework is reviewed regularly along with
the remuneration strategy review.
Steven Phan
Ben Maynard
Chief Financial Officer
Chief Operating Officer
During the year, the Committee engaged remuneration consultants
Godfrey Remuneration Group to provide advice and market insights
in relation to executive remuneration arrangements.
(II) REMUNERATION GOVERNANCE
The Board has an established Remuneration and Nomination
Committee to assist in overseeing the development of policies and
practices which enable the Company to attract and retain capable
Directors and employees, reward employees fairly and responsibly
and meet the Board’s oversight responsibilities in relation to
corporate governance practices.
The framework provides a mix of fixed and variable pay, and a blend
of short and long term incentives detailed as follows:
FIXED REMUNERATION
Fixed remuneration is reviewed annually by the Remuneration and
Nomination Committee. The process consists of a review of Group
and individual performance, relevant comparative remuneration
externally and internally and, where appropriate, external advice on
policies and practices.
The Remuneration and Nomination Committee is composed of
Mr Michael Dontschuk (Independent Non-executive Director and
Committee Chairperson)and Dr Michelle Li (Independent Non-
executive Chairperson).
Executives are given the opportunity to receive their fixed (primary)
remuneration in a variety of forms including cash and fringe benefits.
It is intended that the manner of payment chosen is optimal for the
recipient without creating any undue cost for the Group.
responsibilities and
The
and Nomination Committee
recommendations on the following:
functions
the Remuneration
include reviewing and making
for
• Equity based executive and employee incentive plans;
• Recruitment, retention, succession planning, performance
measurement and termination policies and procedures for Non-
executive Directors, Executive Directors and Key Management
Personnel;
• The remuneration of the Chief Executive Officer, Chief Financial
Officer and the Chief Operating Officer;
• Periodically assessing the skills required by the Board;
• Recommend processes to evaluate the performance of the
There are no guaranteed fixed pay increases included in any
executives’ contracts.
VARIABLE REMUNERATION – SHORT TERM INCENTIVE (“STI”)
The objective of the STI is to link the achievement of the Company’s
annual operational targets (usually reflected in the approved
budgets) and an individual’s personal targets with the remuneration
received by selected executive directors and senior employees
responsible for meeting those targets. Payments are made as a cash
incentive payable after the financial statements have been audited
and released to the Australian Securities Exchange (“ASX”). 50% of
the STI relates to the achievement of company performance goals
and 50% relates to the attainment of agreed personal performance
goals.
Board, it’s Committees and individual Directors; and
VARIABLE REMUNERATION - LONG TERM INCENTIVE (“LTI”)
• Reviewing governance arrangements pertaining to remuneration
a) Deferred Cash
matters.
The Charter is reviewed annually, and remuneration strategies are
reviewed regularly.
A 3 year deferred cash long term incentive program commenced
in 2019 with the final tranche to be paid in 2024. This long-term
incentive program was replaced by a share-based payment scheme
in 2022.
The deferred cash scheme is to reward selected executive directors
and senior employees with a cash payment which is linked to the
32
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
REMUNERATION REPORT
The remuneration report details the key management personnel
remuneration arrangements for the Group, in accordance with the
requirements of the Corporations Act 2001 and its Regulations.
FRAMEWORK
(III) EXECUTIVE REMUNERATION PHILOSOPHY AND
It is the Company’s objective to provide maximum stakeholder
Key management personnel are those persons having authority and
benefit from the retention of a small high-quality executive team
responsibility for planning, directing and controlling the activities of
by remunerating Executive Directors and executives fairly and
the entity, directly or indirectly, including all directors.
(I) KEY MANAGEMENT PERSONNEL DISCLOSED IN THIS
Non-executive directors
• acceptable to shareholders, transparent and easily understood;
appropriately with reference to relevant market conditions. To assist
in achieving this objective, the Board attempts to link the nature and
amount of executives’ emoluments to the Company’s performance.
The remuneration framework aims to ensure that remuneration
practices are:
• competitive and reasonable, enabling the company to attract
and retain key talents who share the same values with Grange
Resources; and
• aligned to the Company’s strategic and business objectives and
the creation of shareholder value.
Using external remuneration sector comparative data, the Group
has structured an executive remuneration framework that is
market competitive and complementary to the reward strategy of
the organisation. The framework is reviewed regularly along with
the remuneration strategy review.
REPORT
Michelle Li
Yan Jia
Michael Dontschuk
Ajanth Saverimutto
Honglin Zhao
Executive directors
Position
Managing Director
Chief Executive Officer
Other key management personnel Position
Steven Phan
Ben Maynard
Chief Financial Officer
During the year, the Committee engaged remuneration consultants
Godfrey Remuneration Group to provide advice and market insights
Chief Operating Officer
in relation to executive remuneration arrangements.
(II) REMUNERATION GOVERNANCE
The Board has an established Remuneration and Nomination
Committee to assist in overseeing the development of policies and
practices which enable the Company to attract and retain capable
Directors and employees, reward employees fairly and responsibly
and meet the Board’s oversight responsibilities in relation to
The framework provides a mix of fixed and variable pay, and a blend
of short and long term incentives detailed as follows:
FIXED REMUNERATION
Fixed remuneration is reviewed annually by the Remuneration and
Nomination Committee. The process consists of a review of Group
and individual performance, relevant comparative remuneration
externally and internally and, where appropriate, external advice on
corporate governance practices.
policies and practices.
The Remuneration and Nomination Committee is composed of
Mr Michael Dontschuk (Independent Non-executive Director and
Committee Chairperson)and Dr Michelle Li (Independent Non-
Executives are given the opportunity to receive their fixed (primary)
remuneration in a variety of forms including cash and fringe benefits.
It is intended that the manner of payment chosen is optimal for the
executive Chairperson).
recipient without creating any undue cost for the Group.
The
responsibilities and
functions
for
the Remuneration
There are no guaranteed fixed pay increases included in any
and Nomination Committee
include reviewing and making
executives’ contracts.
recommendations on the following:
• Equity based executive and employee incentive plans;
• Recruitment, retention, succession planning, performance
measurement and termination policies and procedures for Non-
executive Directors, Executive Directors and Key Management
Personnel;
• The remuneration of the Chief Executive Officer, Chief Financial
Officer and the Chief Operating Officer;
• Periodically assessing the skills required by the Board;
• Recommend processes to evaluate the performance of the
goals.
VARIABLE REMUNERATION – SHORT TERM INCENTIVE (“STI”)
The objective of the STI is to link the achievement of the Company’s
annual operational targets (usually reflected in the approved
budgets) and an individual’s personal targets with the remuneration
received by selected executive directors and senior employees
responsible for meeting those targets. Payments are made as a cash
incentive payable after the financial statements have been audited
and released to the Australian Securities Exchange (“ASX”). 50% of
the STI relates to the achievement of company performance goals
and 50% relates to the attainment of agreed personal performance
Board, it’s Committees and individual Directors; and
VARIABLE REMUNERATION - LONG TERM INCENTIVE (“LTI”)
• Reviewing governance arrangements pertaining to remuneration
a) Deferred Cash
matters.
reviewed regularly.
The Charter is reviewed annually, and remuneration strategies are
A 3 year deferred cash long term incentive program commenced
in 2019 with the final tranche to be paid in 2024. This long-term
incentive program was replaced by a share-based payment scheme
in 2022.
The deferred cash scheme is to reward selected executive directors
and senior employees with a cash payment which is linked to the
b) Rights to Grange Shares
In 2022 the Company granted performance rights in three tranches
to be settled by issuance of shares to three key management
personnel. Each right is entitled to one equity share with a vesting
date of 31 December 2024. Tranche 1 (with a weighting of 35%), has
a total shareholder return (TSR) hurdle, tranche 2 (35% weighting)
has a return on equity (ROE) hurdle and tranche 3 (30% weighting)
has hurdles relating to non-market business objectives.
Company satisfying performance hurdles and subject to ongoing
is
employment with Grange. The deferred cash component
determined by measuring the Company’s progress made on:
• Development of mineral assets (weighting 35%)
• Mine development (weighting 20%)
• Downstream process improvement (weighting 15%)
• Financial returns (weighting 20%)
• Safety and sustainability (weighting 10%)
The deferred cash component is determined based on the Company’s
performance for the year ended 31 December, with 33.3% payable on
31 December the first following year, 33.3% payable on 31 December
the second following year, and the balance payable on the following
31 December (i.e. 3 years after the relevant calculation date).
Payment of deferred cash is subject to continuing employment with
Grange at the scheduled date of the payment.
(IV) RELATIONSHIP BETWEEN REMUNERATION AND GRANGE RESOURCES PERFORMANCE
The table below shows key performance indicators of Company performance over the past five years.
Revenue from Operations
Net profit after tax
Basic earnings per share
Dividend payments
Share price
(last trade day of financial year)
$ million
$ million
Cents
$ million
Cents
2018
368.20
112.94
9.79
23.10
20.00
2019
368.60
77.30
6.71
23.10
25.00
2020
526.30
203.19
17.64
23.10
29.50
2021
781.70
321.62
27.84
162.00
75.50
2022
594.60
171.74
14.84
138.90
84.50
V) NON-EXECUTIVE DIRECTOR REMUNERATION POLICY
Fees and payments to Non-executive Directors reflect the
responsibilities and demands made on them. Non-executive
Directors’ fees and payments are reviewed periodically by the
Board. The Board also considers comparative market data and if
required the advice of independent remuneration consultants to
ensure Non-executive Directors’ fees and payments are appropriate
and in line with the market. The Chairperson’s fees are determined
independently to the fees of Non-executive Directors based on
comparative roles in the external market.
Board of Directors
Chairperson (1)
Deputy Chairperson
Non-executive Director
Audit and Risk Committee
Chairperson
Committee Member
$210,000
$92,000
$81,000
$15,750
$10,500
The current remuneration was last reviewed with effect from 1
November 2014. The Chairperson’s remuneration is inclusive of
committee fees while other Non-executive Directors who chair a
Committee receive additional yearly fees. The Deputy Chairperson
is also entitled to receive an additional yearly fee
Non-executive Directors’ fees are determined within an aggregate
Directors’ fee pool limit, which is periodically reviewed for adequacy.
Any increase to the aggregate Directors’ fee pool is submitted to
shareholders for approval. The maximum currently stands at
$800,000 per annum and was approved by shareholders at the
Annual General Meeting on 26 November 2010. Non-executive
Directors do not receive performance-based pay.
Remuneration and Nomination Committee
Chairperson
Committee Member
$15,750
$7,500
(1) The Chairperson is not paid any additional amounts for Committee membership.
32
33
GRANGE RESOURCES ANNUAL REPORT 2022
VI) DETAILS OF REMUNERATION
Details of the remuneration of the key management personnel of the Group are set out in the following tables.
Table 1: Remuneration for the year ended 31 December 2022
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
Non-Executive
Directors
M Li
Y Jia
M Dontschuk
A Saverimutto
Sub-total
Non-Executive
Directors
Executive Directors
$
210,000
99,499
105,291
91,671
506,461
$
-
-
-
-
-
$
$
-
-
-
-
$
-
-
-
-
8,778
-
-
-
-
-
8,778
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
%
210,000
-
99,499
-
114,069
-
91,671
-
515,239
-
H Zhao
557,648
53,506
23,208
22,112
57,159
113,923
71,410
21,561
920,527
22%
Key Management Personnel
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
360,454
400,722
-
-
12,732
(3,865)
12,611
17,868
36,947
41,074
70,397
78,261
36,927
41,129
15,490
16,353
545,558
591,542
23%
23%
1,318,824
53,506
32,075
52,591
135,180
262,581
149,466
53,404
2,057,627
23%
1,825,285
53,506
32,075
52,591
143,958
262,581
149,466
53,404
2,572,866
18%
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
Table 2: Remuneration for the year ended 31 December 2021
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
Non-Executive
Directors
M Li
Y Jia
D Woodall(1)
M Dontschuk(2)
A Saverimutto(3)
Sub-total
Non-Executive
Directors
Executive Directors
$
193,333
107,749
30,137
96,752
53,375
481,346
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
2,863
-
-
2,863
$
-
-
-
-
-
-
$
-
-
-
-
-
-
H Zhao
541,934
72,943
30,068
20,879
52,839
121,443
94,751
Key Management Personnel
350,295
389,428
-
-
8,141
738
12,192
16,919
34,154
37,969
72,036
80,469
48,996
54,651
$
-
-
-
-
-
$
%
193,333
-
107,749
-
33,000
96,752
53,375
-
-
-
-
484,209
-
-
-
-
934,857
23%
525,814
580,174
23%
23%
1,281,657
72,943
38,947
49,990
124,962 273,948
198,398
-
2,040,845
23%
1,763,003
72,943
38,947
49,990
127,825
273,948
198,398
-
2,525,054
19%
(1) Mr Woodall resigned on 30 April 2021, (2) Mr Dontschuk was appointed Chairperson of the Remuneration and Nomination Committee effective 1 December 2021,
(3) Mr Saverimutto was appointed on 1 June 2021
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
34
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
VI) DETAILS OF REMUNERATION
Details of the remuneration of the key management personnel of the Group are set out in the following tables.
Table 1: Remuneration for the year ended 31 December 2022
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
$
$
-
-
-
-
-
-
8,778
-
-
$
-
-
-
$
%
210,000
-
99,499
-
114,069
-
91,671
-
-
-
8,778
515,239
-
H Zhao
557,648
53,506
23,208
22,112
57,159
113,923
71,410
21,561
920,527
22%
360,454
400,722
-
-
12,732
(3,865)
12,611
17,868
36,947
41,074
70,397
78,261
36,927
41,129
15,490
16,353
545,558
591,542
23%
23%
1,318,824
53,506
32,075
52,591
135,180
262,581
149,466
53,404
2,057,627
23%
1,825,285
53,506
32,075
52,591
143,958
262,581
149,466
53,404
2,572,866
18%
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
Table 2: Remuneration for the year ended 31 December 2021
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
$
-
-
-
-
-
-
$
-
-
-
-
2,863
$
-
-
-
-
-
-
$
$
%
193,333
-
107,749
-
33,000
96,752
53,375
-
-
-
2,863
-
484,209
-
$
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
210,000
99,499
105,291
91,671
506,461
Non-Executive
Directors
M Li
Y Jia
M Dontschuk
A Saverimutto
Sub-total
Non-Executive
Directors
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
Executive Directors
Key Management Personnel
Non-Executive
Directors
M Li
Y Jia
D Woodall(1)
M Dontschuk(2)
A Saverimutto(3)
Sub-total
Non-Executive
Directors
Executive Directors
$
193,333
107,749
30,137
96,752
53,375
481,346
Key Management Personnel
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
34
H Zhao
541,934
72,943
30,068
20,879
52,839
121,443
94,751
934,857
23%
350,295
389,428
8,141
738
12,192
16,919
34,154
37,969
72,036
80,469
48,996
54,651
525,814
580,174
23%
23%
1,281,657
72,943
38,947
49,990
124,962 273,948
198,398
-
2,040,845
23%
1,763,003
72,943
38,947
49,990
127,825
273,948
198,398
-
2,525,054
19%
(1) Mr Woodall resigned on 30 April 2021, (2) Mr Dontschuk was appointed Chairperson of the Remuneration and Nomination Committee effective 1 December 2021,
(3) Mr Saverimutto was appointed on 1 June 2021
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
35
GRANGE RESOURCES ANNUAL REPORT 2022
Table 3: Relative proportions linked to performance
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Executive Directors
H Zhao
Key Management Personnel
S Phan
B Maynard
Fixed Remuneration
At Risk - STI
At Risk - LTI
Dec-22
Dec-21
Dec-22
Dec-21
Dec-22
Dec-21
78%
77%
77%
77%
77%
77%
12%
13%
13%
13%
14%
14%
10%
10%
10%
10%
9%
9%
(VII) SERVICE AGREEMENTS
On appointment to the Board, all Non-executive Directors sign
a letter of appointment with the Company. The document details
the term of appointment, the role, duties and obligations of the
Directors as well as the likely time commitment and performance
expectations and review arrangements and circumstances relating
to the vacation of office. In addition, it also summarises the major
Board policies and terms, including compensation, relevant to the
office of Director.
Remuneration and other terms of employment for the executives
are formalised in service agreements. Each of the agreements
provides for the provision of fixed pay, performance related variable
remuneration and other benefits. The agreements with executives
are ongoing and provide for termination of employment at any time
by giving three months’ notice or by the Company paying an amount
equivalent to three months remuneration in lieu of notice.
(VIII) DETAILS OF STI AND LTI (SHARE-BASED PAYMENT) HELD BY KEY MANAGEMENT PERSONNEL
PERFORMANCE BASED REMUNERATION GRANTED AND FORFEITED DURING THE YEAR.
2022
H Zhao
S Phan
B Maynard
Total STI Bonus
(Cash)
Total STI Bonus
(Cash)
Total STI Bonus
(Cash)
Share-based
Payment rights
Share-based
Payment rights
Total Opportunity
Awarded
Forfeited
Value Granted
Value Exercised
$
147,554
85,839
95,428
328,821
%
77
82
82
%
23
18
18
$
143,834
103,335
109,094
356,263
$
-
-
-
-
STI amounts are inclusive of superannuation.
SHARE-BASED COMPENSATION
In May 2022 Grange Resources Limited (Parent Company) granted
performance rights in three tranches and to be settled by issuance
of shares to three key management personnel. Each right is entitled
to one equity share with a vesting date of 31 December 2024.
Executive KMP participate, at the board’s discretion, in the LTIP
comprising performance rights which are subject to TSR hurdles
(tranche 1) and series of non-market based business objectives
(tranche 2 and 3).
Feature
Opportunity/Allocation
Description
CEO - 25% of Fixed Remuneration; Other Key Management Personnel - 20% of fixed
remuneration.
Performance Hurdles
Tranche 1 performance rights is subject to a TSR performance vesting conditions
Tranche 2 and 3 performance rights are not subject to a TSR Hurdle and require
a series of non-market based business objectives to be met for the rights to be
exercised.
Exercise Price
$ Nil
Forfeiture and Termination
In the event of a termination of employment by the Company for cause, all unvested
rights will be forfeited unless otherwise determined by the Board.
Cessation of employment in other cases will generally result in pro-rate forfeiture of
the rights.
Measurement Period
22 February 2022 to 30 December 2024
Fair value Measurement at Grant Date
Tranche 1 is estimated using a Monte Carlo Model and Tranche 2 and 3 using black
Scholes Option pricing
36
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
Table 3: Relative proportions linked to performance
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
H Zhao
Executive Directors
Key Management Personnel
S Phan
B Maynard
(VII) SERVICE AGREEMENTS
Fixed Remuneration
At Risk - STI
At Risk - LTI
Dec-22
Dec-21
Dec-22
Dec-21
Dec-22
Dec-21
78%
77%
77%
77%
77%
77%
12%
13%
13%
13%
14%
14%
10%
10%
10%
10%
9%
9%
On appointment to the Board, all Non-executive Directors sign
Remuneration and other terms of employment for the executives
a letter of appointment with the Company. The document details
are formalised in service agreements. Each of the agreements
the term of appointment, the role, duties and obligations of the
provides for the provision of fixed pay, performance related variable
Directors as well as the likely time commitment and performance
remuneration and other benefits. The agreements with executives
expectations and review arrangements and circumstances relating
are ongoing and provide for termination of employment at any time
to the vacation of office. In addition, it also summarises the major
by giving three months’ notice or by the Company paying an amount
Board policies and terms, including compensation, relevant to the
equivalent to three months remuneration in lieu of notice.
office of Director.
(VIII) DETAILS OF STI AND LTI (SHARE-BASED PAYMENT) HELD BY KEY MANAGEMENT PERSONNEL
PERFORMANCE BASED REMUNERATION GRANTED AND FORFEITED DURING THE YEAR.
Total STI Bonus
Total STI Bonus
Total STI Bonus
(Cash)
Share-based
Payment rights
Share-based
Payment rights
Total Opportunity
Forfeited
Value Granted
Value Exercised
(Cash)
$
147,554
85,839
95,428
328,821
(Cash)
Awarded
%
77
82
82
%
23
18
18
$
143,834
103,335
109,094
356,263
$
-
-
-
-
STI amounts are inclusive of superannuation.
SHARE-BASED COMPENSATION
In May 2022 Grange Resources Limited (Parent Company) granted
Executive KMP participate, at the board’s discretion, in the LTIP
performance rights in three tranches and to be settled by issuance
comprising performance rights which are subject to TSR hurdles
of shares to three key management personnel. Each right is entitled
(tranche 1) and series of non-market based business objectives
to one equity share with a vesting date of 31 December 2024.
(tranche 2 and 3).
Opportunity/Allocation
CEO - 25% of Fixed Remuneration; Other Key Management Personnel - 20% of fixed
Performance Hurdles
Tranche 1 performance rights is subject to a TSR performance vesting conditions
Tranche 2 and 3 performance rights are not subject to a TSR Hurdle and require
a series of non-market based business objectives to be met for the rights to be
Forfeiture and Termination
In the event of a termination of employment by the Company for cause, all unvested
rights will be forfeited unless otherwise determined by the Board.
Cessation of employment in other cases will generally result in pro-rate forfeiture of
Measurement Period
22 February 2022 to 30 December 2024
Fair value Measurement at Grant Date
Tranche 1 is estimated using a Monte Carlo Model and Tranche 2 and 3 using black
Scholes Option pricing
Description
remuneration.
exercised.
$ Nil
the rights.
2022
H Zhao
S Phan
B Maynard
Feature
Exercise Price
36
PERFORMANCE CONDITIONS FOR EACH TRANCHE
TRANCHE 1
Performance Level
Annualised Grange TSR Compared to TSR of the ASX 300
Metals and Mining TR Index
% of Tranche Vesting
Stretch
> Index TSR + 9% TSR CAGR
Between Target and Stretch
> Index TSR + 2% TSR CAGR &
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