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2021 ReportPeers and competitors of OZ Minerals Limited:
Hillgrove ResourcesA modern mining company
20 April 2017
The Manager, Companies
Australian Securities Exchange
Companies Announcement Centre
20 Bridge Street
Sydney NSW 2000
Dear Sir/Madam,
2016 Annual Report and Sustainability Report available today
Attached is OZ Minerals’ 2016 Annual and Sustainability Report. The Annual and Sustainability Report
is available on the OZ Minerals website, www.ozminerals.com
The OZ Minerals 2016 Annual and Sustainability Report will be distributed to shareholders on 21 April
2017, with the release of the Notice of Annual General Meeting and Proxy Form.
Yours faithfully,
Robert Mancini
Company Secretary
OZ Minerals Limited | ABN: 40 005 482 824 | Level 1, 162 Greenhill Road, Parkside South Australia 5063
T: +61 8 8229 6600 | F: +61 8 8229 6601 | info@ozminerals.com | www.ozminerals.com
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2016
2016
Annual and
Sustainability
Report
Our Company
Strategy
OZ Minerals’ strategy is centred around creating
value for all our stakeholders including shareholders,
employees, traditional owners, pastoralists and the
wider communities in which we operate. We create
value by:
•
•
•
•
Building and maintaining a portfolio of assets on
the condition they are value accretive;
Targeting base and precious metals, while
retaining a copper core;
Focusing on customers’ requirements; and
Operating as a lean, agile business.
With a clear framework for decisions, the strategy
is underpinned by the three pillars of safety, capital
discipline and strong values.
Our focus in 2016 has been on executing and
embedding the strategy into the fabric of the business.
We concentrated our efforts on strategic alignment,
delivery and culture.
To that end, the most visible sign of positive progress
was Prominent Hill delivering production and cost
results in line with the advice we provided to the
market for the second consecutive year. The team
also showed discipline and agility when faced with
15 days of lost production due to a statewide power
outage. The result reinforces that the Company is
capable of delivering reliable and predictable results
with disciplined deployment of capital, key to investor
confidence.
From a cultural perspective we sought to embed
alignment across the Company strategy through
face-to-face discussions cascading from senior
management in numerous forums. The senior
leadership team played a key role in developing the
messaging around the strategy and conveying it to
their teams.
The conversation also involved what being a modern
mining company means: adapting to the ever changing
environment; harnessing the innovative ideas of our
people; and collaborating internally and externally - in
essence, thinking and acting differently.
Multiple Assets
A key part of our strategy is to expand our growth
pipeline and progress existing projects.
Three new earn-in agreements with exploration
companies were signed in 2016, bringing OZ Minerals’
total exploration agreements to six.
West Musgrave is the most advanced earn-in
agreement with a further scoping study underway to
determine a pathway to commercialisation.
Copper Core
Copper remains at the heart of OZ Minerals. Our
growth pipeline reflects our focus on this, as does our
commitment to unlocking value in our existing assets.
Prominent Hill’s mine life has been extended through to
2028, and the Carrapateena project is advancing well
with the successful completion of a pre-feasibility study,
and commencement of the Tjati exploration decline.
Customer Focus
The Prominent Hill team works closely with the
marketing team to produce customised parcels of high-
grade, copper-gold-silver concentrate, which are sold to
customers in Asia, Australia and Europe. Ongoing mine
to mill alignment to meet customer requirements has
resulted in the continued diversification of our customer
base.
Lean Business
One of the enablers of the strategy is our lean and agile
philosophy, a way of working supported by simplified
systems, processes and technology. To that end we
completed a full technology refresh and transitioned
our Enterprise Resource Planning system to a new
platform on time and on budget. This simplification
encourages cross-site collaboration and enables greater
flexibility in our planning and reporting.
We have developed a new governance structure,
reducing our policies, standards and procedures to
provide greater clarity for the business on what is
required within a devolved operating model. It is an
ongoing project that will continue in 2017.
During the year we initiated a focus on innovative
thinking and collaboration. We understand that to
be lean, agile and extract maximum value for the
Company, we need to continually examine and
improve the way we are working.
At Carrapateena, we are examining options for a
completely autonomous underground mine. We have
been working closely with our contractor PYBAR, to
explore different technologies to add value through
safety, productivity and efficiency improvements. These
include:
•
Semi-autonomous bogging that allows for waste
bogging to be undertaken while exhausting toxic
•
fumes following blasting. This initiative shortens
the face cycle time and is expected to deliver
significant productivity benefits; and
An underground wireless, real time tracking and
data communication system, which will improve
safety and productivity. This sophisticated system
will be fundamental in helping OZ Minerals
create an autonomous underground mine.
Safety
While safety is covered in more detail in other sections
of this report, a major safety improvement program is
underway with our underground contract partner at
Prominent Hill.
Capital Discipline
In pursuit of capital discipline, we are driving cost-
saving initiatives throughout the business. Prominent
Hill’s costs remain in the bottom quartile and through
a Company-wide review of all our supplier contracts
we have cut our procurement costs by more than $40
million (annualised savings).
Strong Values
A significant milestone in Carrapateena’s progress was
reached with the signing of a partnering agreement
with the Kokatha Aboriginal Corporation, the traditional
owners of the Carrapateena site. The Carrapateena
section and the Social section of this report contains
further information about this agreement.
We have also started a Company-wide, internal
program focused on how we work together. These
behaviours will drive how we do business and is an
ongoing project for 2017.
Through lean processes, strong partnerships,
a commitment to science, understanding the
environment and a whole-of-mine life cycle approach,
OZ Minerals is committed to embedding the
stakeholder value creation concept across all aspects of
the business.
This has been a year of many achievements. We now
have the foundations in place, and there is still much
work to be done to grow the Company and take
further steps towards the realisation of our strategy
and our long-term ambitions to be a modern mining
company.
A MODERN
MINING
COMPANY
We work together by: thinking and acting differently; building
a culture of respect that enables our people to succeed;
focusing on partnerships and collaboration, not hierarchy;
delivering superior results through effective planning and agile
deployment; doing what we say we will do and taking action
and; acting with integrity and engaging with our stakeholders.
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LEAN
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MULTIPLE
ASSETS
CAPITAL
DISCIPLINE
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9
Prominent Hill
Prominent Hill is a copper-gold-silver mine located
130 km south-east of Coober Pedy in South
Australia. Its open pit and underground mine
produce a high quality copper concentrate at a
low, bottom quartile cost. The projected mine life
extends to 2028.
2016 was another year of strong and predictable
operating performance at Prominent Hill. Copper
production and cost guidance were met for
the second consecutive year despite challenges
including a state-wide power outage, which saw
15 days of lost production. Revised gold production
was also met.
Prominent Hill’s costs are in the bottom quartile of
all copper producers worldwide (Wood McKenzie
data from Q4 2016).
During the year, the mine life of Prominent Hill was
extended out to 2028 following a significant 40
per cent increase in the underground Ore Reserve
estimate and associated development of a new
mine plan.
Key elements of the new mine plan include:
• Maintaining efficiency of production through
to closure of the open pit in mid-2018;
•
•
•
Growing open pit stockpiles through to
2018 and pairing stockpiled ore with the
underground higher grade ore, enabling the
processing plant to maintain current capacity
until mid-2023;
Ramping up underground production to
3.5 Mtpa - 4.0 Mtpa by 2019; and
Steady state of production at 3.5 Mtpa -
4.0 Mtpa through to at least 2028. 3
After the significant progress of the prior year, our
safety metrics for 2016 were disappointing. An
increase in recordable injuries in the underground
mine resulted in a rise in the Company's total
recordable injury frequency rate to 6.80. The
increase detracted from the excellent performance
of many OZ Minerals departments and contract
partners who ended the year recordable injury
free. An improvement program is underway
enabling the future ramp-up of the
underground mine production profile;
•
Ramping down open pit production through
the planned demobilisation to maintain
operational effectiveness in line with the
reducing size of the remaining pit shell. In the
last quarter of 2016, a single ramp design
in the open pit was implemented, which
enabled access to additional Ore Reserves;
During the year, the mine life of Prominent Hill was
extended out to 2028 following a significant 40 per
cent increase in the underground Ore Reserve and
associated development of a new mine plan.
with our underground contract partner focusing
on leadership, risk management and employee
engagement.
Prominent Hill is an established operation with
ongoing consultation and liaison with pastoralists,
traditional owners and other community members.
Discussion topics in 2016 included water usage,
cultural heritage, pit closure and waste rock dump
rehabilitation.
Looking ahead our focus for 2017 is:
•
•
Delivering consistent performance by
maintaining a strong operating discipline;
Expansion of the underground operation with
the northern decline (Liru) scheduled
for completion in the third quarter providing
additional independent haulage access,
• Work will continue on progressive waste
dump rehabilitation as part of a continuous
mine closure strategy. Consultation with
stakeholders will ensure adequate ongoing
financial provisions and a pathway for a
positive legacy for both the local community
and South Australia post mine closure;
Improvements and cost saving initiatives to
continue, driven by business simplification
and lean operating principles; and
Drilling programs, including near mine
exploration, to target replacement of
underground ore reserves and mine life
extension.
•
•
(3) This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx.
OZ Minerals confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
116,882
tonnes of
copper
produced
118,333
ounces of
gold
produced
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Overview
Location: 650 km north-west of Adelaide, 130 km south-
east of the town of Coober Pedy
Product: Copper concentrate (containing gold and silver)
Mining method: Open pit and underground mine
Processing method: Conventional crushing, grinding
and flotation
Resources: Estimated at 172 Mt @ 1.0% copper, 0.7 g/t
gold and 2.7 g/t silver4
Reserves: 75 Mt @ 1.0% copper, 0.6 g/t gold (740 kt
copper and 1.4 Moz gold)4
Sales
Concentrate produced at Prominent Hill is either railed
to Port Adelaide, where it is shipped to customers in
Asia and Europe, or transported by rail and road to our
domestic customers.
(4) Please refer to page 117 [‘Reserves and Resources 2016’ section] for full disclosure.
11
134 Mt
resource
1.5% copper,
0.6 g/t gold5
US$0.82
/lb
bottom quartile,
average C1 costs
over life of mine
Overview
Location: 250 km south-east of Prominent
Hill. 130 km north of the regional centre of
Port Augusta, in South Australia
Deposit: Iron-oxide, copper-gold
Reserves: 70 Mt @ 1.8% copper, 0.7 g/t
gold (1,300 kt copper and 1.7 Moz of gold)5
Robust Financials6:
NPV is $770 million
Status: Project, feasibility study underway,
exploration decline in construction
IRR of circa 20% both on a post-tax basis at
copper/gold AUS consensus pricing
Resources: Total estimated Indicated,
Inferred and Measured Resources (based on
$70 NSR cut-off grade) of 134 Mt at 1.5%
copper 0.6 g/t gold (1,970 kt copper and 2.6
Moz of gold)5
Short payback period of four years
Expected revenue over life of mine (LOM)
$10.6 billion
Bottom quartile, average C1 costs of
US$0.82/lb over life of mine
Signing of the Partnering Agreement at the official opening of the Tjati decline
(l-r): Andrew Cole, Managing Director and CEO, OZ Minerals; Chris Larkin, Chairman, Kokatha Aboriginal Corporation.
Carrapateena
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Carrapateena is an advanced iron-oxide, copper-
gold project located in South Australia’s highly
prospective Gawler Craton region. It comprises
an underground copper mine and a Concentrate
Treatment Plant (CTP). The $980 million project
is the largest new mining project underway
in Australia and is a key part of OZ Minerals’
growth strategy. It is expected the Carrapateena
asset will generate operating cash flow by 2019.
OZ Minerals is able to fund Carrapateena from
existing cash flow if required.
In line with our agile project delivery model,
construction of the Tjati exploration decline
was endorsed by the Board and development
commenced in September 2016. The decline
will provide early access to the Carrapateena
orebody and de-risks the project from an access
timing perspective. Construction is progressing
to schedule.
The CTP uses an innovative process to create
a premium concentrate of approximately 50 –
60 per cent copper with negligible impurities.
the community valued. Creating space for open
communication is a priority for OZ Minerals, not
only to satisfy regulatory requirements, but also
to ensure Carrapateena is a project that creates
shared value both now and into the future.
Community engagement and value creation will
be an ongoing part of the project.
OZ Minerals has been working closely with
the Kokatha Aboriginal Corporation, the
traditional owners at Carrapateena, to develop
a partnering agreement. This agreement is an
The pre-feasibility study proposes a 4 Mtpa sub-level cave mining operation with
an estimated annual production rate of circa 61,000 tonnes of copper and circa
63,000 ounces of gold. The project has potential for a 20-year plus mine life with
revenue expected to be $10.6 billion LOM.6
In 2016 highlights for the project were:
•
•
•
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Successful completion of the pre-feasibility
study (PFS) confirming the project is
technically achievable and providing a
business case for development;
Commencing construction of the Tjati
exploration decline;
Commencing the feasibility study; and
Signing of a partnering agreement between
Carrapateena’s traditional land owners, the
Kokatha Aboriginal Corporation, and OZ
Minerals.
The PFS proposes a 4 Mtpa sub-level cave mining
operation with an estimated annual production
rate of circa 61,000 tonnes of copper and circa
63,000 ounces of gold. The project has potential
for a 20-year plus mine life with revenue
expected to be $10.6 billion LOM.6
The Carrapateena project has adopted the
highly successful agile project evaluation and
delivery system. This aligns to the Company’s
lean focus and allows the OZ Minerals Board
to progressively approve the project at key
milestones based on risk and value. Deliverables
are achieved faster, with a lower risk profile and
greater flexibility to adapt to the project’s needs.
This high grade copper concentrate will be an
attractive feed and blend stock for smelters and
will incur lower commercial costs. The CTP is the
subject of a separate but parallel study process to
Carrapateena.
Environmental research programs and studies
into aspects of the Carrapateena project that will
affect the natural environment were completed
during 2016. These studies formed the basis of
a one-of-a-kind interactive engagement hub
with the South Australian Government. The hub
enabled OZ Minerals to efficiently seek feedback
on studies undertaken, workshop ideas for the
presentation of information and trial the use
of virtual reality as a tool in consultation and
engagement. This successful campaign provided
background and transparency for the upcoming
formal approval process.
Integral to the success of the Carrapateena
project is the engagement of local communities
and traditional owners. Over the past year,
members of the Carrapateena team met
communities in Woomera, Port Augusta, Whyalla
and Roxby Downs, as well as the pastoral
landowners and local Aboriginal groups. People
were informed about the project and OZ
Minerals had an opportunity to listen to what
innovative approach undertaken in addition to
our legislative requirements for Carrapateena.
Fundamentally, it recognises the shared value
to be gained when we work together as
equals. It seeks to create sustainable benefits
by leveraging, developing and building on our
shared values and aspirations, while protecting
and respecting country and culture. The
partnering agreement ‘Nganampa palyanku
kanyintjaku’ (translated: keeping the future good
for all of us) was signed at the official opening
of the Tjati decline held at Carrapateena in
November 2016.
(5) Please refer to page 117 [‘Reserves and Resources 2016’
section] for full disclosure.
(6) This information is extracted from the report entitled
‘Confidence in Carrapateena project grows’ released to the ASX
on 7 November 2016 and is available at http://www.ozminerals.
com/media/asx/. OZ Minerals confirms that all material
assumptions underpinning the production target in that report
continue to apply and have not materially changed.
13
Exploration
and Growth
In line with OZ Minerals’ growth strategy, the
pipeline of potential growth opportunities expanded
in 2016 with the signing of three new earn-in
agreements to explore prospects with identified
mineralisation at West Musgrave, Intercept Hill
and Coompana. OZ Minerals now has six such
agreements in place, which provide us with
exploration expertise in specific geologies or
locations.
Integral to our growth strategy is ensuring we have
the right, value accretive projects in the Company.
In line with our capital discipline strategy, if at any
time it is determined that a project does not have the
potential to generate substantial value, OZ Minerals
will cease expenditure and withdraw from the
arrangement.
The Company spent a total of $16.4 million
on exploration in 2016, and $12.9 million on
Carrapateena studies (prior to the decision to
capitalise costs from 1 July 2016). OZ Minerals
expects to spend between $10 - $15 million on
exploration in 2017.
Projects
West Musgrave with Cassini Resources is the
most advanced of OZ Minerals earn-in agreements
with a further scoping study currently underway.
OZ Minerals and Cassini Resources are looking to
develop the Nebo-Babel copper-nickel and Succoth
copper deposits located in the Musgrave Province
of Western Australia near the South Australian and
Northern Territory borders. Nebo and Babel contain
a combined indicated and inferred mineral resource
estimate of 203.1 million tonnes7 at 1.38% copper
equivalent.8 The Succoth deposit inferred mineral
resource estimate is 156 million tonnes at 0.6%
copper.7
A significant amount of the estimated resource
occurs beneath shallow cover of less than 50
metres. OZ Minerals is hoping to establish the West
Musgrave project as a scalable, low cost, long life,
open pit mining operation.
The Company has committed an initial $3 million
for the further scoping study to identify an optimised
pathway to commercialisation with a focus on
operational scale and improvement in metallurgical
recovery. OZ Minerals has the ability to earn up to
a 70 per cent interest by spending a further $33
million on pre-feasibility and feasibility studies, and
exploration.
Exploration Activity
Intercept Hill with Red Tiger Resources will
search for Iron Oxide Copper Gold (IOCG)
mineralisation 30 km north-west of the
Carrapateena project, providing us with another
area of focus in the Gawler Craton. This exploration
project is based on the reprocessing of a suite of
geophysical data that revealed previous explorers in
the region may have overlooked gravity anomalies
possibly associated with IOCG systems. These targets
will be drill tested in early 2017.
Coompana with Mithril Resources will explore
seven exploration licences in South Australia’s far
western Coompana Province. The Coompana area
has been the subject of a significant amount of
airborne and ground geophysics conducted by the
South Australian Department of State Development
in collaboration with PACE (Plan for Accelerating
Copper Exploration). Target generation has
commenced by Mithril Resources.
Eloise with Minotaur Exploration is looking for
Cannington style lead/zinc/silver mineralisation and
Eloise style high grade copper gold mineralisation in
the highly prospective Eastern Succession of the Mt
Isa block in Queensland.
In its first six months, the joint venture uncovered
several significant Induced Polarisation chargeability
and electromagnetic (EM) anomalies that had not
been previously drill tested. Drilling commenced in
the second half of 2016 at Bullwinkle, Olympus,
and Iris prospects. Highlights from the recent drill
campaign are:
•
•
EL16D05 – 38 m @ 0.47% Cu from 166 m.
The main breccia zone comprised 4 m @
1.65% Cu and 0.2 g/t Au.
EL16D08 – 26 m @ 0.73% Cu, 0.61 g/t Au
from 168 m including 0.4 m @ 12.4% Cu and
14.3 g/t Au.9
Following the encouraging drill results at Iris, an
in-fill EM survey was conducted along 4 km of
strike to better define the anomalies. The new EM
data defined an anomaly called Electra which is
approximately 1.4 km in strike length, immediately
north of Iris.9
Yandal One with Toro Energy is focusing on
exploring for nickel sulphide mineralisation in
Western Australia. OZ Minerals committed an initial
$0.5 million to a drilling program after investigations
into historical drilling data uncovered evidence
of shallow nickel mineralisation on the edge of a
large, high-amplitude magnetic anomaly, within 60
km of BHP’s Mt Keith mine. Drilling commenced in
November 2016.
Mount Woods with Minotaur Exploration is
searching for copper resources in the tenements
surrounding Prominent Hill. It is focused on
identification and drilling of IOCG and ISCG targets.
This innovative agreement gave Minotaur access
to OZ Minerals’ vast repository of more than 15
years of exploration data. Minotaur provides its
regional expertise in interrogating the database to
generate new targets for drill testing, and provides
OZ Minerals with an opportunity to accelerate its
search for new copper resources in the Prominent
Hill district. Drilling commenced at Mount Woods in
the third quarter of 2016.
Bellas Gate and Rodinia with Carube Copper Corp
OZ Minerals withdrew from its earn-in agreement
with Carube Copper Corp in Bellas Gate and
Rodinia, Jamaica in September 2016.
(7) The information regarding the West Musgrave Project is extracted
from Cassini Resources’ ASX Release entitled ‘Nebo-Babel Scoping Study
dated 13 April 2015 and ‘Positive Nebo-Babel Optimisation Study Results’
dated 14 April 2016 and is available at www.cassiniresources.com.au/
investor-relations/asx-announcements. The information in this report that
relates to exploration results has not been compiled by OZ Minerals. The
reported information has been derived from publically available information
arising from exploration activity reported by Cassini Resources. OZ Minerals
makes no comment or representation regarding the exploration, verification
and evaluation techniques adopted in respect of the historical exploration
results reported in this announcement.
(8) Further information about this calculation can be found in the
Company’s announcement entitled ‘OZ Minerals secures Australia’s largest
undeveloped copper nickel deposit’ released to the ASX on 1 August 2016,
which is available at
http://www.ozminerals.com/media/asx/.
(9) The information regarding the Eloise project is extracted from Minotaur
Exploration’s ASX Release entitled ‘Exploration for IOCG and ISCG
copper-gold giants’ dated 2 December 2016 and is available at www.
minotaurexploration.com.au/investor-information/asx-announcements. The
information in this report that relates to exploration results has not been
complied by OZ Minerals. The reported information has been derived from
publically available information arising from exploration activity reported by
Minotaur Exploration. OZ Minerals makes no comment or representation
regarding the exploration, verification and evaluation techniques adopted in
respect of the historical exploration results reported in this announcement.
Exploration Projects
West Musgrave project
•
•
•
Earn-in with Cassini Resources
Copper/nickel
Project in scoping study phase
Yandal One
Earn-in with Toro Energy
Exploring for nickel sulphide
mineralisation
•
•
•
Eloise
Earn-in with Minotaur Exploration
Exploring for Cannington style lead/
zinc/silver mineralisation and high
grade copper/gold mineralisation
•
•
•
Gawler
Craton
Coompana
Coompana
•
•
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Earn-in with Mithril Resources
Earn-in with Mithril Resources
Exploring for copper/nickel
Exploring for copper/nickel
magmatic sulphide mineralisation
magmatic sulphide mineralisation
Mount Woods
Mount Woods
•
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Earn-in with Minotaur Exploration
Earn-in with Minotaur Exploration
Exploring for brownfield
Exploring for brownfield
copper resources around
copper resources around
Prominent Hill
Prominent Hill
Intercept Hill
•
•
Earn-in with Red Tiger Resources
Exploring for copper/gold IOCG
mineralisation targets 30 km
north-west of Carrapateena project
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West Musgrave project• Earn-in with Cassini Resources• Copper/nickel• Project in scoping study phaseYandal One• Earn-in with Toro Energy • Exploring for nickel sulphide mineralisation•
Governance
At OZ Minerals, providing strong governance to enable lean business
processes, clear accountabilities and room for innovation is fundamental
to the strategy.
OZ Minerals'
Management Structure
OZ Minerals’ Governance and Risk Policy and our
management structure provides clear guidelines
to conduct our activities in a financially,
environmentally and socially responsible way and
reinforces the corporate strategy.
The OZ Minerals Board is committed to following
the corporate governance guidelines and
recommendations set out by the ASX Corporate
Governance Council’s Corporate Governance
Principles and Recommendations.
The Board is responsible for overseeing the
management of the Company. The Board has
adopted a Board Charter that sets out its roles
and responsibilities which include setting the
Company's goals and objectives, reviewing and
monitoring the Company’s material risks and
its system of internal compliance and controls;
setting an appropriate corporate governance
framework; and determining broad policy
issues for the Company. The Board also ensures
that specific powers and responsibilities have
been delegated to the Company's Executive
Committee and that the overall strategy is aimed
at delivering value for shareholders.
The OZ Minerals Board currently comprises six
directors, one executive director and five non-
executive directors. The executive director is CEO
Andrew Cole. The proportion of female directors
on the Board is 33 per cent.10
Three standing Committees assist the Board with
the effective discharge of its responsibilities.
Audit Committee assists the Board in the
effective discharge of its responsibilities in
relation to financial reporting and disclosure
processes, internal financial controls, funding,
financial risk management including hedging and
the internal and external audit functions, and
oversight of the effectiveness of the systems of
internal control and risk management.
Human Resources and Remuneration
Committee assists the Board in discharging its
responsibilities relating to the remuneration of
directors, executives, and employees, succession
planning and the establishment and monitoring
of the Diversity and Inclusion Policy.
Sustainability Committee assists the Board
in the effective discharge of its responsibilities
in relation to: Safety, Health, Environment and
Community (SHE&C) issues for OZ Minerals
Group; managing the risks relating to SHE&C
issues by meeting the Company’s requirements
for internal notification, investigation, reporting
and continuous improvement of SHE&C issues;
and overseeing public reporting and disclosure
processes insofar as they relate to SHE&C risks.
The Directors’ Report presents additional
information on directors and officers, such as
qualifications, experience, special responsibilities
and attendance at OZ Minerals Board meetings
and Board Committee meetings.
(10) On 21 March 2017 OZ Minerals announced changes to the Board which will see Chairman, Neil Hamilton, retire from the Board at OZ Minerals’ Annual General Meeting on 24 May 2017. Current Non-Executive Director, Rebecca
McGrath will succeed him as Chair from that date. Other changes to the board include:
- Paul Dowd to step down as Non-Executive Director at 24 May 2017 Annual General Meeting
- Tonianne Dwyer appointed as Non-Executive Director, effective as of 22 March 2017
- Peter Tomsett appointed as Non-Executive Director, effective as of 22 March 2017
Further information can be found in the Company’s announcement entitled ‘Rebecca McGrath to be appointed Chairman, new directors to join OZ Minerals Board’ released to the ASX on 21 March 2017, and is available at
http://www.ozminerals.com/media/asx/
When the Board reverts to six directors at the Annual General Meeting on 24 May 2017, the proportion of female directors on the board will increase to 50 per cent.
Governance
Management
Structure
OZ Minerals Ltd Board of Directors
Neil Hamilton
Chairman and
Independent Non-
Executive Director10
Andrew Cole
Managing Director
and Chief
Executive Officer
Charles Lenegan
Independent Non-
Executive Director
Julie Beeby
lndependent Non-
Executive Director
Rebecca McGrath
Independent Non-
Executive Director
Paul Dowd
Independent Non-
Executive Director10
The Board has a unitary structure. All non-executive directors, including the Chairman, are independent.
Mr. Dean Pritchard retired as a non-executive director in May 2016.
Audit Committee
Board Committees
Human Resources and
Remuneration Committee
Sustainability Committee
OZ Minerals Ltd Management Team
Andrew Cole
Managing Director
and Chief
Executive Officer
Luke Anderson
Chief Financial
Officer
Robert Fulker
Chief Operating
Officer
Mark Rankmore
Head of Human
Resources and Services
Robert Mancini
Head of Legal and
Company Secretary
Kerrina Chadwick
Head of Corporate
Affairs*
*commenced December 2016
Asset Managers and Line Managers
Employees
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17
Governance
Governance Framework
Company Constitution
Code of Conduct
Board Charter
Audit Committee Charter
Human Resources and Remuneration
Committee Charter
Sustainability
Committee Charter
Policies
Governance and Risk Policy
Health and Safety Policy
To ensure ethical, fit-for-purpose business
processes are used to meet the highest
corporate governance standards and
identify threats and opportunities using
robust processes across OZ Minerals.
To strive to be an injury and occupational
disease free workplace whilst achieving
operational excellence.
Market Dividend Policy
Diversity and Inclusion Policy
To ensure fair trading in the securities of OZ
Minerals and to outline the principles to be
considered for the payment of a dividend by
OZ Minerals in accordance with the ASX listing
rules and Corporations Act.
Finance and Accounting Policy
To ensure OZ Minerals complies with
all financial and accounting regulatory
obligations with a view to being a leader
in fiscal discipline, reporting, disclosure and
transparency.
To foster a culture that values individual
differences which are leveraged to deliver
optimal outcomes for OZ Minerals.
Environment and Community
Policy
To ensure OZ Minerals delivers sound
environmental outcomes whilst supporting
the creation of shared value for the
communities in which we operate.
Exploration and Resource
Development Policy
To underpin the growth of OZ Minerals
by identifying, securing and delivering
additional mineral opportunities outside our
current portfolio.
Operations and Asset
Management Policy
To ensure the safe and effective delivery
of world class operations through sound
application of consistent performance.
Ethics and Human Rights Policy
To help protect the human rights of our
stakeholders and to prevent human rights
breaches from occurring at OZ Minerals’
assets.
Environmental
Social
Safety
Health and Wellbeing
Performance Standards
Process Standards (including Enterprise Risk Management)
Business
Planning
Legal and
Compliance
Finance and
Commercial
Human
Resources
Communications
and Reporting
Information
and Data
Operations and
Engineering
Reference Documents
Asset Documents
Laws and Regulation
Governance Framework
The Governance framework at OZ Minerals has been designed to enable lean
business processes that drive clear accountabilities and create room for innovation.
OZ Minerals is revising its business process
standards so they describe, in the simplest
possible way, processes or the ‘management
activities’ that occur across the business in a
repeatable manner. They are the activities that
we undertake, unique to OZ Minerals, and will
be utilised by OZ Minerals employees and assets.
They define the inputs and outputs required,
the processes people must follow and the
delegations they can work within.
All corporate and further developed asset
documents comply with the laws and regulations
of the jurisdiction the asset is operating within.
We focus on what matters and set processes
that create value, embrace the devolved business
model and provide clarity for new assets,
partners, suppliers and employees coming into
OZ Minerals.
To enable delivery of the Company strategy,
values and behaviours drive transparency and
fair dealing, and propagate a culture of
performance and devolved accountability. OZ
Minerals’ Code of Conduct applies standards for
appropriate ethical and professional behaviour,
and guides OZ Minerals employees, directors,
contractors and partners as to the expectations
of their behaviour.
The Code of Conduct reinforces the importance
of OZ Minerals’ values in carrying out its
responsibilities to shareholders, employees,
customers, suppliers, consumers and the broader
community. It provides clear guidelines as to OZ
Minerals’ expectations in regards to a number
of specific issues, such as conflict of interest,
gifts, entertainment and gratuities, anti-bribery,
fraud and corruption, equal opportunity,
whistleblowing, conflicts of interest and
work expenses.
In February 2016, nine new Company policies
were approved replacing the previous 75. These
policies work synergistically to provide a clear
representation of the intent of OZ Minerals
whilst providing a platform for multiple assets
to work together under a devolved model. Policy
documents are available both internally and
externally to the organisation and are used to
clearly articulate to all stakeholders, partners
and communities what we strive for as an
organisation.
Underpinning the policies are performance
standards grouped into four key areas. These are
safety performance, environmental performance,
health and wellbeing performance, and social
performance. They define the minimum required
performance to manage sustainability threats
and opportunities. These standards will be used
to audit the performance of assets, set the
standards for any new assets to achieve, and are
provided to contractors and partners to articulate
the performance we expect when working at
an OZ Minerals asset. These documents are
structured so that each asset, contractor or
partner can use or develop their own business
standards and processes to meet the OZ Minerals
standards, in keeping with our lean, devolved
business model.
19
Managing Risks,
Threats and Opportunities
OZ Minerals ensures ethical, fit-for-purpose business processes are used to
meet corporate governance standards and regularly identify and manage
threats and opportunities.
OZ Minerals is exposed to numerous risks across
our business, most of which are common to
the mining industry. OZ Minerals' commitment
and approach to managing these risks is
outlined in the Company’s Governance and
Risk Management Policy. OZ Minerals ensures
ethical, fit-for-purpose business processes are
used to meet the highest corporate governance
standards and identify threats and opportunities
using robust processes across the Company.
Our approach is to embed risk management
into all business systems, mining operations and
exploration activities. Risks are ranked with both
pre-mitigating and post-mitigating controls.
These reflect the likelihood of consequences
that could arise from risks, including metrics for
safety and health, environment, community and
government, reputation, financial, production,
organisational effectiveness, compliance and
project management.
A common methodology to identify, assess,
evaluate, treat, monitor and communicate
risks is applied across the business. Each asset
maintains a risk register and the Executive
Committee reviews material risks every quarter,
including the status of action items to mitigate
the material risks.
Financial Risks
Audit
OZ Minerals conducts regular
audits to systematically and
objectively verify conformance
with performance management
standards and legal
requirements, as well as to
provide recommendations
to improve safety, health
and wellbeing, and
environmental and social
performance. Further
audits are undertaken
commensurate with
the risk profile.
Measures to limit risk and financial risk exposure
are explained in Notes to the Consolidated
Financial Statement. Reviewing and monitoring
material risks is one of the responsibilities of the
Board. The Board reviews the Company’s systems
of internal compliance and control, management
of material business risks and legal compliance.
Non-financial Risks
The risk management approach is also aligned
toward non-financial risks. The Sustainability
Committee monitors OZ Minerals’ non-financial
risks, as they relate to safety, health, environment
and community, and their long-term or not
immediate effect.
The Committee’s duty is to ensure that the
systems, processes and guidelines for identifying,
assessing and measuring SHE&C risks of the
OZ Minerals Group are adequately updated
and monitored, including through internal and
external audits.
The management of non-financial risks are
also of interest to financial market analysts and
investors as evidenced by the United Nations
Principles for Responsible Investment (UN PRI),
an investor initiative, which partners with the
UN Environment Programme Finance Initiative
(UNEP) and the UN Global Compact.
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Results for Announcement
Results for Announcement
to the Market
to the Market
Provided below are the results for announcement to the market in accordance with Australian Securities Exchange (‘ASX’) Listing Rule 4.2A and Appendix 4E
for the Consolidated Entity (‘OZ Minerals’ or the ‘Consolidated Entity’) comprising OZ Minerals Limited (‘OZ Minerals Limited’ or the ‘Company’) and its
controlled entities for the year ended 31 December 2016 (the ‘financial year’) compared with the year ended 31 December 2015 ('comparative year').
Consolidated results, commentary on results and outlook
Revenue
Profit after tax attributable to equity holders
of OZ Minerals Limited
31 December
2016
$m
822.9
31 December
2015
$m
879.4
107.8
130.2
Movement
$m
(56.5)
(22.4)
Movement
percent
(6.4)
(17.2)
The commentary on the consolidated results and outlook, including changes in state of affairs and likely developments of the Consolidated Entity, are set out
in the Operational and Financial Review section of the Directors’ Report.
Net tangible assets per share
Net tangible assets per share
31 December
2016
$ per share
31 December
2015
$ per share
7.04
6.89
In accordance with Chapter 19 of the ASX listing rules, net tangible assets per share represent total assets less intangible assets less liabilities ranking ahead
of, or equally with, ordinary share capital, divided by the number of ordinary shares on issue at the end of the financial year.
Dividends
Since the end of the financial year, the Board of Directors has resolved to pay a fully franked dividend of 14.0 cents per share, to be paid on 24 March 2017.
The record date for entitlement to this dividend is 10 March 2017. The financial impact of the dividend amounting to $41.8 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2016, and will be recognised in subsequent Consolidated Financial Statements.
The details in relation to dividends announced or paid since 1 January 2015 are set out below:
Record date
Date of payment
10 March 2017
24 March 2017
9 September 2016
23 September 2016
24 February 2016
10 March 2016
10 September 2015
24 September 2015
Unfranked
cents per share(a)
–
Fully franked
cents per share
14
6
14
6
–
–
–
Total dividends $m
41.8
18.1
42.5
18.2
(a) For Australian income tax purposes, all unfranked dividends were declared to be conduit foreign income
Independent auditor's report
The Consolidated Financial Statements upon which this Appendix 4E is based have been audited and the Independent Auditor's Report to the members of OZ
Minerals Limited is included in the attached Financial Report.
3
Finance
Results for Announcement
to the Market
Directors’ Report
Directors’ Report
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Provided below are the results for announcement to the market in accordance with Australian Securities Exchange (‘ASX’) Listing Rule 4.2A and Appendix 4E
for the Consolidated Entity (‘OZ Minerals’ or the ‘Consolidated Entity’) comprising OZ Minerals Limited (‘OZ Minerals Limited’ or the ‘Company’) and its
controlled entities for the year ended 31 December 2016 (the ‘financial year’) compared with the year ended 31 December 2015 ('comparative year').
Your directors present their report for OZ Minerals for the year ended 31 December 2016 together with the Consolidated Financial Statements. OZ Minerals
Limited is a company limited by shares that is incorporated and domiciled in Australia.
Directors
The directors of the Company during the year ended 31 December 2016 and up to the date of this report are set out below. Directors were in office for the
entire period unless otherwise stated.
Neil Hamilton (Non-executive Director and Chairman)
Andrew Cole (Managing Director and Chief Executive Officer)
Dr Julie Beeby (appointed as a Non-executive Director on 19 April 2016)
Paul Dowd
Charles Lenegan
Rebecca McGrath
Dean Pritchard (retired as a Non-executive Director on 24 May 2016)
Principal activities
The principal activities of the Consolidated Entity during the year were the mining and processing of ore containing copper, gold and silver, sales of
concentrate, undertaking exploration activities, and development of mining projects, mainly in Australia. For additional information on the activities of the
Consolidated Entity refer to the Operational and Financial Review section in the Director’s Report.
Significant changes in the state of affairs
There were significant changes in the state of affairs of the Consolidated Entity during the financial year ended 31 December 2016. Refer to the Operational
and Financial Review section for discussion of these changes in the state of affairs of the Consolidated Entity.
Dividends
Since the end of the financial year, the Board of Directors has resolved to pay a fully franked dividend of 14.0 cents per share, to be paid on 24 March 2017.
The record date for entitlement to this dividend is 10 March 2017. The financial impact of the dividend amounting to $41.8 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2016, and will be recognised in subsequent Consolidated Financial Statements.
The details in relation to dividends announced or paid since 1 January 2015 are set out below:
Consolidated results, commentary on results and outlook
31 December
31 December
2016
$m
822.9
107.8
2015
$m
879.4
130.2
Movement
$m
(56.5)
(22.4)
Movement
percent
(6.4)
(17.2)
The commentary on the consolidated results and outlook, including changes in state of affairs and likely developments of the Consolidated Entity, are set out
in the Operational and Financial Review section of the Directors’ Report.
Revenue
Profit after tax attributable to equity holders
of OZ Minerals Limited
Net tangible assets per share
Net tangible assets per share
Dividends
In accordance with Chapter 19 of the ASX listing rules, net tangible assets per share represent total assets less intangible assets less liabilities ranking ahead
of, or equally with, ordinary share capital, divided by the number of ordinary shares on issue at the end of the financial year.
31 December
2016
$ per share
31 December
2015
$ per share
7.04
6.89
Since the end of the financial year, the Board of Directors has resolved to pay a fully franked dividend of 14.0 cents per share, to be paid on 24 March 2017.
The record date for entitlement to this dividend is 10 March 2017. The financial impact of the dividend amounting to $41.8 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2016, and will be recognised in subsequent Consolidated Financial Statements.
The details in relation to dividends announced or paid since 1 January 2015 are set out below:
Record date
Date of payment
Unfranked
cents per share(a)
Fully franked
cents per share
Total dividends $m
10 March 2017
24 March 2017
9 September 2016
23 September 2016
24 February 2016
10 March 2016
10 September 2015
24 September 2015
(a) For Australian income tax purposes, all unfranked dividends were declared to be conduit foreign income
Independent auditor's report
14
–
–
–
41.8
18.1
42.5
18.2
–
6
14
6
3
–
–
–
6
14
6
4
The Consolidated Financial Statements upon which this Appendix 4E is based have been audited and the Independent Auditor's Report to the members of OZ
Minerals Limited is included in the attached Financial Report.
(a) For Australian income tax purposes, all unfranked dividends were declared to be conduit foreign income
Record date
Date of payment
10 March 2017
24 March 2017
9 September 2016
23 September 2016
24 February 2016
10 March 2016
10 September 2015
24 September 2015
Total dividends $m
41.8
18.1
42.5
18.2
23
Unfranked
cents per share(a)
–
Fully franked
cents per share
14
Directors’ Report
Directors’ Report
Information on directors and officers
Particulars of the qualifications, experience and special responsibilities of each person who was a Director during the year ended 31 December 2016 and up to
the date of this report are set out below:
Director
Experience and expertise
Other current
listed entity
directorships
Former listed entity
directorships in last
three years
OZ Minerals special
responsibilities
during the year
None
Non-executive Director
of Metcash Limited from
February 2008 to
August 2016
Chairman of
OZ Minerals Limited
Board
Member of Human
Resources &
Remuneration
Committee
None
None
Managing Director &
Chief Executive Officer
Current directors
Neil Hamilton
Independent
Non-executive
Chairman
Appointed as a
Non-executive
Director on
9 February 2010
and Chairman on
13 April 2010
LLB
Andrew Cole
Managing
Director and
Chief Executive
Officer
Appointed on
3 December
2014
BAppSc (Hons) in
Geophysics
MAICD
Mr Hamilton is an experienced professional
Company Director and Chairman. He has
over 35 years' experience in the legal
profession and in business with substantial
experience in senior management positions
and on boards of public companies across
law, funds management, investment,
insurance and resources.
Mr Hamilton has broad directorship
experience across a range of ASX listed
companies. He is the former Chairman of
Challenge Bank Ltd, Western Power
Corporation, Mount Gibson Iron Ltd, Iress
Market Technology Ltd and Miclyn Express
Offshore Ltd. Mr Hamilton is also a Senior
Advisor to UBS.
Mr Cole has over 20 years’ experience in
exploration and operations in the resources
industry. Following exploration geoscientist
roles in Australia, Canada, USA and Mexico
with Rio Tinto Exploration (CRA and
Kennecott), Mr Cole spent 10 years in mine
development and mine operations with Rio
Tinto in Australia, China, Canada and the
United Kingdom.
During his career at Rio Tinto, Mr Cole held
various senior and leadership positions,
including General Manager Operations of
the Clermont Region Operations, including
the Blair Athol Mine and Clermont Mine,
Chief Executive Officer of Chinalco Rio Tinto
Exploration and Chief Operating Officer of
Rio Tinto Iron and Titanium.
Mr Cole is a Councilor of SACOME (South
Australian Chamber of Mines and Energy).
5
Directors’ Report
Directors’ Report
Particulars of the qualifications, experience and special responsibilities of each person who was a Director during the year ended 31 December 2016 and up to
Director
Experience and expertise
Other current
listed entity
directorships
Former listed entity
directorships in last
three years
OZ Minerals special
responsibilities
during the year
Current directors
Dr Julie Beeby
Independent
Non-executive
Director
Appointed on
19 April 2016
BSc (Hons I), PhD
(Physical
Chemistry),
MBA, FAICD
Paul Dowd
Independent
Non-executive
Director
Appointed on
23 July 2009
BSc (Eng)
Charles
Lenegan
Independent
Non-executive
Director
Appointed on
9 February 2010
BSc (Econ)
Dr Beeby was the former Chief Executive
Officer of Brisbane based gas producer,
Westside Corporation. Dr Beeby has more than
25 years’ experience in the resources sector,
including the minerals and petroleum
industries. Dr Beeby also has experience in
mergers and acquisitions.
Chairman of Powerlink Qld (Qld Electricity
Transmission Corporation Ltd) since 2014, and
has been a board member since 2008.
Mr Dowd is a mining engineer and has been in
mining for 50 years, primarily in the private
sector, but also serving in the Public Sector as
head of the Victorian Mines and Petroleum
Departments. He has held senior executive
positions with Newmont and prior to that
Normandy, including as Managing Director of
Newmont Australia Limited and Vice President
of Australia and New Zealand Operations for
Newmont Mining Corporation. Mr Dowd
currently has various advisory positions with
councils and groups, including the SA Minerals
and Petroleum Expert Group (SAMPEG), and
the University of Queensland - Sustainable
Minerals Institute Board.
Mr Dowd is Chairman of the CSIRO Minerals
Resources Sector Advisory Council, and was
the Inaugural Chairman of RESA from
September 2006 to May 2015 and Non-
executive Director of RESA from May 2015 to
present.
Mr Lenegan was a former Managing Director
of Rio Tinto Australia. Mr Lenegan had a
distinguished 27-year career with Rio Tinto
where he held various senior management
positions across a range of commodities and
geographies. Mr Lenegan was formerly the
Chairman of the Minerals Council of Australia
and a former board member of the Business
Council of Australia. Mr Lenegan is currently
Chairman of Bis Industries Limited (non-ASX
listed company).
Member of the
Sustainability
Committee
Member of the Human
Resources &
Remuneration
Committee
Chairman of the
Sustainability
Committee
Member of Audit
Committee
Non-executive
Director of
Whitehaven Coal
Ltd since July 2015
Non-executive
Director of Forge
Group Limited from
September 2013 to
February 2014
None
Non-executive
Director of PNX
Metals Limited since
April 2012
(previously
Managing Director
from September
2008 to April 2012)
Non-executive
Director of Energy
Resources of
Australia Ltd from
October 2015 to
present
None
Non-executive
Director of Turquoise
Hill Resources from
August 2012 to May
2014
Chairman of the Audit
Committee
Member of
Sustainability
Committee
Other current
listed entity
directorships
Former listed entity
directorships in last
three years
OZ Minerals special
responsibilities
during the year
Non-executive Director
Chairman of
of Metcash Limited from
OZ Minerals Limited
February 2008 to
August 2016
Board
Member of Human
Resources &
Remuneration
Committee
None
None
Managing Director &
Chief Executive Officer
Neil Hamilton
Mr Hamilton is an experienced professional
None
Information on directors and officers
the date of this report are set out below:
Director
Experience and expertise
Current directors
Independent
Non-executive
Chairman
Appointed as a
Non-executive
Director on
9 February 2010
and Chairman on
13 April 2010
LLB
Andrew Cole
Managing
Director and
Chief Executive
Officer
Appointed on
3 December
2014
BAppSc (Hons) in
Geophysics
MAICD
Company Director and Chairman. He has
over 35 years' experience in the legal
profession and in business with substantial
experience in senior management positions
and on boards of public companies across
law, funds management, investment,
insurance and resources.
Mr Hamilton has broad directorship
experience across a range of ASX listed
companies. He is the former Chairman of
Challenge Bank Ltd, Western Power
Corporation, Mount Gibson Iron Ltd, Iress
Market Technology Ltd and Miclyn Express
Offshore Ltd. Mr Hamilton is also a Senior
Advisor to UBS.
Mr Cole has over 20 years’ experience in
exploration and operations in the resources
industry. Following exploration geoscientist
roles in Australia, Canada, USA and Mexico
with Rio Tinto Exploration (CRA and
Kennecott), Mr Cole spent 10 years in mine
development and mine operations with Rio
Tinto in Australia, China, Canada and the
United Kingdom.
During his career at Rio Tinto, Mr Cole held
various senior and leadership positions,
including General Manager Operations of
the Clermont Region Operations, including
the Blair Athol Mine and Clermont Mine,
Chief Executive Officer of Chinalco Rio Tinto
Exploration and Chief Operating Officer of
Rio Tinto Iron and Titanium.
Mr Cole is a Councilor of SACOME (South
Australian Chamber of Mines and Energy).
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Directors’ Report
Directors’ Report
Director
Experience and expertise
Other current
listed entity
directorships
Former listed entity
directorships in last
three years
OZ Minerals special
responsibilities
during the year
Ms McGrath was the former Chief Financial
Officer and a member of BP’s Executive
Management Board for Australia and New
Zealand. Ms McGrath was also the former Vice
President Operations BP Australia and Pacific
and General Manager, Group Marketing
Performance BP Plc (London). She is a former
Director of Big Sky Credit Union and in
addition to her Bachelor and Master Degrees,
she is a graduate of the Cambridge University
Business and Environment program.
Ms McGrath is also a member of the JP
Morgan Advisory Council, Chairman of Investa
Office Management Holdings Pty Ltd and a
member of the Victorian division of the
Australian institute of Company Directors.
Mr Pritchard has over 30 years of experience in
the engineering and construction industry. He
was previously Chairman of ICS Global
Limited, a Director of RailCorp, Zinifex Limited
and Eraring Energy and Chief Executive Officer
of Baulderstone Hornibrook.
Current directors
Rebecca
McGrath
Independent
Non-executive
Director
Appointed on
9 November
2010
BTP (Hons),
MA (Ap.Sc),
FAICD
Former directors
Dean Pritchard
Independent
Non-executive
Director
Appointed on
20 June 2008
BE, FIE Aust, CP
Eng, FAICD
Dean Pritchard
retired as a Non-
executive
Director on 24
May 2016.
Head of Legal and Company Secretary
Mr Robert Mancini Head of Legal and Company Secretary
LLB, BCom
Non-executive
Director of Incitec
Pivot Limited since
September 2011
Non-executive
Director of CSR
Limited from February
2012 to October 2016
Chairman of Human
Resources &
Remuneration
Committee
Non-executive
Director of
Goodman Group
since April 2012
Member of the Audit
Committee
Non-executive
Director of Arrium
Limited (previously
One Steel Limited)
from October 2000 to
November 2014
Member of the
Sustainability
Committee
Member of the Human
Resources &
Remuneration
Committee
Non-executive
Director of Steel &
Tube Holdings
Limited (a New
Zealand listed
company) since May
2005
Non-executive
Director of
Broadspectrum
Limited (previously
Transfield Services
Limited) since
October 2013
Robert Mancini LLB, BCom was appointed Head of Legal and Company Secretary of OZ Minerals Ltd effective on 17 August 2015. Mr Mancini holds a
Bachelor of Laws and a Bachelor of Commerce majoring in Economics and Finance. Prior to joining OZ Minerals, Mr Mancini was Senior Legal Counsel at
Clough Ltd, General Manager of Legal at UGL Ltd and Group General Counsel at Forge Group Ltd. Together with corporate and continuous disclosure
compliance, Mr Mancini is experienced in negotiating large scale EPC and EPCM infrastructure contracts in the Oil & Gas and Mining sectors, both
domestically and internationally, as well as dispute resolution management.
7
Finance
Directors’ Report
Directors’ Report
Director
Experience and expertise
Other current
listed entity
directorships
Former listed entity
directorships in last
three years
OZ Minerals special
responsibilities
during the year
Ms McGrath was the former Chief Financial
Officer and a member of BP’s Executive
Management Board for Australia and New
Non-executive
Director of Incitec
Pivot Limited since
Zealand. Ms McGrath was also the former Vice
September 2011
Non-executive
Director of CSR
Limited from February
2012 to October 2016
Chairman of Human
Resources &
Remuneration
Committee
Non-executive
Director of
Goodman Group
since April 2012
Member of the Audit
Committee
President Operations BP Australia and Pacific
and General Manager, Group Marketing
Performance BP Plc (London). She is a former
Director of Big Sky Credit Union and in
addition to her Bachelor and Master Degrees,
she is a graduate of the Cambridge University
Business and Environment program.
Ms McGrath is also a member of the JP
Morgan Advisory Council, Chairman of Investa
Office Management Holdings Pty Ltd and a
member of the Victorian division of the
Australian institute of Company Directors.
Dean Pritchard
Mr Pritchard has over 30 years of experience in
Non-executive
the engineering and construction industry. He
Director of Steel &
was previously Chairman of ICS Global
Limited, a Director of RailCorp, Zinifex Limited
and Eraring Energy and Chief Executive Officer
Tube Holdings
Limited (a New
Zealand listed
of Baulderstone Hornibrook.
company) since May
November 2014
Non-executive
Director of Arrium
Limited (previously
One Steel Limited)
from October 2000 to
Member of the
Sustainability
Committee
Resources &
Remuneration
Committee
Member of the Human
Current directors
Rebecca
McGrath
Independent
Non-executive
Director
Appointed on
9 November
2010
BTP (Hons),
MA (Ap.Sc),
FAICD
Former directors
Independent
Non-executive
Director
Appointed on
20 June 2008
BE, FIE Aust, CP
Eng, FAICD
Dean Pritchard
retired as a Non-
executive
Director on 24
May 2016.
2005
Non-executive
Director of
Broadspectrum
Limited (previously
Transfield Services
Limited) since
October 2013
Head of Legal and Company Secretary
Mr Robert Mancini Head of Legal and Company Secretary
LLB, BCom
Robert Mancini LLB, BCom was appointed Head of Legal and Company Secretary of OZ Minerals Ltd effective on 17 August 2015. Mr Mancini holds a
Bachelor of Laws and a Bachelor of Commerce majoring in Economics and Finance. Prior to joining OZ Minerals, Mr Mancini was Senior Legal Counsel at
Clough Ltd, General Manager of Legal at UGL Ltd and Group General Counsel at Forge Group Ltd. Together with corporate and continuous disclosure
compliance, Mr Mancini is experienced in negotiating large scale EPC and EPCM infrastructure contracts in the Oil & Gas and Mining sectors, both
domestically and internationally, as well as dispute resolution management.
Attendance at meetings
The number of meetings of OZ Minerals Limited’s Board of Directors and of each Board Committee held from the beginning of the financial year until 31
December 2016, and the number of meetings attended by each director is set out below.
Board meetings
Board Committee meetings
Audit
Human Resources and
Remuneration
Sustainability
Neil Hamilton
Andrew Cole
Dr Julie Beeby(c)
Paul Dowd
Charles Lenegan
Rebecca McGrath
Dean Pritchard(d)
A
12
12
9
12
11
12
5
B
12
12
9
12
12
12
6
A
5
6
4
6
6
6
2
B
6
6
4
6
6
6
3
A
5
5
2
2
3
5
3
B
5
5
3
5
5
5
3
A
1
4
3
4
4
2
1
B
4
4
3
4
4
4
2
A Number of meetings attended. Note that directors may attend Committee meetings without being a member of that Committee.
B Number of meetings held during the time the director held office.
C Dr Julie Beeby was appointed as a Non-executive Director on 19 April 2016.
D Dean Pritchard retired as a Non-executive Director on 24 May 2016.
Directors’ interests
The relevant interests of each director in the ordinary shares of OZ Minerals Limited at the date of this report are set out below:
Director
Neil Hamilton
Andrew Cole
Julie Beeby
Paul Dowd
Charles Lenegan
Rebecca McGrath
Total
7
8
Shares
number
39,500
10,000
8,000
10,800
20,750
20,645
109,695
27
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Environmental regulation
OZ Minerals is subject to environmental regulation with respect to its activities in both Australia and overseas. In addition to the licensing and permit
arrangements which apply to its overseas activities, the Consolidated Entity’s Prominent Hill operations, Carrapteena project, other Australian exploration
activities and its concentrate shipping activities operate under various licences and permits under the laws of the Commonwealth, States and Territories.
Compliance with the Consolidated Entity’s licenses and permits is monitored on a regular basis and in various forms, including environmental audits
conducted by the Consolidated Entity, regulatory authorities and other third parties. A documented process is used by the Consolidated Entity to classify and
report any exceedance of a licence condition or permit condition, as well as any incident reportable to the relevant authorities. As part of this process, all
reportable environmental non-compliances and significant incidents are reviewed by the Executive Committee and the Sustainability Committee of the OZ
Minerals Board of Directors. These incidents require a formal report to be prepared identifying the factors that contributed to the incident or non-compliance
and the actions taken to prevent any reoccurrence.
During the year, OZ Minerals completed its eighth report under the National Greenhouse and Energy Report Act 2009 (‘NGERS’). Prior to the submission of
the report, a comprehensive independent audit was conducted on the processes that OZ Minerals developed to meet the requirements of the NGERS Act. The
audit provided assurance that the reported emissions, energy production and energy consumption were prepared in accordance with the NGERS Act.
Insurance and indemnity
During the financial year, the Company paid premiums in respect of a contract insuring directors and officers of the Company and its related bodies corporate
against certain liabilities incurred while acting in that capacity. The contract of insurance prohibits the disclosure of the nature of the liability and the amount
of the insurance premium.
The Company’s Constitution also allows OZ Minerals to provide an indemnity, to the extent permitted by law, to officers of the Company, or its related bodies
corporate in relation to liability incurred by an officer when acting in that capacity on behalf of the Company or a related body corporate.
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. The
Consolidated Entity has a policy that it will, as a general rule, support and hold harmless an employee who, while acting in good faith, incurs personal liability
to others as a result of working for the Consolidated Entity.
No indemnity has been granted to an auditor of the Consolidated Entity in their capacity as auditors of the Consolidated Entity.
Proceedings on behalf of the Consolidated Entity
At the date of this report there are no leave applications or proceedings brought on behalf of the Consolidated Entity under section 237 of the Corporations
Act 2001.
9
Finance
Directors’ Report
Directors’ Report
OZ Minerals is subject to environmental regulation with respect to its activities in both Australia and overseas. In addition to the licensing and permit
arrangements which apply to its overseas activities, the Consolidated Entity’s Prominent Hill operations, Carrapteena project, other Australian exploration
activities and its concentrate shipping activities operate under various licences and permits under the laws of the Commonwealth, States and Territories.
Compliance with the Consolidated Entity’s licenses and permits is monitored on a regular basis and in various forms, including environmental audits
conducted by the Consolidated Entity, regulatory authorities and other third parties. A documented process is used by the Consolidated Entity to classify and
report any exceedance of a licence condition or permit condition, as well as any incident reportable to the relevant authorities. As part of this process, all
reportable environmental non-compliances and significant incidents are reviewed by the Executive Committee and the Sustainability Committee of the OZ
Minerals Board of Directors. These incidents require a formal report to be prepared identifying the factors that contributed to the incident or non-compliance
and the actions taken to prevent any reoccurrence.
During the year, OZ Minerals completed its eighth report under the National Greenhouse and Energy Report Act 2009 (‘NGERS’). Prior to the submission of
the report, a comprehensive independent audit was conducted on the processes that OZ Minerals developed to meet the requirements of the NGERS Act. The
audit provided assurance that the reported emissions, energy production and energy consumption were prepared in accordance with the NGERS Act.
During the financial year, the Company paid premiums in respect of a contract insuring directors and officers of the Company and its related bodies corporate
Insurance and indemnity
of the insurance premium.
The Company’s Constitution also allows OZ Minerals to provide an indemnity, to the extent permitted by law, to officers of the Company, or its related bodies
corporate in relation to liability incurred by an officer when acting in that capacity on behalf of the Company or a related body corporate.
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. The
Consolidated Entity has a policy that it will, as a general rule, support and hold harmless an employee who, while acting in good faith, incurs personal liability
to others as a result of working for the Consolidated Entity.
No indemnity has been granted to an auditor of the Consolidated Entity in their capacity as auditors of the Consolidated Entity.
Proceedings on behalf of the Consolidated Entity
At the date of this report there are no leave applications or proceedings brought on behalf of the Consolidated Entity under section 237 of the Corporations
Act 2001.
Environmental regulation
Audit and non-audit services
KPMG continues in office in accordance with the Corporations Act 2001. A copy of the external Auditor’s Independence Declaration as required under section
307C of the Corporations Act 2001 is set out on page 47 and forms part of the Directors’ Report.
The Company, with the approval of the Audit Committee, may decide to employ the external auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Consolidated Entity are important, and where these services do not impair the external auditor’s
independence.
Details of the amounts paid or payable to the external auditor (KPMG) and its network firms for audit and non-audit services provided during the year are set
out below.
against certain liabilities incurred while acting in that capacity. The contract of insurance prohibits the disclosure of the nature of the liability and the amount
Total fees for audit services provided by KPMG
Audit services provided by KPMG
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
audit of subsidiary Financial Statements
KPMG Australia
Overseas KPMG firms
Other services provided by KPMG Australia
Taxation compliance and other taxation advisory services
Other services
Total fees for other services provided by KPMG Australia
Total fees
2016
$
439,722
34,990
474,712
160,124
77,025
237,149
711,861
The Audit Committee has, following the passing of a resolution by the Committee, provided the Board with advice in relation to the provision of non-audit
services by KPMG.
In accordance with the advice received from the Audit Committee, the Board is satisfied that the provision of the non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by
the auditor, as set out in the table above, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
•
•
All non-audit services have been reviewed by the Audit Committee to ensure they did not impact the integrity and objectivity of the external auditor; and
None of the services undermined the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for OZ Minerals Limited or
its controlled entities, acting as advocate for the Company or jointly sharing economic risk and rewards.
Matters subsequent to the end of the financial year
Since the end of the financial year, the Board of Directors has resolved to pay a fully franked dividend of 14.0 cents per share, to be paid on 24 March 2017.
The record date for entitlement to this dividend is 10 March 2017. The financial impact of the dividend amounting to $41.8 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2016, and will be recognised in subsequent Consolidated Financial Statements.
There have been no other events that have occurred subsequent to the reporting date which have significantly affected or may significantly affect the
Consolidated Entity’s operations or results in future years.
9
10
29
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Directors’ Report
Rounding of amounts
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in Financial/Directors' Reports). Amounts in the Financial
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in Financial/Directors' Reports). Amounts in the Financial
Statements and Directors’ Report have been rounded off in accordance with the Instrument to the nearest million dollars to one decimal place, or in certain
Statements and Directors’ Report have been rounded off in accordance with the Instrument to the nearest million dollars to one decimal place, or in certain
cases, to the nearest dollar. All amounts are in Australian dollars only, unless otherwise stated.
cases, to the nearest dollar. All amounts are in Australian dollars only, unless otherwise stated.
Operational and Financial Review
Operational and Financial Review
The Operational and Financial Review is set out on pages 31 to 47, and forms part of the Directors’ Report.
The Operational and Financial Review is set out on pages 31 to 47, and forms part of the Directors’ Report.
Remuneration Report
Remuneration Report
The Remuneration Report which has been audited by KPMG is set out on pages 52 to 67, and forms part of the Directors’ Report.
The Remuneration Report which has been audited by KPMG is set out on pages 52 to 67, and forms part of the Directors’ Report.
Corporate Governance Statement
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the
The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the
governance framework and has practices in place to ensure they meet the interests of shareholders.
governance framework and has practices in place to ensure they meet the interests of shareholders.
The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd
The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd
Edition (‘the ASX Principles’). OZ Minerals’ Corporate Governance Statement, which summarises the Company’s corporate governance practices and
Edition (‘the ASX Principles’). OZ Minerals’ Corporate Governance Statement, which summarises the Company’s corporate governance practices and
incorporates the disclosures required by the ASX Principles, can be viewed at http://www.ozminerals.com/about/corporate-governance/corporate-governance-
incorporates the disclosures required by the ASX Principles, can be viewed at http://www.ozminerals.com/about/corporate-governance/corporate-governance-
statement/.
statement/.
Signed in accordance with a resolution of the Directors.
Signed in accordance with a resolution of the Directors.
Neil Hamilton
Neil Hamilton
Chairman
Chairman
Perth
Perth
23 February 2017
23 February 2017
Andrew Cole
Andrew Cole
Managing Director and Chief Executive Officer
Managing Director and Chief Executive Officer
Adelaide
Adelaide
23 February 2017
23 February 2017
11
11
Finance
Directors’ Report
Directors’ Report
Directors’ Report
Rounding of amounts
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in Financial/Directors' Reports). Amounts in the Financial
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in Financial/Directors' Reports). Amounts in the Financial
Statements and Directors’ Report have been rounded off in accordance with the Instrument to the nearest million dollars to one decimal place, or in certain
Statements and Directors’ Report have been rounded off in accordance with the Instrument to the nearest million dollars to one decimal place, or in certain
cases, to the nearest dollar. All amounts are in Australian dollars only, unless otherwise stated.
cases, to the nearest dollar. All amounts are in Australian dollars only, unless otherwise stated.
Operational and Financial Review
Operational and Financial Review
The Operational and Financial Review is set out on pages 31 to 47, and forms part of the Directors’ Report.
The Operational and Financial Review is set out on pages 31 to 47, and forms part of the Directors’ Report.
The Remuneration Report which has been audited by KPMG is set out on pages 52 to 67, and forms part of the Directors’ Report.
The Remuneration Report which has been audited by KPMG is set out on pages 52 to 67, and forms part of the Directors’ Report.
Remuneration Report
Remuneration Report
Corporate Governance Statement
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the
The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the
governance framework and has practices in place to ensure they meet the interests of shareholders.
governance framework and has practices in place to ensure they meet the interests of shareholders.
The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd
The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd
Edition (‘the ASX Principles’). OZ Minerals’ Corporate Governance Statement, which summarises the Company’s corporate governance practices and
Edition (‘the ASX Principles’). OZ Minerals’ Corporate Governance Statement, which summarises the Company’s corporate governance practices and
incorporates the disclosures required by the ASX Principles, can be viewed at http://www.ozminerals.com/about/corporate-governance/corporate-governance-
incorporates the disclosures required by the ASX Principles, can be viewed at http://www.ozminerals.com/about/corporate-governance/corporate-governance-
statement/.
statement/.
Signed in accordance with a resolution of the Directors.
Signed in accordance with a resolution of the Directors.
Neil Hamilton
Neil Hamilton
Chairman
Chairman
Perth
Perth
23 February 2017
23 February 2017
Managing Director and Chief Executive Officer
Managing Director and Chief Executive Officer
Andrew Cole
Andrew Cole
Adelaide
Adelaide
23 February 2017
23 February 2017
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
11
11
31
12
Annual and Sustainability Report 2016
Directors’ Report
Operational and Financial Review
Copper (tonnes)
Gold (ounces)
C1 costs
Ore milled
d
e
c
u
d
o
r
p
2010
140
112,171
120
196,400
100
46.5
80
9,537
60
s
e
n
n
o
t
Copper (tonnes)
2011
2012
Copper (tonnes)
107,744
101,737
160,007
140,746
70.4
120.0
9,891
9,648
2013
73,362
128,045
179.6
9,499
2014
116.9
92,615
148,192
90.7
9,871
40
s
d
n
a
s
u
o
h
T
-
20
Directors’ Report
Directors’ Report
2010
2011
Directors’ Report
Directors’ Report
Ore milled
12
2012
2013
2014
2015
2016
Ore milled
10
8
9.5
d
e
l
l
i
250
Gold (ounces)
2015
2016
Gold (ounces)
116,900
130,305
200
113,028
118,300
70.1
74.1
10,589
9,507
150
118 .3
100
50
-
200
180
160
140
2010
2011
2012
2013
2014
2015
2016
C1 costs
C1 costs
d
e
c
u
d
o
r
p
s
e
c
n
u
o
s
d
n
a
s
u
o
h
T
r
e
p
p
o
c
f
o
120
-
-
2
4
6
i
l
l
i
20
40
60
80
100
74.1
2013
2015
2016
2011
2014
2010
2010
2011
2012
2013
2014
2015
d
n
u
o
p
d
e
c
u
d
o
r
p
m
s
e
n
n
o
t
n
o
r
e
p
s
t
n
e
c
S
U
Nameplate
capacity 8Mtpa
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
M
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
2012
2016
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
• Copper guidance achieved for 2016 and for the second consecutive year;
commitment to operating discipline. Highlights for Prominent Hill were:
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
commitment to operating discipline. Highlights for Prominent Hill were:
Operational and Financial Review
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
commitment to operating discipline. Highlights for Prominent Hill were:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the project is currently underway with a number of milestones achieved in 2016:
companies which provides exploration expertise in specific geologies and locations.
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
• Construction commenced on the Tjati decline; and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Successful completion of the PFS with robust financials and short payback period;
companies which provides exploration expertise in specific geologies and locations.
• Construction commenced on the Tjati decline; and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Construction commenced on the Tjati decline; and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
12
12
12
12
12
12
12
Directors’ Report
Operational and Financial Review
• Three earn-in agreements signed in 2015 (Mt Woods, Eloise and Yandal One) have progressed, and Jamaica exited.
15
Finance
2010
140
Copper (tonnes)
2012
2011
2013
2014
250
2015
Gold (ounces)
2016
Copper (tonnes)
Gold (ounces)
C1 costs
Ore milled
112,171
d
120
e
c
196,400
u
d
o
100
r
46.5
p
80
s
e
9,537
n
107,744
160,007
101,737
140,746
70.4
9,891
120.0
9,648
73,362
128,045
179.6
9,499
116.9
92,615
148,192
90.7
9,871
130,305
200
113,028
70.1
150
10,589
116,900
118,300
74.1
9,507
n
o
t
s
d
n
a
s
u
o
h
T
60
40
20
-
12
10
8
6
4
2
-
d
e
l
l
i
m
s
e
n
n
o
t
n
o
i
l
l
i
M
Nameplate
capacity
2010
2011
2012
2013
2014
2015
2016
2010
2011
2012
2013
2014
2015
2016
Ore milled
9.5
C1 costs
2010
2011
2012
2013
2014
2015
2016
2010
2011
2012
2013
2014
2015
2016
118 .3
74.1
d
e
c
u
d
o
r
p
s
e
c
n
u
o
s
d
n
a
s
u
o
h
T
r
e
p
p
o
c
f
o
d
n
u
o
p
r
e
p
s
t
n
e
c
S
U
100
50
-
200
180
160
140
120
100
80
60
40
20
-
d
e
c
u
d
o
r
p
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Directors’ Report
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
Directors’ Report
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Capital Discipline
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
Directors’ Report
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
Directors’ Report
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
Capital Discipline
• Production and costs in line with annual guidance;
Capital Discipline
Capital Discipline
Capital Discipline
Capital Discipline
Capital Discipline
Capital Discipline
Capital Discipline
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
Directors’ Report
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
• Strong financial results delivered, underpinned by Prominent Hill performance despite power outage and weather related events;
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
commitment to operating discipline. Highlights for Prominent Hill were:
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Production and costs in line with annual guidance;
positioned for growth.
• Production and costs in line with annual guidance;
• Production and costs in line with annual guidance;
• Production and costs in line with annual guidance;
• Production and costs in line with annual guidance;
• Production and costs in line with annual guidance;
• Production and costs in line with annual guidance;
• Production and costs in line with annual guidance;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
• Approximately $40 million in annualised savings through procurement savings program;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Copper guidance achieved for 2016 and for the second consecutive year;
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
• Prominent Hill cash costs remain in the bottom quartile of global copper producers;
Directors’ Report
• Healthy cash balance which will assist in advancing Carrapateena;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
• Approximately $40 million in annualised savings through procurement savings program;
commitment to operating discipline. Highlights for Prominent Hill were:
positioned for growth.
Directors’ Report
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
• Healthy cash balance which will assist in advancing Carrapateena;
Directors’ Report
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
commitment to operating discipline. Highlights for Prominent Hill were:
positioned for growth.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Operational and Financial Review
of the project is currently underway with a number of milestones achieved in 2016:
copper deposits at Carrapateena.
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
• Expertise of exploration joint venture partners leveraged to maximise value from exploration expenditure; and
Directors’ Report
commitment to operating discipline. Highlights for Prominent Hill were:
positioned for growth.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Strong Values
Operational and Financial Review
• Successful completion of the PFS with robust financials and short payback period;
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
• Strong returns to shareholders through payment of dividends of $60.6 million and share buyback of $29.9 million.
copper deposits at Carrapateena.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the project is currently underway with a number of milestones achieved in 2016:
copper deposits at Carrapateena.
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Directors’ Report
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
commitment to operating discipline. Highlights for Prominent Hill were:
positioned for growth.
Strong Values
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
Strong Values
Strong Values
Strong Values
Strong Values
Strong Values
Strong Values
Strong Values
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
• Alignment of employees and contractors to OZ Minerals’ strategy through proactive leadership and communication across business;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Copper guidance achieved for 2016 and for the second consecutive year;
commitment to operating discipline. Highlights for Prominent Hill were:
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
positioned for growth.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the project is currently underway with a number of milestones achieved in 2016:
Directors’ Report
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
copper deposits at Carrapateena.
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
• Clearly defined principles define the way we work to engender an innovative high performance culture; and
commitment to operating discipline. Highlights for Prominent Hill were:
positioned for growth.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Operational and Financial Review
Directors’ Report
• Successful completion of the PFS with robust financials and short payback period;
Lean Business
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
copper deposits at Carrapateena.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
• Landmark Partnering Agreement signed with the Kokatha People, the traditional owners of the land where Carrapateena is situated.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
location of the facility.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
of the project is currently underway with a number of milestones achieved in 2016:
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Directors’ Report
• Construction commenced on the Tjati decline; and
Operational and Financial Review
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
copper deposits at Carrapateena.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
commitment to operating discipline. Highlights for Prominent Hill were:
Lean Business
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Simplified operating model with clear accountabilities;
Lean Business
Lean Business
Lean Business
Lean Business
Lean Business
Lean Business
Lean Business
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Successful completion of the PFS with robust financials and short payback period;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
• Simplification of governance structures, reduction and simplification of policies, standards and procedures;
location of the facility.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
commitment to operating discipline. Highlights for Prominent Hill were:
• New Enterprise Resource Planning system; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Operational and Financial Review
companies which provides exploration expertise in specific geologies and locations.
• Construction commenced on the Tjati decline; and
of the project is currently underway with a number of milestones achieved in 2016:
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Directors’ Report
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Simplified operating model with clear accountabilities;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Simplified operating model with clear accountabilities;
• Simplified operating model with clear accountabilities;
• Simplified operating model with clear accountabilities;
• Simplified operating model with clear accountabilities;
• Simplified operating model with clear accountabilities;
• Simplified operating model with clear accountabilities;
• Simplified operating model with clear accountabilities;
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
commitment to operating discipline. Highlights for Prominent Hill were:
location of the facility.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Full technology refresh providing greater agility for employees.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Directors’ Report
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
copper deposits at Carrapateena.
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
• New Enterprise Resource Planning system; and
location of the facility.
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
companies which provides exploration expertise in specific geologies and locations.
of the project is currently underway with a number of milestones achieved in 2016:
Operational and Financial Review
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Directors’ Report
Copper Core
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Full technology refresh providing greater agility for employees.
Australian and Northern Territory borders.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Full technology refresh providing greater agility for employees.
• Full technology refresh providing greater agility for employees.
• Full technology refresh providing greater agility for employees.
• Full technology refresh providing greater agility for employees.
• Full technology refresh providing greater agility for employees.
• Full technology refresh providing greater agility for employees.
• Full technology refresh providing greater agility for employees.
copper deposits at Carrapateena.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Copper production and cost guidance achieved for the year;
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Directors’ Report
• Successful completion of the PFS with robust financials and short payback period;
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
copper deposits at Carrapateena.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Australian and Northern Territory borders.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Operational and Financial Review
commitment to operating discipline. Highlights for Prominent Hill were:
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Copper Core
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
Copper Core
Copper Core
Copper Core
Copper Core
Copper Core
Copper Core
Copper Core
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Construction commenced on the Tjati decline; and
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
copper deposits at Carrapateena.
Australian and Northern Territory borders.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Copper production and cost guidance achieved for the year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Operational and Financial Review
• Copper production and cost guidance achieved for the year;
• Copper production and cost guidance achieved for the year;
• Copper production and cost guidance achieved for the year;
• Copper production and cost guidance achieved for the year;
• Copper production and cost guidance achieved for the year;
• Copper production and cost guidance achieved for the year;
• Copper production and cost guidance achieved for the year;
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
positioned for growth.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Copper guidance achieved for 2016 and for the second consecutive year;
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
commitment to operating discipline. Highlights for Prominent Hill were:
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Australian and Northern Territory borders.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
• Completion of PFS and new Mineral Resource and Ore Reserve statement for Carrapateena;
location of the facility.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
companies which provides exploration expertise in specific geologies and locations.
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
positioned for growth.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
copper deposits at Carrapateena.
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
• Steepening of the open pit walls providing an additional two million tonnes of ore; and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
Customer Focus
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
positioned for growth.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Australian and Northern Territory borders.
• Construction commenced on the Tjati decline; and
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
• Prominent Hill mine life extended to 2028 with a sustained annual production rate of 3.5-4.0 Mtpa1 from the underground mine from 2019.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Operational and Financial Review
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
companies which provides exploration expertise in specific geologies and locations.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
copper deposits at Carrapateena.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Successful completion of the PFS with robust financials and short payback period;
Australian and Northern Territory borders.
• Construction commenced on the Tjati decline; and
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
positioned for growth.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
logistics;
Operational and Financial Review
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
commitment to operating discipline. Highlights for Prominent Hill were:
Customer Focus
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Customer Focus
Customer Focus
Customer Focus
Customer Focus
Customer Focus
Customer Focus
Customer Focus
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
copper deposits at Carrapateena.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
companies which provides exploration expertise in specific geologies and locations.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Construction commenced on the Tjati decline; and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
of the project is currently underway with a number of milestones achieved in 2016:
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
location of the facility.
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
• Customer commitments fulfilled despite operational challenges including a 15 day power outage and extreme weather events affecting mine to port
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Copper guidance achieved for 2016 and for the second consecutive year;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
companies which provides exploration expertise in specific geologies and locations.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Successful completion of the PFS with robust financials and short payback period;
Australian and Northern Territory borders.
of the project is currently underway with a number of milestones achieved in 2016:
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
• Continued creation of customised concentrate parcels for Prominent Hill customers;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
of the project is currently underway with a number of milestones achieved in 2016:
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
commitment to operating discipline. Highlights for Prominent Hill were:
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
Australian and Northern Territory borders.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
companies which provides exploration expertise in specific geologies and locations.
Directors’ Report
Directors’ Report
copper deposits at Carrapateena.
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
of the project is currently underway with a number of milestones achieved in 2016:
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• 100 per cent of 2017 concentrate production pre-committed under long-term contracts; and
• Successful completion of the PFS with robust financials and short payback period;
Australian and Northern Territory borders.
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Construction commenced on the Tjati decline; and
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
location of the facility.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Multiple Assets
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
Operational and Financial Review
Operational and Financial Review
companies which provides exploration expertise in specific geologies and locations.
copper deposits at Carrapateena.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Continued testing and engineering of the concentrate treatment process, designed to produce a high quality premium grade copper concentrate.
• Successful completion of the PFS with robust financials and short payback period;
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
positioned for growth.
• Construction commenced on the Tjati decline; and
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
companies which provides exploration expertise in specific geologies and locations.
copper deposits at Carrapateena.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Construction commenced on the Tjati decline; and
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Australian and Northern Territory borders.
commitment to operating discipline. Highlights for Prominent Hill were:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Multiple Assets
• West Musgrave project Scoping Study underway;
Multiple Assets
Multiple Assets
Multiple Assets
Multiple Assets
Multiple Assets
Multiple Assets
Multiple Assets
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Carrapateena progressed through pre-feasibility stage into feasibility study phase along with commencement of the Tjati decline;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
commitment to operating discipline. Highlights for Prominent Hill were:
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
of the project is currently underway with a number of milestones achieved in 2016:
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
• West Musgrave project Scoping Study underway;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
• Construction commenced on the Tjati decline; and
commitment to operating discipline. Highlights for Prominent Hill were:
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Copper guidance achieved for 2016 and for the second consecutive year;
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
12
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
• Three new exploration earn-in agreements signed in 2016 including West Musgrave, Intercept Hill, and Coompana; and
Australian and Northern Territory borders.
commitment to operating discipline. Highlights for Prominent Hill were:
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Copper guidance achieved for 2016 and for the second consecutive year;
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
12
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Three earn-in agreements signed in 2015 (Mt Woods, Eloise and Yandal One) have progressed, and Jamaica exited.
• Three earn-in agreements signed in 2015 (Mt Woods, Eloise and Yandal One) have progressed, and Jamaica exited.
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
12
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
companies which provides exploration expertise in specific geologies and locations.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Australian and Northern Territory borders.
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
12
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
companies which provides exploration expertise in specific geologies and locations.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Australian and Northern Territory borders.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
12
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
of the project is currently underway with a number of milestones achieved in 2016:
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
1 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
location of the facility.
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
12
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
location of the facility.
Australian and Northern Territory borders.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
12
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
14
companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Australian and Northern Territory borders.
companies which provides exploration expertise in specific geologies and locations.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
logistics;
logistics;
logistics;
logistics;
logistics;
logistics;
logistics;
logistics;
12
14
14
14
14
14
14
14
14
location of the facility.
location of the facility.
location of the facility.
• Construction commenced on the Tjati decline; and
Australian and Northern Territory borders.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Australian and Northern Territory borders.
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
12
12
12
12
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
Australian and Northern Territory borders.
12
12
12
12
12
12
12
12
12
12
12
12
12
12
15
15
33
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Review of operations
Safety performance
Review of operations
The safety, health and wellbeing of OZ Minerals’ employees and contracted partners is a foundational element of OZ Minerals’ strategy. A safe working
environment and a proactive, hazard-aware safety culture is fundamental to OZ Minerals’ operational success. OZ Minerals, in partnership with its contract
Safety performance
partners, is building a shared safety culture between employees and contractors working on OZ Minerals’ sites.
The safety, health and wellbeing of OZ Minerals’ employees and contracted partners is a foundational element of OZ Minerals’ strategy. A safe working
In many areas across the company, the total recordable injury frequency rate (‘TRIFR’) per million hours worked has decreased. Numerous operating
environment and a proactive, hazard-aware safety culture is fundamental to OZ Minerals’ operational success. OZ Minerals, in partnership with its contract
departments, including the entire Carrapateena project, and contract partners ended the year with a TRIFR of zero.
partners, is building a shared safety culture between employees and contractors working on OZ Minerals’ sites.
The TRIFR for the company however increased from 5.30 to 6.71 (from 2015 to 2016 respectively). This increase is primarily attributable to injuries incurred in
In many areas across the company, the total recordable injury frequency rate (‘TRIFR’) per million hours worked has decreased. Numerous operating
the Prominent Hill underground, further exacerbated by the planned reduction in man hours worked over the respective period at Prominent Hill in line with
departments, including the entire Carrapateena project, and contract partners ended the year with a TRIFR of zero.
the open pit demobilisation.
The TRIFR for the company however increased from 5.30 to 6.71 (from 2015 to 2016 respectively). This increase is primarily attributable to injuries incurred in
Prominent Hill has continued the Site Safety Acceleration Program during the year, which outlines three pillars for safety enhancement: leadership intent,
the Prominent Hill underground, further exacerbated by the planned reduction in man hours worked over the respective period at Prominent Hill in line with
hazard and risk awareness and critical risk management.
the open pit demobilisation.
In the Prominent Hill underground, a targeted safety improvement plan combined with an externally led safety behaviours program was implemented mid-way
Prominent Hill has continued the Site Safety Acceleration Program during the year, which outlines three pillars for safety enhancement: leadership intent,
through 2016. This saw a reducing trend in underground high potential incidents and total injuries by the end of the year.
hazard and risk awareness and critical risk management.
Risk management has evolved at Prominent Hill with the establishment of a critical and material risk management system early in 2016. Engagement sessions
In the Prominent Hill underground, a targeted safety improvement plan combined with an externally led safety behaviours program was implemented mid-way
were conducted to identify the site’s critical and material Risks, followed by Bowtie risk analysis. The analysis identified contributing factors that lead to a
through 2016. This saw a reducing trend in underground high potential incidents and total injuries by the end of the year.
critical or material risk event and the controls that are in place. Risk owners for each risk were assigned, and critical controls and control owners identified.
Risk management has evolved at Prominent Hill with the establishment of a critical and material risk management system early in 2016. Engagement sessions
Tools will be developed to enable employees to identify tasks with critical risks and implement the associated critical controls required to manage the risk and
were conducted to identify the site’s critical and material Risks, followed by Bowtie risk analysis. The analysis identified contributing factors that lead to a
work safely. This activity is planned for 2017.
critical or material risk event and the controls that are in place. Risk owners for each risk were assigned, and critical controls and control owners identified.
Other focus areas included Mental Health Awareness, Health and Wellbeing programs and increased emergency response capability. A weekly safety
Tools will be developed to enable employees to identify tasks with critical risks and implement the associated critical controls required to manage the risk and
leadership forum was established to promote communication and shared safety learnings across the asset at Prominent Hill.
work safely. This activity is planned for 2017.
In 2016 the focus remained on creating a proactive safety culture, building the capability of the leadership and engaging employees and contractors in risk
Other focus areas included Mental Health Awareness, Health and Wellbeing programs and increased emergency response capability. A weekly safety
management activities to enable safe cost effective production.
leadership forum was established to promote communication and shared safety learnings across the asset at Prominent Hill.
In 2016 the focus remained on creating a proactive safety culture, building the capability of the leadership and engaging employees and contractors in risk
Prominent Hill
management activities to enable safe cost effective production.
Prominent Hill continued its strong production performance, achieving guidance for the year with copper production of 116,882 tonnes and gold production
of 118,333 ounces. As a result of the 15 day power outage, gold guidance was revised in the third quarter as the company prioritised higher margin copper
Prominent Hill
production. During 2016, Prominent Hill transitioned to a longer term copper and gold production profile following the record copper production in 2015. In
Prominent Hill continued its strong production performance, achieving guidance for the year with copper production of 116,882 tonnes and gold production
the last quarter of 2016, the processing plant returned to a run-rate in excess of 10.5 million tonnes per annum after adjusting for the power outage.
of 118,333 ounces. As a result of the 15 day power outage, gold guidance was revised in the third quarter as the company prioritised higher margin copper
Prominent Hill recorded an increase of 40 per cent in its underground Ore Reserves and an increase of two million tonnes of open pit ore with the steepening
production. During 2016, Prominent Hill transitioned to a longer term copper and gold production profile following the record copper production in 2015. In
of the pit walls. The underground mine life has now been extended to 2028 with a sustained annual production rate from 2019 of 3.5-4.0 million tonnes per
the last quarter of 2016, the processing plant returned to a run-rate in excess of 10.5 million tonnes per annum after adjusting for the power outage.
annum2. The increased production from the underground and ore stockpiles from the open pit enables the processing plant to operate at current levels to mid-
Prominent Hill recorded an increase of 40 per cent in its underground Ore Reserves and an increase of two million tonnes of open pit ore with the steepening
2023 after which the plant is expected to operate in alignment with underground production.
of the pit walls. The underground mine life has now been extended to 2028 with a sustained annual production rate from 2019 of 3.5-4.0 million tonnes per
annum2. The increased production from the underground and ore stockpiles from the open pit enables the processing plant to operate at current levels to mid-
2023 after which the plant is expected to operate in alignment with underground production.
2 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
2 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
16
16
Finance
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Review of operations
Safety performance
Review of operations
Safety performance
The safety, health and wellbeing of OZ Minerals’ employees and contracted partners is a foundational element of OZ Minerals’ strategy. A safe working
environment and a proactive, hazard-aware safety culture is fundamental to OZ Minerals’ operational success. OZ Minerals, in partnership with its contract
partners, is building a shared safety culture between employees and contractors working on OZ Minerals’ sites.
The safety, health and wellbeing of OZ Minerals’ employees and contracted partners is a foundational element of OZ Minerals’ strategy. A safe working
In many areas across the company, the total recordable injury frequency rate (‘TRIFR’) per million hours worked has decreased. Numerous operating
environment and a proactive, hazard-aware safety culture is fundamental to OZ Minerals’ operational success. OZ Minerals, in partnership with its contract
departments, including the entire Carrapateena project, and contract partners ended the year with a TRIFR of zero.
partners, is building a shared safety culture between employees and contractors working on OZ Minerals’ sites.
The TRIFR for the company however increased from 5.30 to 6.71 (from 2015 to 2016 respectively). This increase is primarily attributable to injuries incurred in
In many areas across the company, the total recordable injury frequency rate (‘TRIFR’) per million hours worked has decreased. Numerous operating
the Prominent Hill underground, further exacerbated by the planned reduction in man hours worked over the respective period at Prominent Hill in line with
departments, including the entire Carrapateena project, and contract partners ended the year with a TRIFR of zero.
the open pit demobilisation.
The TRIFR for the company however increased from 5.30 to 6.71 (from 2015 to 2016 respectively). This increase is primarily attributable to injuries incurred in
Prominent Hill has continued the Site Safety Acceleration Program during the year, which outlines three pillars for safety enhancement: leadership intent,
the Prominent Hill underground, further exacerbated by the planned reduction in man hours worked over the respective period at Prominent Hill in line with
hazard and risk awareness and critical risk management.
the open pit demobilisation.
In the Prominent Hill underground, a targeted safety improvement plan combined with an externally led safety behaviours program was implemented mid-way
Prominent Hill has continued the Site Safety Acceleration Program during the year, which outlines three pillars for safety enhancement: leadership intent,
through 2016. This saw a reducing trend in underground high potential incidents and total injuries by the end of the year.
hazard and risk awareness and critical risk management.
Risk management has evolved at Prominent Hill with the establishment of a critical and material risk management system early in 2016. Engagement sessions
In the Prominent Hill underground, a targeted safety improvement plan combined with an externally led safety behaviours program was implemented mid-way
were conducted to identify the site’s critical and material Risks, followed by Bowtie risk analysis. The analysis identified contributing factors that lead to a
through 2016. This saw a reducing trend in underground high potential incidents and total injuries by the end of the year.
critical or material risk event and the controls that are in place. Risk owners for each risk were assigned, and critical controls and control owners identified.
Risk management has evolved at Prominent Hill with the establishment of a critical and material risk management system early in 2016. Engagement sessions
Tools will be developed to enable employees to identify tasks with critical risks and implement the associated critical controls required to manage the risk and
were conducted to identify the site’s critical and material Risks, followed by Bowtie risk analysis. The analysis identified contributing factors that lead to a
work safely. This activity is planned for 2017.
critical or material risk event and the controls that are in place. Risk owners for each risk were assigned, and critical controls and control owners identified.
Other focus areas included Mental Health Awareness, Health and Wellbeing programs and increased emergency response capability. A weekly safety
Tools will be developed to enable employees to identify tasks with critical risks and implement the associated critical controls required to manage the risk and
leadership forum was established to promote communication and shared safety learnings across the asset at Prominent Hill.
work safely. This activity is planned for 2017.
In 2016 the focus remained on creating a proactive safety culture, building the capability of the leadership and engaging employees and contractors in risk
Other focus areas included Mental Health Awareness, Health and Wellbeing programs and increased emergency response capability. A weekly safety
management activities to enable safe cost effective production.
leadership forum was established to promote communication and shared safety learnings across the asset at Prominent Hill.
In 2016 the focus remained on creating a proactive safety culture, building the capability of the leadership and engaging employees and contractors in risk
Prominent Hill
management activities to enable safe cost effective production.
Prominent Hill continued its strong production performance, achieving guidance for the year with copper production of 116,882 tonnes and gold production
Prominent Hill
of 118,333 ounces. As a result of the 15 day power outage, gold guidance was revised in the third quarter as the company prioritised higher margin copper
production. During 2016, Prominent Hill transitioned to a longer term copper and gold production profile following the record copper production in 2015. In
Prominent Hill continued its strong production performance, achieving guidance for the year with copper production of 116,882 tonnes and gold production
the last quarter of 2016, the processing plant returned to a run-rate in excess of 10.5 million tonnes per annum after adjusting for the power outage.
of 118,333 ounces. As a result of the 15 day power outage, gold guidance was revised in the third quarter as the company prioritised higher margin copper
Prominent Hill recorded an increase of 40 per cent in its underground Ore Reserves and an increase of two million tonnes of open pit ore with the steepening
production. During 2016, Prominent Hill transitioned to a longer term copper and gold production profile following the record copper production in 2015. In
of the pit walls. The underground mine life has now been extended to 2028 with a sustained annual production rate from 2019 of 3.5-4.0 million tonnes per
the last quarter of 2016, the processing plant returned to a run-rate in excess of 10.5 million tonnes per annum after adjusting for the power outage.
annum2. The increased production from the underground and ore stockpiles from the open pit enables the processing plant to operate at current levels to mid-
Prominent Hill recorded an increase of 40 per cent in its underground Ore Reserves and an increase of two million tonnes of open pit ore with the steepening
2023 after which the plant is expected to operate in alignment with underground production.
of the pit walls. The underground mine life has now been extended to 2028 with a sustained annual production rate from 2019 of 3.5-4.0 million tonnes per
annum2. The increased production from the underground and ore stockpiles from the open pit enables the processing plant to operate at current levels to mid-
2023 after which the plant is expected to operate in alignment with underground production.
2 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
2 This information is extracted from the report entitled ‘Prominent Hill mine life extended to 2028’ released to the ASX on 15 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
16
16
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Prominent Hill C1 cost of US 74.1 cents per pound of copper (including by-product credits relating to gold and silver produced) was within the first quartile for
Prominent Hill C1 cost of US 74.1 cents per pound of copper (including by-product credits relating to gold and silver produced) was within the first quartile for
all copper producers worldwide (Wood Mackenzie data from Q4 2016). The strong cost performance was the result of continuing cost focus, capital discipline,
all copper producers worldwide (Wood Mackenzie data from Q4 2016). The strong cost performance was the result of continuing cost focus, capital discipline,
the successful procurement savings program, and innovative efficiency improvements.
the successful procurement savings program, and innovative efficiency improvements.
Cash Cost (C1)
Cash Cost (C1)
Cash Cost (C1)
(c/lb)
(c/lb)
(c/lb)
400.0
400.0
400.0
350.0
350.0
350.0
300.0
300.0
300.0
250.0
250.0
250.0
200.0
200.0
200.0
150.0
100.0
150.0
150.0
Prominent Hill 2016
Prominent Hill 2016
C1 costs (US cents) -
C1 costs (US cents) -
Prominent Hill 2016
100.0
100.0
74.1
74.1
C1 costs (US cents) -
Directors’ Report
74.1
50.0
50.0
Directors’ Report
Directors’ Report
Directors’ Report
0.0
0.0
50.0
0.0
Cumulative percentile paid metal
Cumulative percentile paid metal
Cumulative percentile paid metal (M lbs)
The open pit continued its efficient operation with a number of improvements driving accelerated demobilisation of equipment in early 2016 as waste removal
The open pit continued its efficient operation with a number of improvements driving accelerated demobilisation of equipment in early 2016 as waste removal
activity reduced significantly. Ore produced from the open pit of 15.1 million tonnes was 23 per cent higher than 2015 as the strip ratio decreased to 1:1
activity reduced significantly. Ore produced from the open pit of 15.1 million tonnes was 23 per cent higher than 2015 as the strip ratio decreased to 1:1
compared to 3.1:1 in 2015. During the last quarter of 2016, implementation of the single lane ramp design began which will enable access to an additional
compared to 3.1:1 in 2015. During the last quarter of 2016, implementation of the single lane ramp design began which will enable access to an additional
two million tonnes of ore from the open pit. The next open pit fleet demobilisation is expected in the second quarter of 2017 and will result in the reduction
two million tonnes of ore from the open pit. The next open pit fleet demobilisation is expected in the second quarter of 2017 and will result in the reduction
of a further five open pit trucks to a final fleet of 12 trucks and utilising a smaller primary excavator.
of a further five open pit trucks to a final fleet of 12 trucks and utilising a smaller primary excavator.
Operational and Financial Review
Life of mine dewatering infrastructure installed during the year was successful in mitigating the impacts of high volume rainfall in late December 2016.
Life of mine dewatering infrastructure installed during the year was successful in mitigating the impacts of high volume rainfall in late December 2016.
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
The underground mine delivered 2.1 million tonnes of ore, which was 11 per cent higher than prior year assisted by a temporary decline providing additional
The underground mine delivered 2.1 million tonnes of ore, which was 11 per cent higher than prior year assisted by a temporary decline providing additional
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
haulage capacity in the fourth quarter. The development of the second underground decline progressed well with completion expected in third quarter of
haulage capacity in the fourth quarter. The development of the second underground decline progressed well with completion expected in third quarter of
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
2017.
2017.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
A combination of ongoing drilling programs, mine planning initiatives and reduction in cut-off grades led to the increase in the underground Ore Reserves of
A combination of ongoing drilling programs, mine planning initiatives and reduction in cut-off grades led to the increase in the underground Ore Reserves of
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
more than 40 per cent.
more than 40 per cent.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Carrapateena
Carrapateena
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
A number of successes were achieved at the Carrapateena Project throughout the year including:
A number of successes were achieved at the Carrapateena Project throughout the year including:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Completion of the scoping study and PFS;
• Completion of the scoping study and PFS;
• Copper guidance achieved for 2016 and for the second consecutive year;
commitment to operating discipline. Highlights for Prominent Hill were:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Announcement of an Ore Reserve estimate and updated Mineral Resource estimate;
• Announcement of an Ore Reserve estimate and updated Mineral Resource estimate;
commitment to operating discipline. Highlights for Prominent Hill were:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Signing of a landmark partnering agreement with the Native Title Owners, the Kokatha Aboriginal Corporation; and
• Signing of a landmark partnering agreement with the Native Title Owners, the Kokatha Aboriginal Corporation; and
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Commencement of the Tjati decline.
• Commencement of the Tjati decline.
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
17
17
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
Australian and Northern Territory borders.
35
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12
12
12
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
year mine life3.
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
year mine life3.
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
year mine life3.
year mine life3.
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
Measured classification4 and forms the basis for the Feasibility Study.
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
Measured classification4 and forms the basis for the Feasibility Study.
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
Measured classification4 and forms the basis for the Feasibility Study.
Measured classification4 and forms the basis for the Feasibility Study.
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
savings and will be attractive feed and blend stock for smelters.
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
savings and will be attractive feed and blend stock for smelters.
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
Kokatha Aboriginal Corporation was signed in the fourth quarter.
savings and will be attractive feed and blend stock for smelters.
savings and will be attractive feed and blend stock for smelters.
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
Directors’ Report
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
Kokatha Aboriginal Corporation was signed in the fourth quarter.
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
Directors’ Report
Kokatha Aboriginal Corporation was signed in the fourth quarter.
Kokatha Aboriginal Corporation was signed in the fourth quarter.
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
West Musgrave
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
Directors’ Report
West Musgrave
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
West Musgrave
West Musgrave
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
Directors’ Report
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
Nebo Babel deposits.
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
Nebo Babel deposits.
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
Operational and Financial Review
Nebo Babel deposits.
Nebo Babel deposits.
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
million on regional exploration to earn another 19 per cent.
Operational and Financial Review
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
million on regional exploration to earn another 19 per cent.
Exploration and growth
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operational and Financial Review
positioned for growth.
million on regional exploration to earn another 19 per cent.
million on regional exploration to earn another 19 per cent.
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Exploration and growth
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Exploration and growth
Exploration and growth
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
Operational and Financial Review
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
copper deposits at Carrapateena.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
the ground activities. The six projects underway are as follows:
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
positioned for growth.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
• West Musgrave, as above.
copper deposits at Carrapateena.
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
the ground activities. The six projects underway are as follows:
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• West Musgrave, as above.
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
copper deposits at Carrapateena.
the ground activities. The six projects underway are as follows:
the ground activities. The six projects underway are as follows:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• West Musgrave, as above.
• West Musgrave, as above.
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
commitment to operating discipline. Highlights for Prominent Hill were:
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Copper guidance achieved for 2016 and for the second consecutive year;
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
commitment to operating discipline. Highlights for Prominent Hill were:
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
• Copper guidance achieved for 2016 and for the second consecutive year;
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
commitment to operating discipline. Highlights for Prominent Hill were:
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
• Copper guidance achieved for 2016 and for the second consecutive year;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
of the project is currently underway with a number of milestones achieved in 2016:
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Successful completion of the PFS with robust financials and short payback period;
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
are presented have not been materially modified from the original announcement.
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
• Construction commenced on the Tjati decline; and
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
location of the facility.
are presented have not been materially modified from the original announcement.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
• Construction commenced on the Tjati decline; and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
are presented have not been materially modified from the original announcement.
are presented have not been materially modified from the original announcement.
location of the facility.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
location of the facility.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
18
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
2017.
completed by the SA DSD and PACE initiative.
2017.
completed by the SA DSD and PACE initiative.
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
completed by the SA DSD and PACE initiative.
completed by the SA DSD and PACE initiative.
2017.
2017.
18
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
18
18
Australian and Northern Territory borders.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
12
12
12
12
Finance
Directors’ Report
Operational and Financial Review
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
year mine life3.
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
The PFS confirmed a robust project with an NPV of $770 million at an IRR of approximately 20 per cent with a payback period of four years. The PFS proposes
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
a 4Mtpa sub level cave mining operation with an estimated average annual production of 61,000 tonnes of copper and 63,000 ounces of gold over a 20-plus
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
year mine life3.
year mine life3.
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
Following approval from the OZ Minerals Board, the project has progressed to Feasibility Study stage and construction of the Tjati decline commenced in
Measured classification4 and forms the basis for the Feasibility Study.
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
August 2016 with development now beyond 850 metres. Confidence in the Carrapateena resource further increased with the release of an updated Mineral
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
Resource estimate of 134 million tonnes at 1.5% Cu, 0.6 g/t Au and 6.5g/t Ag. The Mineral Resource estimate upgraded 46 per cent of the resource to
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
Measured classification4 and forms the basis for the Feasibility Study.
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
Measured classification4 and forms the basis for the Feasibility Study.
savings and will be attractive feed and blend stock for smelters.
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
The Concentrate Treatment Plant (CTP) is undergoing a parallel but separate study process. Feasibility level engineering of the CTP continued and has now
savings and will be attractive feed and blend stock for smelters.
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
progressed to the cost estimate phase and site options are being assessed. The CTP uses an innovative process to create a high quality premium copper
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
concentrate of approximately 50-60 per cent copper grade while reducing impurities. This concentrate will incur lower commercial costs, provide freight
Kokatha Aboriginal Corporation was signed in the fourth quarter.
savings and will be attractive feed and blend stock for smelters.
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
Kokatha Aboriginal Corporation was signed in the fourth quarter.
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
Approval submissions to the State and Federal Governments are progressing well and a landmark partnering agreement with the traditional owners, the
Kokatha Aboriginal Corporation was signed in the fourth quarter.
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
West Musgrave
West Musgrave
Tender packages for the Engineering, Procurement and Construction of the minerals processing plant were also issued during the fourth quarter of 2016.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
West Musgrave
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements. OZ Minerals has committed an initial $3 million
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
to determine an optimised pathway to commercialisation with a focus on operational scale and improvement in metallurgical recovery. A scoping study is
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
currently underway and is targeting the Nebo-Babel copper-nickel and Succoth copper deposits located in the Musgrave Province of Western Australia.
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
Exploration drilling was undertaken at the Babylon prospect, which forms part of the Succoth deposit, and One Tree Hill prospect. The exploration drill hole at
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
Nebo Babel deposits.
One Tree Hill intersected a significant sulphide zone with assays confirming the discovery of magmatic Cu-PGE-Ni style mineralisation, similar to Succoth and
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
Nebo Babel deposits.
Nebo Babel deposits.
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
million on regional exploration to earn another 19 per cent.
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
Following the completion of the scoping study, OZ Minerals has the option to earn up to 70 per cent of the project. If OZ Minerals elects to proceed, it will be
million on regional exploration to earn another 19 per cent.
Exploration and growth
committing $15 million towards a PFS and $4 million in further regional exploration in 18 months for 51 per cent, and another $10 million on FS and $4
million on regional exploration to earn another 19 per cent.
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
Exploration and growth
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
Exploration and growth
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
OZ Minerals continued to grow its pipeline of opportunities with the addition of three new earn-in agreements with highly regarded explorers at West
the ground activities. The six projects underway are as follows:
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
Musgrave, Intercept Hill and Coompana. These agreements provide OZ Minerals with exploration expertise in specific geologies and locations. The earn-in
• West Musgrave, as above.
partners in turn access capital to undertake drilling programs. OZ Minerals typically works with its earn-in partners to oversee projects while they manage on
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
• West Musgrave, as above.
the ground activities. The six projects underway are as follows:
the ground activities. The six projects underway are as follows:
2017.
• West Musgrave, as above.
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
• Intercept Hill with Red Tiger Resources targeting the wider Carrapateena province and drilling IOCG mineralisation. Targets will be drill tested in early
completed by the SA DSD and PACE initiative.
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
• Coompana with Mithril Resources targeting seven exploration licenses in South Australia’s far western Coompana province leveraging the work
completed by the SA DSD and PACE initiative.
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
completed by the SA DSD and PACE initiative.
2017.
2017.
• Eloise with Minotaur Exploration drilling multiple prospects in the Eastern Succession of the Mt Isa block in Queensland.
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
3 This information is extracted from the report entitled ‘Confidence in Carrapateena project grows’ released to the ASX on 7 November 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals confirms
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
that all material assumptions underpinning the production target in that report continue to apply and have not materially changed.
are presented have not been materially modified from the original announcement.
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
4 Details of this mineral resource estimate were previously reported in the announcement entitled ‘Carrapateena Mineral Resource estimate robustness confirmed’ released to the ASX on 9 December 2016 and is available at
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
http://www.ozminerals.com/media/asx/. OZ Minerals confirms that it is not aware of any new information included in the original announcement and, in the case of mineral resources, that all material assumptions and
are presented have not been materially modified from the original announcement.
technical parameters underpinning the estimates in the original announcement continue to apply and have not materially changed. OZ Minerals confirms that the form and content in which the Competent Person’s findings
are presented have not been materially modified from the original announcement.
18
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18
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Directors’ Report
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Operational and Financial Review
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Yandal One with Toro Energy targeting nickel sulphide mineralisation in Western Australia. Drilling commenced in 2016.
• Yandal One with Toro Energy targeting nickel sulphide mineralisation in Western Australia. Drilling commenced in 2016.
• Yandal One with Toro Energy targeting nickel sulphide mineralisation in Western Australia. Drilling commenced in 2016.
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Copper guidance achieved for 2016 and for the second consecutive year;
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Mt Woods with Minotaur Exploration exploring brownfield copper gold resources around Prominent Hill. Drilling commenced in 2016.
• Mt Woods with Minotaur Exploration exploring brownfield copper gold resources around Prominent Hill. Drilling commenced in 2016.
• Mt Woods with Minotaur Exploration exploring brownfield copper gold resources around Prominent Hill. Drilling commenced in 2016.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
In line with OZ Minerals’ commitment to capital discipline, after a comprehensive review of the exploration results, OZ Minerals withdrew from the Jamaican
In line with OZ Minerals’ commitment to capital discipline, after a comprehensive review of the exploration results, OZ Minerals withdrew from the Jamaican
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
In line with OZ Minerals’ commitment to capital discipline, after a comprehensive review of the exploration results, OZ Minerals withdrew from the Jamaican
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
exploration joint ventures at Bellas Gate and Rodinia and entered into a heads of agreement to transfer all exploration interests in Jamaica to Carube Copper
exploration joint ventures at Bellas Gate and Rodinia and entered into a heads of agreement to transfer all exploration interests in Jamaica to Carube Copper
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
exploration joint ventures at Bellas Gate and Rodinia and entered into a heads of agreement to transfer all exploration interests in Jamaica to Carube Copper
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Corporation.
Corporation.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Corporation.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the project is currently underway with a number of milestones achieved in 2016:
commitment to operating discipline. Highlights for Prominent Hill were:
Review of Financial Results
Review of Financial Results
Review of Financial Results
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Net profit after tax of $107.8 million;
• Net profit after tax of $107.8 million;
• Net profit after tax of $107.8 million;
of the project is currently underway with a number of milestones achieved in 2016:
commitment to operating discipline. Highlights for Prominent Hill were:
• Successful completion of the PFS with robust financials and short payback period;
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Underlying EBITDA of $373.8 million, and EBITDA margin of 45 per cent;
• Underlying EBITDA of $373.8 million, and EBITDA margin of 45 per cent;
• Underlying EBITDA of $373.8 million, and EBITDA margin of 45 per cent;
commitment to operating discipline. Highlights for Prominent Hill were:
• Successful completion of the PFS with robust financials and short payback period;
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Construction commenced on the Tjati decline; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Total revenue of $822.9 million;
• Total revenue of $822.9 million;
• Total revenue of $822.9 million;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Construction commenced on the Tjati decline; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Cost of goods sold of $380.3 million;
• Cost of goods sold of $380.3 million;
• Cost of goods sold of $380.3 million;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Shareholder payments of $90.5 million; and
• Shareholder payments of $90.5 million; and
• Shareholder payments of $90.5 million; and
commitment to operating discipline. Highlights for Prominent Hill were:
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
location of the facility.
• Net assets of $2,354.3 million, with cash of $655.7 million and no debt.
• Net assets of $2,354.3 million, with cash of $655.7 million and no debt.
• Net assets of $2,354.3 million, with cash of $655.7 million and no debt.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
companies which provides exploration expertise in specific geologies and locations.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
companies which provides exploration expertise in specific geologies and locations.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
of the project is currently underway with a number of milestones achieved in 2016:
Australian and Northern Territory borders.
• Successful completion of the PFS with robust financials and short payback period;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Construction commenced on the Tjati decline; and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
Australian and Northern Territory borders.
• Successful completion of the PFS with robust financials and short payback period;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
Australian and Northern Territory borders.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
12
12
12
12
12
12
19
19
19
12
12
37
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Review of consolidated financial results and operations5
Review of consolidated financial results and operations5
OZ Minerals maintained its strong financial performance in 2016 while executing its growth strategy. The impact of lower copper and gold production from
Review of consolidated financial results and operations5
OZ Minerals maintained its strong financial performance in 2016 while executing its growth strategy. The impact of lower copper and gold production from
the Prominent Hill operation was largely offset by the successful cost reduction program contributing to a strong underlying NPAT of $134.3 million for the
the Prominent Hill operation was largely offset by the successful cost reduction program contributing to a strong underlying NPAT of $134.3 million for the
year (2015: $139.6 million when pre-commissioning Malu underground costs and revenue were capitalised). The production and financial results for 2016
OZ Minerals maintained its strong financial performance in 2016 while executing its growth strategy. The impact of lower copper and gold production from
year (2015: $139.6 million when pre-commissioning Malu underground costs and revenue were capitalised). The production and financial results for 2016
were impacted by the 15 day power outage. The cash balance of $655.7 million increased by $103.2 million compared to the prior year after shareholder
the Prominent Hill operation was largely offset by the successful cost reduction program contributing to a strong underlying NPAT of $134.3 million for the
were impacted by the 15 day power outage. The cash balance of $655.7 million increased by $103.2 million compared to the prior year after shareholder
payments of $90.5 million, investment in the Carrapateena project of $38.5 million, Prominent Hill ore inventory, exploration and corporate development
year (2015: $139.6 million when pre-commissioning Malu underground costs and revenue were capitalised). The production and financial results for 2016
payments of $90.5 million, investment in the Carrapateena project of $38.5 million, Prominent Hill ore inventory, exploration and corporate development
activities.
were impacted by the 15 day power outage. The cash balance of $655.7 million increased by $103.2 million compared to the prior year after shareholder
activities.
payments of $90.5 million, investment in the Carrapateena project of $38.5 million, Prominent Hill ore inventory, exploration and corporate development
During the year, non-underlying items included the expenditure of $37.9 million (pre-tax) relating to the Class action which was settled during the year
During the year, non-underlying items included the expenditure of $37.9 million (pre-tax) relating to the Class action which was settled during the year
activities.
resulting in the NPAT attributable to shareholders of $107.8 million (2015: 130.2 million).
resulting in the NPAT attributable to shareholders of $107.8 million (2015: 130.2 million).
During the year, non-underlying items included the expenditure of $37.9 million (pre-tax) relating to the Class action which was settled during the year
resulting in the NPAT attributable to shareholders of $107.8 million (2015: 130.2 million).
Carrapateena
Carrapateena
Corporate
Corporate
Total
Total
Total
Total
Prominent
Prominent
Hill
Hill
2016
2016
Prominent
$m
$m
Hill
Revenue – Copper
2016
725.1
Revenue – Copper
725.1
$m
Revenue – Gold and Silver
197.0
Revenue – Gold and Silver
197.0
Revenue – Copper
725.1
Treatment and refining charges
(99.2)
Treatment and refining charges
(99.2)
Revenue – Gold and Silver
197.0
Net Revenue
822.9
Net Revenue
822.9
Treatment and refining charges
(99.2)
Mining
(296.2)
Mining
(296.2)
Net Revenue
822.9
Processing
(91.3)
Processing
(91.3)
Mining
(296.2)
Transport
(52.9)
Transport
(52.9)
Processing
(91.3)
Site general and administration
(19.7)
Site general and administration
(19.7)
Transport
(52.9)
Royalties
(42.2)
Royalties
(42.2)
Site general and administration
(19.7)
Deferred waste adjustment
36.6
Deferred waste adjustment
36.6
Royalties
(42.2)
Inventory adjustment
85.4
Inventory adjustment
85.4
Deferred waste adjustment
36.6
Cost of goods sold
(380.3)
Cost of goods sold
(380.3)
Inventory adjustment
85.4
Corporate general and administration
(10.5)
Corporate general and administration
(10.5)
Cost of goods sold
(380.3)
Exploration and other income/(expense)
0.7
Exploration and other income/(expense)
0.7
Corporate general and administration
(10.5)
Restructuring costs
–
Restructuring costs
–
Exploration and other income/(expense)
0.7
Net Realisable Value adjustments
(10.5)
Net Realisable Value adjustments
(10.5)
Restructuring costs
–
Foreign exchange gain/(loss)
(4.1)
Foreign exchange gain/(loss)
(4.1)
Net Realisable Value adjustments
(10.5)
Underlying EBITDA
418.2
Underlying EBITDA
418.2
Foreign exchange gain/(loss)
(4.1)
Depreciation of PPE
(356.5)
Depreciation of PPE
(356.5)
Directors’ Report
Underlying EBITDA
418.2
Capitalised depreciation into inventory
152.8
Capitalised depreciation into inventory
152.8
Operational and Financial Review
Depreciation of PPE
(356.5)
Net Depreciation
(203.7)
Net Depreciation
(203.7)
Capitalised depreciation into inventory
152.8
Underlying EBIT
214.5
Underlying EBIT
214.5
Net Depreciation
(203.7)
Net finance income/expense
Net finance income/expense
Underlying EBIT
Income tax (expense)/benefit
Income tax (expense)/benefit
Net finance income/expense
Underlying NPAT
Underlying NPAT
Income tax (expense)/benefit
Non underlying items net of tax
Non underlying items net of tax
Underlying NPAT
NPAT
Non underlying items net of tax
Basic and diluted earnings per share (cents per share)
214.5
2016
2016
Carrapateena
$m
$m
2016
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(12.9)
(12.9)
–
–
–
(12.9)
–
–
–
–
–
–
(12.9)
(12.9)
–
(3.1)
(3.1)
(12.9)
–
–
(3.1)
(3.1)
(3.1)
–
(16.0)
(16.0)
(3.1)
(16.0)
Exploration &
Exploration &
Development
Development
2016
2016
Exploration &
$m
$m
Development
2016
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.5)
(0.5)
–
(16.4)
(16.4)
(0.5)
–
–
(16.4)
–
–
–
–
–
–
(16.9)
(16.9)
–
–
–
(16.9)
–
–
–
–
–
–
(16.9)
(16.9)
–
(16.9)
2016
2016
Corporate
$m
$m
2016
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(25.7)
(25.7)
–
4.3
4.3
(25.7)
–
–
4.3
–
–
–
6.8
6.8
–
(14.6)
(14.6)
6.8
(1.9)
(1.9)
(14.6)
–
–
(1.9)
(1.9)
(1.9)
–
(16.5)
(16.5)
(1.9)
(16.5)
2016
2016
Total
$m
$m
2016
725.1
725.1
$m
197.0
197.0
725.1
(99.2)
(99.2)
197.0
822.9
822.9
(99.2)
(296.2)
(296.2)
822.9
(91.3)
(91.3)
(296.2)
(52.9)
(52.9)
(91.3)
(19.7)
(19.7)
(52.9)
(42.2)
(42.2)
(19.7)
36.6
36.6
(42.2)
85.4
85.4
36.6
(380.3)
(380.3)
85.4
(36.7)
(36.7)
(380.3)
(24.3)
(24.3)
(36.7)
–
–
(24.3)
(10.5)
(10.5)
–
2.7
2.7
(10.5)
373.8
373.8
2.7
(361.5)
(361.5)
373.8
152.8
152.8
(361.5)
(208.7)
(208.7)
152.8
165.1
165.1
(208.7)
9.0
9.0
165.1
(39.8)
(39.8)
9.0
134.3
134.3
(39.8)
(26.5)
(26.5)
134.3
107.8
(26.5)
35.7
2015
2015
Total
$m
$m
2015
794.5
794.5
$m
182.0
182.0
794.5
(97.1)
(97.1)
182.0
879.4
879.4
(97.1)
(351.7)
(351.7)
879.4
(87.0)
(87.0)
(351.7)
(54.1)
(54.1)
(87.0)
(23.3)
(23.3)
(54.1)
(47.9)
(47.9)
(23.3)
148.1
148.1
(47.9)
34.2
34.2
148.1
(381.7)
(381.7)
34.2
(43.0)
(43.0)
(381.7)
(41.0)
(41.0)
(43.0)
(7.6)
(7.6)
(41.0)
(4.4)
(4.4)
(7.6)
33.2
33.2
(4.4)
434.9
434.9
33.2
(285.1)
(285.1)
434.9
50.0
50.0
(285.1)
(235.1)
(235.1)
50.0
199.8
199.8
(235.1)
2.9
2.9
199.8
(63.1)
(63.1)
2.9
139.6
139.6
(63.1)
(9.4)
(9.4)
139.6
130.2
(9.4)
42.9
5. OZ Minerals financial results are reported under International Financial Reporting Standards (‘IFRS’). This Annual Report and Results for Announcement to the Market include certain non-IFRS measures including Underlying
5. OZ Minerals financial results are reported under International Financial Reporting Standards (‘IFRS’). This Annual Report and Results for Announcement to the Market include certain non-IFRS measures including Underlying
EBITDA, Underlying EBIT and Underlying NPAT. These measures are presented to enable understanding of the underlying performance of the Consolidated Entity without the impact of non-trading items such as adjustments
EBITDA, Underlying EBIT and Underlying NPAT. These measures are presented to enable understanding of the underlying performance of the Consolidated Entity without the impact of non-trading items such as adjustments
to discontinued operations. Non-IFRS measures have not been subject to audit. Underlying EBITDA, Underlying EBIT and Underlying NPAT are included in Note 1 Operating Segments, which form part of the Consolidated
to discontinued operations. Non-IFRS measures have not been subject to audit. Underlying EBITDA, Underlying EBIT and Underlying NPAT are included in Note 1 Operating Segments, which form part of the Consolidated
5. OZ Minerals financial results are reported under International Financial Reporting Standards (‘IFRS’). This Annual Report and Results for Announcement to the Market include certain non-IFRS measures including Underlying
Financial Statements. Refer Note 1 Operating Segments to the Consolidated Financial Statements for further details.
Financial Statements. Refer Note 1 Operating Segments to the Consolidated Financial Statements for further details.
EBITDA, Underlying EBIT and Underlying NPAT. These measures are presented to enable understanding of the underlying performance of the Consolidated Entity without the impact of non-trading items such as adjustments
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
$m
to discontinued operations. Non-IFRS measures have not been subject to audit. Underlying EBITDA, Underlying EBIT and Underlying NPAT are included in Note 1 Operating Segments, which form part of the Consolidated
$m
(108.2)
(11.1)
1.0
(17.1)
15.5
2.2
63.0
(2.1)
5.7
56.0
(60.3)
20.3
6.3
16.7
(30.5)
7.6
0.3
139.6
(118.3)
0.6
66.6
16.0
0.4
29.4
134.3
Financial Statements. Refer Note 1 Operating Segments to the Consolidated Financial Statements for further details.
Underlying net profit after tax for the year ended 31 December 2015
Changes in revenues:
Volume – sales
A$ price
Copper
Gold
Silver
Copper
Gold
Silver
Depreciation
Other costs:
Corporate
Exploration
Restructuring Expenses
Other
Tax and net interest
Revenue
Adjustment for 2015 Malu underground pre-production ore
Treatment and refining charges
Royalties
Changes in mine costs:
Production costs
Deferred waste and inventory adjustment
Foreign exchange gain on cash and debtor balances
Underlying net profit for the year ended 31 December 2016
20
20
20
21
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
were impacted by the 15 day power outage.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
approach reduces the volatility from contractual quotation period terms.
Finance
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
(118.3)
107.8
107.8
107.8
107.8
107.8
107.8
35.7
35.7
107.8
35.7
35.7
107.8
35.7
107.8
35.7
107.8
107.8
35.7
35.7
35.7
35.7
35.7
A$ price
A$ price
A$ price
A$ price
A$ price
A$ price
A$ price
A$ price
A$ price
A$ price
A$ price
NPAT
130.2
NPAT
130.2
NPAT
130.2
NPAT
130.2
NPAT
130.2
NPAT
130.2
Basic and diluted earnings per share (cents per share)
42.9
Basic and diluted earnings per share (cents per share)
42.9
NPAT
130.2
Basic and diluted earnings per share (cents per share)
42.9
Basic and diluted earnings per share (cents per share)
42.9
NPAT
130.2
Basic and diluted earnings per share (cents per share)
42.9
NPAT
130.2
Basic and diluted earnings per share (cents per share)
42.9
NPAT
130.2
NPAT
130.2
Basic and diluted earnings per share (cents per share)
42.9
Basic and diluted earnings per share (cents per share)
42.9
Basic and diluted earnings per share (cents per share)
42.9
Basic and diluted earnings per share (cents per share)
42.9
Basic and diluted earnings per share (cents per share)
42.9
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
$m
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
$m
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
$m
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
$m
$m
$m
Underlying net profit after tax for the year ended 31 December 2015
139.6
Underlying net profit after tax for the year ended 31 December 2015
$m
139.6
Underlying net profit after tax for the year ended 31 December 2015
139.6
Underlying net profit after tax for the year ended 31 December 2015
$m
139.6
Underlying net profit after tax for the year ended 31 December 2015
139.6
$m
Underlying net profit after tax for the year ended 31 December 2015
$m
139.6
$m
Changes in revenues:
Underlying net profit after tax for the year ended 31 December 2015
139.6
Changes in revenues:
Changes in revenues:
Underlying net profit after tax for the year ended 31 December 2015
139.6
Changes in revenues:
Changes in revenues:
Underlying net profit after tax for the year ended 31 December 2015
139.6
Underlying net profit after tax for the year ended 31 December 2015
139.6
Changes in revenues:
Underlying net profit after tax for the year ended 31 December 2015
139.6
Volume – sales
Changes in revenues:
Volume – sales
Volume – sales
Changes in revenues:
Volume – sales
Changes in revenues:
Volume – sales
Changes in revenues:
Volume – sales
Changes in revenues:
Copper
Volume – sales
Copper
Copper
Volume – sales
Copper
Volume – sales
Copper
Volume – sales
Copper
Volume – sales
Gold
Copper
Gold
Gold
Copper
Gold
Gold
Copper
Copper
Gold
Copper
Silver
Gold
Silver
Silver
Gold
Silver
Silver
Gold
Gold
Silver
Gold
Silver
Silver
Silver
Silver
Silver
Copper
Copper
Copper
Copper
Copper
Copper
Gold
Copper
Gold
Gold
Copper
Gold
Gold
Copper
Copper
Gold
Copper
Silver
Gold
Silver
Silver
Gold
Silver
Silver
Gold
Gold
Silver
Gold
Silver
Silver
Silver
Silver
Silver
Adjustment for 2015 Malu underground pre-production ore
Adjustment for 2015 Malu underground pre-production ore
Adjustment for 2015 Malu underground pre-production ore
Adjustment for 2015 Malu underground pre-production ore
Adjustment for 2015 Malu underground pre-production ore
Adjustment for 2015 Malu underground pre-production ore
Treatment and refining charges
Adjustment for 2015 Malu underground pre-production ore
Treatment and refining charges
Treatment and refining charges
Adjustment for 2015 Malu underground pre-production ore
Treatment and refining charges
Treatment and refining charges
Adjustment for 2015 Malu underground pre-production ore
Adjustment for 2015 Malu underground pre-production ore
Treatment and refining charges
Adjustment for 2015 Malu underground pre-production ore
Royalties
Treatment and refining charges
Royalties
Royalties
Treatment and refining charges
Royalties
Royalties
Treatment and refining charges
Treatment and refining charges
Royalties
Treatment and refining charges
Changes in mine costs:
Royalties
Changes in mine costs:
Changes in mine costs:
Royalties
Changes in mine costs:
Royalties
Changes in mine costs:
Royalties
Changes in mine costs:
Royalties
Production costs
Changes in mine costs:
Production costs
Production costs
Changes in mine costs:
Production costs
Changes in mine costs:
Production costs
Changes in mine costs:
Production costs
Changes in mine costs:
Deferred waste and inventory adjustment
Production costs
Deferred waste and inventory adjustment
Deferred waste and inventory adjustment
Production costs
Deferred waste and inventory adjustment
Deferred waste and inventory adjustment
Production costs
Production costs
Deferred waste and inventory adjustment
Production costs
Depreciation
Deferred waste and inventory adjustment
Depreciation
Depreciation
Deferred waste and inventory adjustment
Depreciation
Depreciation
Deferred waste and inventory adjustment
Deferred waste and inventory adjustment
Depreciation
Deferred waste and inventory adjustment
Other costs:
Depreciation
Other costs:
Other costs:
Depreciation
Other costs:
Depreciation
Other costs:
Depreciation
Other costs:
Depreciation
Corporate
Other costs:
Corporate
Corporate
Other costs:
Corporate
Other costs:
Corporate
Other costs:
Corporate
Other costs:
Exploration
Corporate
Exploration
Exploration
Corporate
Exploration
Exploration
Corporate
Corporate
Exploration
Corporate
Foreign exchange gain on cash and debtor balances
Exploration
Foreign exchange gain on cash and debtor balances
Foreign exchange gain on cash and debtor balances
Exploration
Foreign exchange gain on cash and debtor balances
Foreign exchange gain on cash and debtor balances
Exploration
Exploration
Foreign exchange gain on cash and debtor balances
Exploration
Restructuring Expenses
Foreign exchange gain on cash and debtor balances
Restructuring Expenses
Restructuring Expenses
Foreign exchange gain on cash and debtor balances
Restructuring Expenses
Restructuring Expenses
Foreign exchange gain on cash and debtor balances
Foreign exchange gain on cash and debtor balances
Restructuring Expenses
Foreign exchange gain on cash and debtor balances
Other
Restructuring Expenses
Other
Other
Restructuring Expenses
Other
Other
Restructuring Expenses
Restructuring Expenses
Other
Restructuring Expenses
Tax and net interest
Other
Tax and net interest
Tax and net interest
Other
Tax and net interest
Other
Tax and net interest
Other
Tax and net interest
Other
Underlying net profit for the year ended 31 December 2016
Tax and net interest
Underlying net profit for the year ended 31 December 2016
Underlying net profit for the year ended 31 December 2016
Tax and net interest
Underlying net profit for the year ended 31 December 2016
Tax and net interest
Underlying net profit for the year ended 31 December 2016
Tax and net interest
Underlying net profit for the year ended 31 December 2016
Tax and net interest
Underlying net profit for the year ended 31 December 2016
Revenue
Underlying net profit for the year ended 31 December 2016
Underlying net profit for the year ended 31 December 2016
Revenue
Underlying net profit for the year ended 31 December 2016
Revenue
Underlying net profit for the year ended 31 December 2016
Revenue
Revenue
Revenue
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
Revenue
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
Revenue
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
Revenue
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
Revenue
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
Revenue
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
were impacted by the 15 day power outage.
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
were impacted by the 15 day power outage.
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
were impacted by the 15 day power outage.
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
were impacted by the 15 day power outage.
were impacted by the 15 day power outage.
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
were impacted by the 15 day power outage.
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
were impacted by the 15 day power outage.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
were impacted by the 15 day power outage.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
were impacted by the 15 day power outage.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
were impacted by the 15 day power outage.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
were impacted by the 15 day power outage.
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
approach reduces the volatility from contractual quotation period terms.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
approach reduces the volatility from contractual quotation period terms.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
approach reduces the volatility from contractual quotation period terms.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
approach reduces the volatility from contractual quotation period terms.
approach reduces the volatility from contractual quotation period terms.
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
approach reduces the volatility from contractual quotation period terms.
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
approach reduces the volatility from contractual quotation period terms.
approach reduces the volatility from contractual quotation period terms.
approach reduces the volatility from contractual quotation period terms.
approach reduces the volatility from contractual quotation period terms.
approach reduces the volatility from contractual quotation period terms.
(108.2)
(108.2)
(108.2)
(108.2)
(108.2)
(108.2)
(11.1)
(108.2)
(11.1)
(11.1)
(108.2)
(11.1)
(11.1)
(108.2)
(108.2)
(11.1)
(108.2)
1.0
(11.1)
1.0
1.0
(11.1)
1.0
1.0
(11.1)
(11.1)
1.0
(11.1)
1.0
1.0
1.0
1.0
1.0
(17.1)
(17.1)
(17.1)
(17.1)
(17.1)
(17.1)
15.5
(17.1)
15.5
15.5
(17.1)
15.5
15.5
(17.1)
(17.1)
15.5
(17.1)
2.2
15.5
2.2
2.2
15.5
2.2
2.2
15.5
15.5
2.2
15.5
63.0
2.2
63.0
63.0
2.2
63.0
63.0
2.2
2.2
63.0
2.2
(2.1)
63.0
(2.1)
(2.1)
63.0
(2.1)
(2.1)
63.0
63.0
(2.1)
63.0
5.7
(2.1)
5.7
5.7
(2.1)
5.7
(2.1)
5.7
(2.1)
5.7
(2.1)
5.7
5.7
5.7
5.7
5.7
56.0
56.0
56.0
56.0
56.0
56.0
(60.3)
56.0
(60.3)
(60.3)
56.0
(60.3)
(60.3)
56.0
56.0
(60.3)
56.0
20.3
(60.3)
20.3
20.3
(60.3)
20.3
20.3
(60.3)
(60.3)
20.3
(60.3)
20.3
20.3
20.3
20.3
20.3
6.3
6.3
6.3
6.3
6.3
6.3
16.7
6.3
16.7
16.7
6.3
16.7
16.7
6.3
6.3
16.7
6.3
(30.5)
16.7
(30.5)
(30.5)
16.7
(30.5)
(30.5)
16.7
16.7
(30.5)
16.7
7.6
(30.5)
7.6
7.6
(30.5)
7.6
7.6
(30.5)
(30.5)
7.6
(30.5)
0.3
7.6
0.3
0.3
7.6
0.3
0.3
7.6
7.6
0.3
7.6
0.3
0.3
0.3
0.3
0.3
0.4
0.4
0.4
0.4
0.4
0.4
29.4
0.4
29.4
29.4
0.4
29.4
0.4
29.4
0.4
29.4
0.4
134.3
29.4
134.3
134.3
29.4
134.3
29.4
134.3
29.4
134.3
29.4
134.3
134.3
134.3
134.3
134.3
66.6
66.6
66.6
66.6
66.6
66.6
66.6
66.6
66.6
66.6
66.6
16.0
16.0
16.0
16.0
16.0
16.0
16.0
16.0
16.0
16.0
16.0
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
5. OZ Minerals financial results are reported under International Financial Reporting Standards (‘IFRS’). This Annual Report and Results for Announcement to the Market include certain non-IFRS measures including Underlying
5. OZ Minerals financial results are reported under International Financial Reporting Standards (‘IFRS’). This Annual Report and Results for Announcement to the Market include certain non-IFRS measures including Underlying
EBITDA, Underlying EBIT and Underlying NPAT. These measures are presented to enable understanding of the underlying performance of the Consolidated Entity without the impact of non-trading items such as adjustments
EBITDA, Underlying EBIT and Underlying NPAT. These measures are presented to enable understanding of the underlying performance of the Consolidated Entity without the impact of non-trading items such as adjustments
to discontinued operations. Non-IFRS measures have not been subject to audit. Underlying EBITDA, Underlying EBIT and Underlying NPAT are included in Note 1 Operating Segments, which form part of the Consolidated
to discontinued operations. Non-IFRS measures have not been subject to audit. Underlying EBITDA, Underlying EBIT and Underlying NPAT are included in Note 1 Operating Segments, which form part of the Consolidated
5. OZ Minerals financial results are reported under International Financial Reporting Standards (‘IFRS’). This Annual Report and Results for Announcement to the Market include certain non-IFRS measures including Underlying
Variance analysis – Underlying net profit after tax 31 December 2015 vs. 31 December 2016
Financial Statements. Refer Note 1 Operating Segments to the Consolidated Financial Statements for further details.
Financial Statements. Refer Note 1 Operating Segments to the Consolidated Financial Statements for further details.
EBITDA, Underlying EBIT and Underlying NPAT. These measures are presented to enable understanding of the underlying performance of the Consolidated Entity without the impact of non-trading items such as adjustments
to discontinued operations. Non-IFRS measures have not been subject to audit. Underlying EBITDA, Underlying EBIT and Underlying NPAT are included in Note 1 Operating Segments, which form part of the Consolidated
$m
Financial Statements. Refer Note 1 Operating Segments to the Consolidated Financial Statements for further details.
Underlying net profit after tax for the year ended 31 December 2015
21
21
21
21
21
21
21
21
21
21
21
39
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Review of consolidated financial results and operations5
Review of consolidated financial results and operations5
OZ Minerals maintained its strong financial performance in 2016 while executing its growth strategy. The impact of lower copper and gold production from
OZ Minerals maintained its strong financial performance in 2016 while executing its growth strategy. The impact of lower copper and gold production from
Review of consolidated financial results and operations5
the Prominent Hill operation was largely offset by the successful cost reduction program contributing to a strong underlying NPAT of $134.3 million for the
the Prominent Hill operation was largely offset by the successful cost reduction program contributing to a strong underlying NPAT of $134.3 million for the
year (2015: $139.6 million when pre-commissioning Malu underground costs and revenue were capitalised). The production and financial results for 2016
OZ Minerals maintained its strong financial performance in 2016 while executing its growth strategy. The impact of lower copper and gold production from
year (2015: $139.6 million when pre-commissioning Malu underground costs and revenue were capitalised). The production and financial results for 2016
were impacted by the 15 day power outage. The cash balance of $655.7 million increased by $103.2 million compared to the prior year after shareholder
the Prominent Hill operation was largely offset by the successful cost reduction program contributing to a strong underlying NPAT of $134.3 million for the
were impacted by the 15 day power outage. The cash balance of $655.7 million increased by $103.2 million compared to the prior year after shareholder
payments of $90.5 million, investment in the Carrapateena project of $38.5 million, Prominent Hill ore inventory, exploration and corporate development
year (2015: $139.6 million when pre-commissioning Malu underground costs and revenue were capitalised). The production and financial results for 2016
payments of $90.5 million, investment in the Carrapateena project of $38.5 million, Prominent Hill ore inventory, exploration and corporate development
were impacted by the 15 day power outage. The cash balance of $655.7 million increased by $103.2 million compared to the prior year after shareholder
payments of $90.5 million, investment in the Carrapateena project of $38.5 million, Prominent Hill ore inventory, exploration and corporate development
During the year, non-underlying items included the expenditure of $37.9 million (pre-tax) relating to the Class action which was settled during the year
During the year, non-underlying items included the expenditure of $37.9 million (pre-tax) relating to the Class action which was settled during the year
activities.
activities.
activities.
resulting in the NPAT attributable to shareholders of $107.8 million (2015: 130.2 million).
resulting in the NPAT attributable to shareholders of $107.8 million (2015: 130.2 million).
During the year, non-underlying items included the expenditure of $37.9 million (pre-tax) relating to the Class action which was settled during the year
resulting in the NPAT attributable to shareholders of $107.8 million (2015: 130.2 million).
Prominent
Prominent
Carrapateena
Carrapateena
Hill
Hill
2016
2016
Prominent
$m
$m
Hill
2016
725.1
725.1
$m
197.0
197.0
Carrapateena
2016
2016
$m
$m
2016
–
–
$m
Exploration &
Exploration &
Development
Development
Exploration &
Development
2016
2016
$m
$m
2016
–
–
$m
Corporate
Corporate
2016
2016
Corporate
$m
$m
2016
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.5)
(0.5)
–
(16.4)
(16.4)
(0.5)
(16.4)
(16.9)
(16.9)
(16.9)
(16.9)
(16.9)
(16.9)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(25.7)
(25.7)
–
4.3
4.3
(25.7)
–
–
4.3
–
–
–
6.8
6.8
–
(14.6)
(14.6)
6.8
(1.9)
(1.9)
(14.6)
–
–
(1.9)
(1.9)
(1.9)
–
(16.5)
(16.5)
(1.9)
(16.5)
Total
Total
2016
2016
Total
$m
$m
725.1
2016
725.1
$m
197.0
197.0
725.1
(99.2)
(99.2)
197.0
822.9
822.9
(99.2)
(296.2)
(296.2)
822.9
(91.3)
(91.3)
(296.2)
(52.9)
(52.9)
(91.3)
(19.7)
(19.7)
(52.9)
(42.2)
(42.2)
(19.7)
36.6
36.6
(42.2)
85.4
85.4
36.6
(380.3)
(380.3)
85.4
(36.7)
(36.7)
(380.3)
(24.3)
(24.3)
(36.7)
–
–
(24.3)
(10.5)
(10.5)
–
2.7
2.7
(10.5)
373.8
373.8
2.7
(361.5)
(361.5)
373.8
152.8
152.8
(361.5)
(208.7)
(208.7)
152.8
165.1
165.1
(208.7)
9.0
9.0
165.1
(39.8)
(39.8)
9.0
134.3
134.3
(39.8)
(26.5)
(26.5)
134.3
107.8
(26.5)
35.7
(108.2)
(11.1)
1.0
(17.1)
15.5
2.2
63.0
(2.1)
5.7
56.0
(60.3)
20.3
6.3
16.7
(30.5)
7.6
0.3
Total
Total
2015
2015
Total
$m
$m
794.5
2015
794.5
$m
182.0
182.0
794.5
(97.1)
(97.1)
182.0
879.4
879.4
(97.1)
(351.7)
(351.7)
879.4
(87.0)
(87.0)
(351.7)
(54.1)
(54.1)
(87.0)
(23.3)
(23.3)
(54.1)
(47.9)
(47.9)
(23.3)
148.1
148.1
(47.9)
34.2
34.2
148.1
(381.7)
(381.7)
34.2
(43.0)
(43.0)
(381.7)
(41.0)
(41.0)
(43.0)
(7.6)
(7.6)
(41.0)
(4.4)
(4.4)
(7.6)
33.2
33.2
(4.4)
434.9
434.9
33.2
(285.1)
(285.1)
434.9
50.0
50.0
(285.1)
(235.1)
(235.1)
50.0
199.8
199.8
(235.1)
2.9
2.9
199.8
(63.1)
(63.1)
2.9
139.6
139.6
(63.1)
(9.4)
(9.4)
139.6
130.2
(9.4)
42.9
$m
139.6
(118.3)
0.6
66.6
16.0
0.4
29.4
134.3
Revenue – Copper
Revenue – Copper
Revenue – Gold and Silver
Revenue – Gold and Silver
Revenue – Copper
Treatment and refining charges
Treatment and refining charges
Revenue – Gold and Silver
Net Revenue
Net Revenue
Treatment and refining charges
Mining
Mining
Net Revenue
Processing
Processing
Mining
Transport
Transport
Transport
Royalties
Royalties
Processing
Site general and administration
Site general and administration
Site general and administration
Deferred waste adjustment
Deferred waste adjustment
Royalties
Inventory adjustment
Inventory adjustment
Deferred waste adjustment
Cost of goods sold
Cost of goods sold
Inventory adjustment
Corporate general and administration
Corporate general and administration
Cost of goods sold
Exploration and other income/(expense)
Exploration and other income/(expense)
Corporate general and administration
Restructuring costs
Restructuring costs
Exploration and other income/(expense)
Net Realisable Value adjustments
Net Realisable Value adjustments
Restructuring costs
Foreign exchange gain/(loss)
Foreign exchange gain/(loss)
Net Realisable Value adjustments
Underlying EBITDA
Underlying EBITDA
Foreign exchange gain/(loss)
Depreciation of PPE
Depreciation of PPE
Directors’ Report
Underlying EBITDA
Capitalised depreciation into inventory
Capitalised depreciation into inventory
Operational and Financial Review
Depreciation of PPE
Net Depreciation
(203.7)
(356.5)
Net Depreciation
Capitalised depreciation into inventory
Underlying EBIT
Underlying EBIT
Net Depreciation
Net finance income/expense
Net finance income/expense
Underlying EBIT
Income tax (expense)/benefit
Income tax (expense)/benefit
Net finance income/expense
Underlying NPAT
Underlying NPAT
Income tax (expense)/benefit
Non underlying items net of tax
Non underlying items net of tax
Underlying NPAT
NPAT
Non underlying items net of tax
Basic and diluted earnings per share (cents per share)
725.1
(99.2)
(99.2)
197.0
822.9
822.9
(99.2)
(296.2)
(296.2)
822.9
(91.3)
(91.3)
(296.2)
(52.9)
(52.9)
(91.3)
(19.7)
(19.7)
(52.9)
(42.2)
(42.2)
(19.7)
36.6
36.6
(42.2)
85.4
85.4
36.6
(380.3)
(380.3)
85.4
(10.5)
(10.5)
(380.3)
0.7
0.7
(10.5)
–
–
0.7
(10.5)
(10.5)
–
(4.1)
(4.1)
(10.5)
418.2
418.2
(4.1)
(356.5)
(356.5)
418.2
152.8
152.8
(203.7)
152.8
214.5
214.5
(203.7)
214.5
Changes in revenues:
Volume – sales
A$ price
Copper
Gold
Silver
Copper
Gold
Silver
Depreciation
Other costs:
Corporate
Exploration
Restructuring Expenses
Other
Tax and net interest
Revenue
Adjustment for 2015 Malu underground pre-production ore
Treatment and refining charges
Royalties
Changes in mine costs:
Production costs
Deferred waste and inventory adjustment
Foreign exchange gain on cash and debtor balances
Underlying net profit for the year ended 31 December 2016
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(12.9)
(12.9)
(12.9)
(12.9)
(12.9)
–
(3.1)
(3.1)
(12.9)
–
–
(3.1)
(3.1)
(3.1)
–
(16.0)
(16.0)
(3.1)
(16.0)
20
20
20
21
Reported revenue of $822.9 million was six per cent lower compared to 2015 as production from the Prominent Hill Operation was lower in 2016. Contained
copper sales of 112,303 tonnes was 14 per cent lower compared to 2015 reflecting the planned production profile of the Prominent Hill mine following a
record year of production in 2015. Contained gold sales of 109,780 ounces was six per cent lower than in 2015. The production and financial results for 2016
were impacted by the 15 day power outage.
During the year A$ copper price was two per cent lower than 2015 while the average A$ gold price was nine per cent higher than 2015. From the second half
of the year, OZ Minerals adopted a copper price risk management approach to lock in the forward price at the time the concentrate is sold to customers. This
approach reduces the volatility from contractual quotation period terms.
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Realisation costs
Realisation costs
Realisation costs
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
Realisation costs
Realisation costs
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
Prominent Hill costs
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
Prominent Hill costs
Prominent Hill costs
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
Prominent Hill costs
Prominent Hill costs
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
while increasing the cash balance of the consolidated entity.
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
while increasing the cash balance of the consolidated entity.
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
while increasing the cash balance of the consolidated entity.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
while increasing the cash balance of the consolidated entity.
while increasing the cash balance of the consolidated entity.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
matures.
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
matures.
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
matures.
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
matures.
matures.
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
the 15 day power outage.
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
the 15 day power outage.
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
the 15 day power outage.
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
the 15 day power outage.
the 15 day power outage.
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
contributor.
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
contributor.
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
contributor.
contributor.
Other Costs
contributor.
Other Costs
Other Costs
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Other Costs
Other Costs
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
million were capitalised in the second half of the year.
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
million were capitalised in the second half of the year.
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
million were capitalised in the second half of the year.
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
million were capitalised in the second half of the year.
million were capitalised in the second half of the year.
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
of foreign exchange movements on the cash balance.
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
of foreign exchange movements on the cash balance.
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
of foreign exchange movements on the cash balance.
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
of foreign exchange movements on the cash balance.
of foreign exchange movements on the cash balance.
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
strategic sourcing, business services, information technology and insurance.
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
strategic sourcing, business services, information technology and insurance.
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
strategic sourcing, business services, information technology and insurance.
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
strategic sourcing, business services, information technology and insurance.
strategic sourcing, business services, information technology and insurance.
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
income-tax expense recognised in the Income Statement.
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
income-tax expense recognised in the Income Statement.
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
income-tax expense recognised in the Income Statement.
income-tax expense recognised in the Income Statement.
income-tax expense recognised in the Income Statement.
22
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Finance Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Realisation costs
Realisation costs
Realisation costs
Realisation costs
Realisation costs
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Treatment charges and refining costs (‘TCRC’) were higher by $2.1 million reflecting the composition of the shipments made during the year resulting in
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
higher commercial costs partially offset by lower concentrate volumes and lower refining charges.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
Transportation and freight costs during the year decreased by two per cent as a direct result of lower tonnages of concentrate sold.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
The reduction in royalty of $5.7 million was due to lower sales during the year compared to the prior period.
Prominent Hill costs
Prominent Hill costs
Prominent Hill costs
Prominent Hill costs
Prominent Hill costs
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
while increasing the cash balance of the consolidated entity.
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
2016 was another strong performance with cost of goods sold in line with the previous year however cash expenditure was lower than 2015 with lower
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
waste mining activity in the open pit. The procurement savings, combined with strong capital discipline, enabled Prominent Hill to deliver copper guidance
while increasing the cash balance of the consolidated entity.
while increasing the cash balance of the consolidated entity.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
while increasing the cash balance of the consolidated entity.
while increasing the cash balance of the consolidated entity.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
Mining costs were lower by $55.5 million in 2016 as a result of lower activity and continued effective equipment utilisation. During the year, there was less
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
mining equipment and fewer personnel following the demobilisation of an excavator and associated fleet in the first quarter.
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
The cash cost to mine a tonne of ore from the open pit in 2016 of $11.6 was lower than $23.3 in 2015 due to the significantly lower waste-to-ore strip ratio,
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
which was approximately 1:1 in 2016 compared to 3.1:1 in 2015. Open pit mining unit costs of $6.20 per tonne in 2016 were higher compared to $5.70 in
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2015, as a result of fixed costs being spread over less material mined, the deeper open pit and longer haulage distances. As a result of the declining strip
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
ratio, the deferral of mining costs to the balance sheet was lower by $111.5 million ($148.1 million in 2015, $36.6 million in 2016).
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
2.1 million tonnes were mined from the underground compared to 1.9 million tonnes in 2015. This is expected to increase following the completion of the
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
second decline in the third quarter of 2017. Underground operating costs for the full year were $53 per tonne mined with a full year of underground Malu
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
area costs incurred (first half of 2015 capitalised), continued capital development (including the second decline) and improving operating activity as the mine
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
the 15 day power outage.
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
Ore milled in 2016 of 9.5 million tonnes was lower than the prior year of 10.6 million tonnes due to the impacts of the unplanned repair of the girth gear and
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
the 15 day power outage.
the 15 day power outage.
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
Ore continues to be stockpiled for processing in later periods after the open pit ceases operations in 2018. The concentrate and ore inventory movement of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
$227.8 million in 2016 was higher than the 2015 movement of $79.8 million. This was a result of an increase in ore stocks by 7.7 million tonnes of
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
predominantly open pit ore during 2016 (3.6 million tonnes in 2015).
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
Depreciation expense increased by $76.4 million compared to 2015 predominantly due to higher ore mined, with the deferred mining asset being the largest
the 15 day power outage.
the 15 day power outage.
contributor.
contributor.
matures.
matures.
matures.
matures.
matures.
Other Costs
Other Costs
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
million were capitalised in the second half of the year.
million were capitalised in the second half of the year.
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Exploration and evaluation costs related to the Carrapateena project of $12.9 million incurred during the first half of the year were recognised in the Income
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
Statement. Following the PFS and subsequent Board determination, all costs relating to the evaluation and development of the Carrapateena project of $32.7
million were capitalised in the second half of the year.
million were capitalised in the second half of the year.
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
million were capitalised in the second half of the year.
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
Exploration and Development expenditure of $16.4 million incurred during the year also included $13.4 million relating to the six exploration earn-in
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
arrangements and the exploration project in Jamaica from which OZ Minerals exited during the year and $3.0 million relating to corporate development
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
including due diligence costs. During the year, OZ Minerals also received a government grant of $4.0 million.
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
In early 2016, the company determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments which minimised the impact
of foreign exchange movements on the cash balance.
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
of foreign exchange movements on the cash balance.
of foreign exchange movements on the cash balance.
strategic sourcing, business services, information technology and insurance.
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
Corporate general and administration costs of $36.7 million comprise costs incurred in direct support of operating activities of $11.0 million and those related
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
to largely corporate activities of $25.7 million. An allocation of the costs related to support of operating activities cover a range of services and costs provided
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
strategic sourcing, business services, information technology and insurance.
strategic sourcing, business services, information technology and insurance.
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
at the Corporate office to Prominent Hill, Carrapateena, and Exploration and Development operating segments. These costs include sales and marketing,
strategic sourcing, business services, information technology and insurance.
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
strategic sourcing, business services, information technology and insurance.
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
The income tax expense for the year ended 31 December 2016 was $28.4 million and is lower than the Australian corporate tax rate of 30 per cent due to the
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
recognition of $13.6 million of restricted tax losses, as a result of a reassessment of the future tax profile of the company. A current tax provision of $69.0
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
million was recognised which was 51 per cent of the EBT reflecting the unwinding of the deferred tax liabilities that were recognised predominantly in relation
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
to the open pit deferred waste. As the deferred tax liabilities relate to the open pit unwind over 2016 to 2018, the tax cash flows are expected to exceed the
income-tax expense recognised in the Income Statement.
income-tax expense recognised in the Income Statement.
of foreign exchange movements on the cash balance.
of foreign exchange movements on the cash balance.
income-tax expense recognised in the Income Statement.
income-tax expense recognised in the Income Statement.
income-tax expense recognised in the Income Statement.
contributor.
contributor.
Other Costs
contributor.
Other Costs
Other Costs
22
22
22
22
22
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Non underlying items, net of tax
Non underlying items, net of tax
During 2016 non underlying items included settlement and legal costs relating to the class action of $26.5 million net of tax (refer to Note 16 to the
During 2016 non underlying items included settlement and legal costs relating to the class action of $26.5 million net of tax (refer to Note 16 to the
Non underlying items, net of tax
Consolidated Financial Statements).
Consolidated Financial Statements).
During 2016 non underlying items included settlement and legal costs relating to the class action of $26.5 million net of tax (refer to Note 16 to the
Non underlying items, net of tax
Consolidated Financial Statements).
During 2016 non underlying items included settlement and legal costs relating to the class action of $26.5 million net of tax (refer to Note 16 to the
Consolidated Financial Statements).
Cash flow
Cash flow
Cash flow
900
900
Cash flow
900
850
850
900
850
900
850
800
800
800
850
800
750
750
750
800
750
700
700
m
$
m
$
700
m
$
750
700
650
650
m
$
650
700
650
600
600
m
$
600
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
650
600
550
550
600
550
500
500
552.5
550
500
552.5
552.5
550
500
500
324.1
324.1
324.1
324.1
324.1
([VALUE])
([VALUE])
(122.1)
([VALUE])
([VALUE])
([VALUE])
([VALUE])
(97.6)
([VALUE])
([VALUE])
(1.2)
(1.2)
(1.2)
(1.2)
(1.2)
655.7
655.7
655.7
Opening January
Opening January 2016
Opening January 2016
552.5
2016 cash balance
cash balance
cash balance
Operating activities
Operating activities
Operating activities
Investing activities
Investing activities
Investing activities
Effect of exchange
Financing activities
Financing activities Effect of exchange rate
Financing activities Effect of exchange rate
rate changes
changes
changes
655.7
Closing December
Closing December
Closing December
2016 cash balance
2016 cash balance
2016 cash balance
655.7
Opening January 2016
552.5
cash balance
Operating activities
Investing activities
Financing activities Effect of exchange rate
changes
Closing December
2016 cash balance
changes
Investing activities
Operating activities
Closing December
2016 cash balance
Financing activities Effect of exchange rate
Opening January 2016
cash balance
Operating cash flows
Operating cash flows
Operational and Financial Review
Operating cash flows for the year ended 31 December 2016 of $324.1 million was a reduction of $105.7 million compared to the prior year as a result of
Operating cash flows for the year ended 31 December 2016 of $324.1 million was a reduction of $105.7 million compared to the prior year as a result of
Operating cash flows
Operational and Financial Review
lower concentrate sales, partially offset by the successful cost reduction program. Payments to suppliers and employees were higher by $66.9 million as the
lower concentrate sales, partially offset by the successful cost reduction program. Payments to suppliers and employees were higher by $66.9 million as the
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
open pit ore production increased by 22 per cent, (while total open pit mining costs have reduced, the allocation to deferred waste asset has reduced and as a
open pit ore production increased by 22 per cent, (while total open pit mining costs have reduced, the allocation to deferred waste asset has reduced and as a
Operating cash flows for the year ended 31 December 2016 of $324.1 million was a reduction of $105.7 million compared to the prior year as a result of
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operating cash flows
result the costs attributable to ore mining which is an operating activity, has increased) the receipts from customers decreased by $55.6 million and
result the costs attributable to ore mining which is an operating activity, has increased) the receipts from customers decreased by $55.6 million and
lower concentrate sales, partially offset by the successful cost reduction program. Payments to suppliers and employees were higher by $66.9 million as the
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
exploration expenditure decreased by $10.2 million.
exploration expenditure decreased by $10.2 million.
open pit ore production increased by 22 per cent, (while total open pit mining costs have reduced, the allocation to deferred waste asset has reduced and as a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operating cash flows for the year ended 31 December 2016 of $324.1 million was a reduction of $105.7 million compared to the prior year as a result of
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
result the costs attributable to ore mining which is an operating activity, has increased) the receipts from customers decreased by $55.6 million and
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
lower concentrate sales, partially offset by the successful cost reduction program. Payments to suppliers and employees were higher by $66.9 million as the
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Investing cash flows
Investing cash flows
copper deposits at Carrapateena.
exploration expenditure decreased by $10.2 million.
positioned for growth.
open pit ore production increased by 22 per cent, (while total open pit mining costs have reduced, the allocation to deferred waste asset has reduced and as a
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Net investing cash flows of $122.1 million were a combination of payments for property plant and equipment at Prominent Hill, capitalisation of exploration
Net investing cash flows of $122.1 million were a combination of payments for property plant and equipment at Prominent Hill, capitalisation of exploration
result the costs attributable to ore mining which is an operating activity, has increased) the receipts from customers decreased by $55.6 million and
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
Investing cash flows
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
and development costs at Carrapateena and receipts from the sale of minor investments in equity securities.
and development costs at Carrapateena and receipts from the sale of minor investments in equity securities.
exploration expenditure decreased by $10.2 million.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Net investing cash flows of $122.1 million were a combination of payments for property plant and equipment at Prominent Hill, capitalisation of exploration
commitment to operating discipline. Highlights for Prominent Hill were:
The payments incurred related to the following:
The payments incurred related to the following:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Investing cash flows
copper deposits at Carrapateena.
and development costs at Carrapateena and receipts from the sale of minor investments in equity securities.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Deferred waste stripping costs of $36.6 million;
• Deferred waste stripping costs of $36.6 million;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Net investing cash flows of $122.1 million were a combination of payments for property plant and equipment at Prominent Hill, capitalisation of exploration
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
The payments incurred related to the following:
• Capitalised Carrapateena costs of $25.6 million;
• Capitalised Carrapateena costs of $25.6 million;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
and development costs at Carrapateena and receipts from the sale of minor investments in equity securities.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Deferred waste stripping costs of $36.6 million;
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Mine development costs of the underground operation of $47.5 million, and
• Mine development costs of the underground operation of $47.5 million, and
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
The payments incurred related to the following:
• Capitalised Carrapateena costs of $25.6 million;
• Other sustaining capital expenditure of $15.7 million; partially offset by
• Other sustaining capital expenditure of $15.7 million; partially offset by
• Deferred waste stripping costs of $36.6 million;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Mine development costs of the underground operation of $47.5 million, and
• Receipts from sale of investments of $3.3 million.
• Receipts from sale of investments of $3.3 million.
• Capitalised Carrapateena costs of $25.6 million;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Other sustaining capital expenditure of $15.7 million; partially offset by
of the project is currently underway with a number of milestones achieved in 2016:
• Mine development costs of the underground operation of $47.5 million, and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Receipts from sale of investments of $3.3 million.
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Other sustaining capital expenditure of $15.7 million; partially offset by
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
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• Construction commenced on the Tjati decline; and
• Receipts from sale of investments of $3.3 million.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
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of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
• Successful completion of the PFS with robust financials and short payback period;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Construction commenced on the Tjati decline; and
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location of the facility.
• Construction commenced on the Tjati decline; and
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
location of the facility.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
companies which provides exploration expertise in specific geologies and locations.
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
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41
Annual and Sustainability Report 2016
Directors’ Report
Operational and Financial Review
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Financing activities
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
Financing activities
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
Financing activities
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
cancelled and presented as a deduction to issued capital.
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
Financing activities
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
cancelled and presented as a deduction to issued capital.
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
million. This final dividend is fully franked for Australian Tax purposes.
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
cancelled and presented as a deduction to issued capital.
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
million. This final dividend is fully franked for Australian Tax purposes.
cancelled and presented as a deduction to issued capital.
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
$60m share buyback program which expires on 26 February.
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
million. This final dividend is fully franked for Australian Tax purposes.
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
$60m share buyback program which expires on 26 February.
million. This final dividend is fully franked for Australian Tax purposes.
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
$60m share buyback program which expires on 26 February.
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
Balance Sheet
$60m share buyback program which expires on 26 February.
Balance Sheet
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
Balance Sheet
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
value of gold derivative contacts of $3.6 million net of tax.
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
Balance Sheet
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
value of gold derivative contacts of $3.6 million net of tax.
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
value of gold derivative contacts of $3.6 million net of tax.
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
value of gold derivative contacts of $3.6 million net of tax.
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
for processing and adjusted for incremental costs.
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
for processing and adjusted for incremental costs.
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
for processing and adjusted for incremental costs.
services contract with Thiess through a reduced mining services charge.
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
for processing and adjusted for incremental costs.
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
services contract with Thiess through a reduced mining services charge.
Outlook
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
services contract with Thiess through a reduced mining services charge.
Outlook
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
services contract with Thiess through a reduced mining services charge.
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
Outlook
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
Outlook
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
lowest cost quartile of global copper producers.
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
lowest cost quartile of global copper producers.
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
quartile of global copper producers.
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
lowest cost quartile of global copper producers.
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
quartile of global copper producers.
lowest cost quartile of global copper producers.
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
quartile of global copper producers.
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
quartile of global copper producers.
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
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Finance
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Financing activities
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
Financing activities
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Financing activities
cancelled and presented as a deduction to issued capital.
Financing activities
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
Cash flows relating to financing activities were an outflow of $97.6 million, of which $60.6 million were dividends, $29.9 million related to share buyback
cancelled and presented as a deduction to issued capital.
million. This final dividend is fully franked for Australian Tax purposes.
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
and $7.1 million related to purchase of shares to meet the share based payment obligations. During the year, 4,805,272 shares have been bought and
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
cancelled and presented as a deduction to issued capital.
cancelled at an average cost of $6.23 per share. Shares acquired as part of the on-market share buyback program amounted to $29.9 million and were
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
million. This final dividend is fully franked for Australian Tax purposes.
cancelled and presented as a deduction to issued capital.
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
$60m share buyback program which expires on 26 February.
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
million. This final dividend is fully franked for Australian Tax purposes.
Since the end of the financial year, the Board of Directors has resolved to pay a final dividend in respect of the 2016 financial year amounting to $41.8
$60m share buyback program which expires on 26 February.
million. This final dividend is fully franked for Australian Tax purposes.
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
$60m share buyback program which expires on 26 February.
With the move to fully franked dividends and with forthcoming investment decisions due on Carrapateena, the Board has decided not to renew the 12-month,
Balance Sheet
Balance Sheet
Balance Sheet
$60m share buyback program which expires on 26 February.
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
value of gold derivative contacts of $3.6 million net of tax.
Balance Sheet
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
value of gold derivative contacts of $3.6 million net of tax.
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
Net assets and total equity increased by $10.4 million during the year to $2,354.3 million, mainly due to current year profit of $107.8 million partially offset
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
by dividends of $60.6 million, share buyback of $29.9 million, the reduction in the value of investments in equity securities of $10.3 million and an increase in
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
value of gold derivative contacts of $3.6 million net of tax.
value of gold derivative contacts of $3.6 million net of tax.
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
The company ended the year with a cash balance of $655.7 million and undrawn debt facilities of US$100 million with an uncommitted accordion facility for
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
for processing and adjusted for incremental costs.
$300 million providing the liquidity and flexibility to execute on the Company’s growth strategy.
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
Inventories at 31 December 2016 were $557.1 million of which non-current ore stockpiles increased by $173.4 million in line with the accelerated open pit
for processing and adjusted for incremental costs.
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
mining strategy. The addition to ore inventories during the year was partially offset by net realisable value write down of $10.5 million of low grade gold ore
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
services contract with Thiess through a reduced mining services charge.
stockpiles. The net realisable value is estimated based on the revenue to be derived from metal contained in the ore stockpiles based on the operational plan
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
for processing and adjusted for incremental costs.
for processing and adjusted for incremental costs.
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
services contract with Thiess through a reduced mining services charge.
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
The lease receivable of $34.8 million at 31 December 2015 reduced by $7.3 million following the amortisation of the lease receivable during the year. The
Outlook
services contract with Thiess through a reduced mining services charge.
consideration paid in 2012 to acquire mining equipment recognised as a lease receivable will be recovered by OZ Minerals progressively over the mining
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
Outlook
services contract with Thiess through a reduced mining services charge.
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
Outlook
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
Outlook
lowest cost quartile of global copper producers.
quartile of global copper producers.
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
OZ Minerals expects 2017 to be another strong year at Prominent Hill, and has accordingly set guidance for contained copper production at 105,000 to
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
lowest cost quartile of global copper producers.
115,000 tonnes6. Higher margin copper production will be prioritised over gold production.
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
lowest cost quartile of global copper producers.
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
C1 unit cost guidance for the 2017 calendar year has been set at US85 cents to US95 cents per payable pound of copper, and is expected to remain in the
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
quartile of global copper producers.
lowest cost quartile of global copper producers.
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
All In Sustaining Cost (‘AISC’) guidance for 2017 calendar year of between US120 cents to US130 cents per payable pound of copper is also within the lowest
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
quartile of global copper producers.
quartile of global copper producers.
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
Total open pit movement will significantly reduce in 2017 to between 15Mt to 20Mt as the strip ratio declines. As a consequence, in second quarter of 2017,
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
Thiess will demobilise another excavator fleet. With less material movement, open pit unit mining costs will increase slightly to $7.25 to $7.75 per tonne,
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
however the reduction in open pit strip ratio to around 0.5:1 times results in overall lower costs per tonne of ore.
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
Underground ore movement will increase in 2017 to between 2.3Mt and 2.6Mt as the underground continues to expand. As previously announced, work
progressed well during the year on the second decline into the underground to further increase the capacity of the mine.
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
A decision by the Board on the next stage of Carrapateena is expected to be made in the second quarter of 2017 on the basis of the feasibility study update.
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
6This information is extracted from the report entitled ‘Record production sets scene for dividends and growth’ released to the ASX on 10 February 2016 and is available at http://www.ozminerals.com/media/asx/. OZ Minerals
confirms that all material assumptions underpinning the production target in that report continue to apply and have not materially changed
24
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Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
expenditure in 2017 is expected to be between $10 to $15 million.
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
expenditure in 2017 is expected to be between $10 to $15 million.
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
expenditure in 2017 is expected to be between $10 to $15 million.
expenditure in 2017 is expected to be between $10 to $15 million.
expenditure in 2017 is expected to be between $10 to $15 million.
Risks
Risks
Risks
Risks
Risks
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
achieve enhanced business outcomes.
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
achieve enhanced business outcomes.
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
achieve enhanced business outcomes.
achieve enhanced business outcomes.
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
achieve enhanced business outcomes.
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
were identified by the company which have the potential to affect future operating and financial performance.
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
were identified by the company which have the potential to affect future operating and financial performance.
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
were identified by the company which have the potential to affect future operating and financial performance.
were identified by the company which have the potential to affect future operating and financial performance.
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
were identified by the company which have the potential to affect future operating and financial performance.
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
to failure or disruption, the Company’s expected financial result may be significantly impacted.
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
to failure or disruption, the Company’s expected financial result may be significantly impacted.
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
to failure or disruption, the Company’s expected financial result may be significantly impacted.
to failure or disruption, the Company’s expected financial result may be significantly impacted.
to failure or disruption, the Company’s expected financial result may be significantly impacted.
Context
Context
Context
Context
Context
Strategic Risks
Strategic Risks
Strategic Risks
Strategic Risks
Strategic Risks
One operating asset
One operating asset
One operating asset
One operating asset
Operating only one producing asset exposes the
One operating asset
Operating only one producing asset exposes the
Operating only one producing asset exposes the
Consolidated Entity to concentration risks.
Operating only one producing asset exposes the
Consolidated Entity to concentration risks.
Consolidated Entity to concentration risks.
Operating only one producing asset exposes the
Consolidated Entity to concentration risks.
Consolidated Entity to concentration risks.
Continuity of Power supply
Continuity of Power supply
Continuity of Power supply
Continuity of Power supply
Prominent Hill mine and the Carrapateena
Continuity of Power supply
Prominent Hill mine and the Carrapateena
Prominent Hill mine and the Carrapateena
project are both located in South Australia
Prominent Hill mine and the Carrapateena
project are both located in South Australia
project are both located in South Australia
which has experienced significant power
Prominent Hill mine and the Carrapateena
project are both located in South Australia
which has experienced significant power
which has experienced significant power
disruption in 2016.
project are both located in South Australia
which has experienced significant power
disruption in 2016.
disruption in 2016.
which has experienced significant power
disruption in 2016.
disruption in 2016.
Growth strategy
Growth strategy
Growth strategy
Growth strategy
Pathways to growth through acquisition or
Growth strategy
Pathways to growth through acquisition or
Pathways to growth through acquisition or
development of value accretive copper assets
Pathways to growth through acquisition or
development of value accretive copper assets
development of value accretive copper assets
continue to be a key element of the Company’s
Pathways to growth through acquisition or
development of value accretive copper assets
continue to be a key element of the Company’s
continue to be a key element of the Company’s
growth strategy.
development of value accretive copper assets
continue to be a key element of the Company’s
growth strategy.
growth strategy.
continue to be a key element of the Company’s
growth strategy.
growth strategy.
Risk
Risk
Risk
Risk
Risk
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
The Prominent Hill mine generates most of the
The Prominent Hill mine generates most of the
The Prominent Hill mine generates most of the
income and cash flows of the company and has
The Prominent Hill mine generates most of the
income and cash flows of the company and has
income and cash flows of the company and has
historically been solely dependent on the one
The Prominent Hill mine generates most of the
income and cash flows of the company and has
historically been solely dependent on the one
historically been solely dependent on the one
source of ore from the open pit.
income and cash flows of the company and has
historically been solely dependent on the one
source of ore from the open pit.
source of ore from the open pit.
historically been solely dependent on the one
source of ore from the open pit.
source of ore from the open pit.
Prominent Hill power supply contracts will be
Prominent Hill power supply contracts will be
Prominent Hill power supply contracts will be
renegotiated in mid-2017 while the
Prominent Hill power supply contracts will be
renegotiated in mid-2017 while the
renegotiated in mid-2017 while the
Carrapateena power infrastructure and supply
Prominent Hill power supply contracts will be
renegotiated in mid-2017 while the
Carrapateena power infrastructure and supply
Carrapateena power infrastructure and supply
agreements are being developed. With the
renegotiated in mid-2017 while the
Carrapateena power infrastructure and supply
agreements are being developed. With the
agreements are being developed. With the
prevailing electricity prices and power outages
Carrapateena power infrastructure and supply
agreements are being developed. With the
prevailing electricity prices and power outages
prevailing electricity prices and power outages
in the state, OZ Minerals competes with other
agreements are being developed. With the
prevailing electricity prices and power outages
in the state, OZ Minerals competes with other
in the state, OZ Minerals competes with other
users of power for uninterrupted power supply
prevailing electricity prices and power outages
in the state, OZ Minerals competes with other
users of power for uninterrupted power supply
users of power for uninterrupted power supply
at competitive prices.
in the state, OZ Minerals competes with other
users of power for uninterrupted power supply
at competitive prices.
at competitive prices.
users of power for uninterrupted power supply
at competitive prices.
at competitive prices.
Prominent Hill now operates an integrated
Prominent Hill now operates an integrated
Prominent Hill now operates an integrated
underground mine with multiple areas that
Prominent Hill now operates an integrated
underground mine with multiple areas that
underground mine with multiple areas that
mitigate the sole dependence on the open pit.
Prominent Hill now operates an integrated
underground mine with multiple areas that
mitigate the sole dependence on the open pit.
mitigate the sole dependence on the open pit.
underground mine with multiple areas that
mitigate the sole dependence on the open pit.
The company has an active program focused on
mitigate the sole dependence on the open pit.
The company has an active program focused on
The company has an active program focused on
the utilisation of trigger action response plans to
The company has an active program focused on
the utilisation of trigger action response plans to
the utilisation of trigger action response plans to
maintain the ongoing stability of the open pit
The company has an active program focused on
the utilisation of trigger action response plans to
maintain the ongoing stability of the open pit
maintain the ongoing stability of the open pit
walls. The OZ Minerals maintenance and
the utilisation of trigger action response plans to
maintain the ongoing stability of the open pit
walls. The OZ Minerals maintenance and
walls. The OZ Minerals maintenance and
engineering team have developed robust
maintain the ongoing stability of the open pit
walls. The OZ Minerals maintenance and
engineering team have developed robust
engineering team have developed robust
procedures and practices to ensure they are
walls. The OZ Minerals maintenance and
engineering team have developed robust
procedures and practices to ensure they are
procedures and practices to ensure they are
operating the processing plant with minimal
engineering team have developed robust
procedures and practices to ensure they are
operating the processing plant with minimal
operating the processing plant with minimal
disruption and at high throughput levels.
procedures and practices to ensure they are
operating the processing plant with minimal
disruption and at high throughput levels.
disruption and at high throughput levels.
operating the processing plant with minimal
disruption and at high throughput levels.
Concentrate is transported to Australian
disruption and at high throughput levels.
Concentrate is transported to Australian
Concentrate is transported to Australian
destinations using road and rail and shipped to
Concentrate is transported to Australian
destinations using road and rail and shipped to
destinations using road and rail and shipped to
overseas destinations from the Port of Adelaide.
Concentrate is transported to Australian
destinations using road and rail and shipped to
overseas destinations from the Port of Adelaide.
overseas destinations from the Port of Adelaide.
The use of customised containers with lids and
destinations using road and rail and shipped to
overseas destinations from the Port of Adelaide.
The use of customised containers with lids and
The use of customised containers with lids and
rotainers to load concentrate onto ships mitigates
overseas destinations from the Port of Adelaide.
The use of customised containers with lids and
rotainers to load concentrate onto ships mitigates
rotainers to load concentrate onto ships mitigates
the risk of spillage and impact on the
The use of customised containers with lids and
rotainers to load concentrate onto ships mitigates
the risk of spillage and impact on the
the risk of spillage and impact on the
environment.
rotainers to load concentrate onto ships mitigates
the risk of spillage and impact on the
environment.
environment.
the risk of spillage and impact on the
environment.
environment.
The Company has commenced the development of
The Company has commenced the development of
The Company has commenced the development of
an energy strategy to align with the growth
The Company has commenced the development of
an energy strategy to align with the growth
an energy strategy to align with the growth
strategy particularly in the Gawler Craton.
The Company has commenced the development of
an energy strategy to align with the growth
strategy particularly in the Gawler Craton.
strategy particularly in the Gawler Craton.
an energy strategy to align with the growth
strategy particularly in the Gawler Craton.
strategy particularly in the Gawler Craton.
Existence of large resource at Prominent Hill
Existence of large resource at Prominent Hill
Existence of large resource at Prominent Hill
operation, Carrapateena, Khamsin, Fremantle
Existence of large resource at Prominent Hill
operation, Carrapateena, Khamsin, Fremantle
operation, Carrapateena, Khamsin, Fremantle
Doctor, West Musgrave (JV), other exploration JVs
Existence of large resource at Prominent Hill
operation, Carrapateena, Khamsin, Fremantle
Doctor, West Musgrave (JV), other exploration JVs
Doctor, West Musgrave (JV), other exploration JVs
and prospectivity of the Gawler Craton.
operation, Carrapateena, Khamsin, Fremantle
Doctor, West Musgrave (JV), other exploration JVs
and prospectivity of the Gawler Craton.
and prospectivity of the Gawler Craton.
Doctor, West Musgrave (JV), other exploration JVs
and prospectivity of the Gawler Craton.
and prospectivity of the Gawler Craton.
OZ Minerals has a clear pipeline of projects and
OZ Minerals has a clear pipeline of projects and
OZ Minerals has a clear pipeline of projects and
gated plans which ensure a disciplined
OZ Minerals has a clear pipeline of projects and
gated plans which ensure a disciplined
gated plans which ensure a disciplined
approach to leverage the large resource base.
OZ Minerals has a clear pipeline of projects and
gated plans which ensure a disciplined
approach to leverage the large resource base.
approach to leverage the large resource base.
gated plans which ensure a disciplined
approach to leverage the large resource base.
The primary focus of corporate development is
approach to leverage the large resource base.
The primary focus of corporate development is
The primary focus of corporate development is
The primary focus of corporate development is
The primary focus of corporate development is
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Annual and Sustainability Report 2016
Directors’ Report
Operational and Financial Review
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
expenditure in 2017 is expected to be between $10 to $15 million.
Risks
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
Directors’ Report
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
Operational and Financial Review
achieve enhanced business outcomes.
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
were identified by the company which have the potential to affect future operating and financial performance.
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
to failure or disruption, the Company’s expected financial result may be significantly impacted.
Context
Strategic Risks
One operating asset
Risk
Mitigation/Actions
Operating only one producing asset exposes the
Consolidated Entity to concentration risks.
The Prominent Hill mine generates most of the
income and cash flows of the company and has
historically been solely dependent on the one
source of ore from the open pit.
Continuity of Power supply
Prominent Hill mine and the Carrapateena
project are both located in South Australia
which has experienced significant power
disruption in 2016.
Prominent Hill power supply contracts will be
renegotiated in mid-2017 while the
Carrapateena power infrastructure and supply
agreements are being developed. With the
prevailing electricity prices and power outages
in the state, OZ Minerals competes with other
users of power for uninterrupted power supply
at competitive prices.
Prominent Hill now operates an integrated
underground mine with multiple areas that
mitigate the sole dependence on the open pit.
The company has an active program focused on
the utilisation of trigger action response plans to
maintain the ongoing stability of the open pit
walls. The OZ Minerals maintenance and
engineering team have developed robust
procedures and practices to ensure they are
operating the processing plant with minimal
disruption and at high throughput levels.
Concentrate is transported to Australian
destinations using road and rail and shipped to
overseas destinations from the Port of Adelaide.
The use of customised containers with lids and
rotainers to load concentrate onto ships mitigates
the risk of spillage and impact on the
environment.
The Company has commenced the development of
an energy strategy to align with the growth
strategy particularly in the Gawler Craton.
Growth strategy
Pathways to growth through acquisition or
development of value accretive copper assets
continue to be a key element of the Company’s
growth strategy.
Existence of large resource at Prominent Hill
operation, Carrapateena, Khamsin, Fremantle
Doctor, West Musgrave (JV), other exploration JVs
and prospectivity of the Gawler Craton.
OZ Minerals has a clear pipeline of projects and
gated plans which ensure a disciplined
approach to leverage the large resource base.
The primary focus of corporate development is
25
Finance
Directors’ Report
Operational and Financial Review
Completion of the West Musgrave Scoping Study is expected in the fourth quarter of 2017 with a decision on whether to progress to a PFS.
Exploration activities will focus on progressing the six exploration earn-in agreements and growing the pipeline with further opportunities. Exploration
expenditure in 2017 is expected to be between $10 to $15 million.
Risks
OZ Minerals’ operating and financial results and performance is subject to a wide range of risks and uncertainties (both opportunities and threats) including
financial, political, operational and environmental. The Consolidated Entity manages and mitigates these risks where appropriate to minimise adverse impact
on its performance from threats and maximise beneficial outcomes from opportunities. A flat corporate governance structure and direct channels of
communication ensures timely responses to emerging risks. The Company’s Risk Management Framework lays emphasis on risk aware decision making to
achieve enhanced business outcomes.
The Board has oversight responsibility and determines overall risk appetite for the Consolidated Entity. OZ Minerals operates a risk management system with
multiple lines of defence with line managers, operational staff and corporate functions that establish standards for managing risk; and the Committees of the
Board which review risk management as part of their role of oversight and inspection. Provided in the table below are the risks and mitigating factors that
were identified by the company which have the potential to affect future operating and financial performance.
While development of mitigating controls for threats minimises adverse impact on the performance of the company, should any of these elements be subject
to failure or disruption, the Company’s expected financial result may be significantly impacted.
Risk
Mitigation/Actions
Context
Strategic Risks
One operating asset
Operating only one producing asset exposes the
The Prominent Hill mine generates most of the
Prominent Hill now operates an integrated
Consolidated Entity to concentration risks.
income and cash flows of the company and has
underground mine with multiple areas that
historically been solely dependent on the one
mitigate the sole dependence on the open pit.
source of ore from the open pit.
Continuity of Power supply
Prominent Hill mine and the Carrapateena
project are both located in South Australia
which has experienced significant power
disruption in 2016.
Prominent Hill power supply contracts will be
The Company has commenced the development of
renegotiated in mid-2017 while the
an energy strategy to align with the growth
Carrapateena power infrastructure and supply
strategy particularly in the Gawler Craton.
agreements are being developed. With the
prevailing electricity prices and power outages
in the state, OZ Minerals competes with other
users of power for uninterrupted power supply
at competitive prices.
Growth strategy
Pathways to growth through acquisition or
Existence of large resource at Prominent Hill
OZ Minerals has a clear pipeline of projects and
development of value accretive copper assets
operation, Carrapateena, Khamsin, Fremantle
gated plans which ensure a disciplined
continue to be a key element of the Company’s
Doctor, West Musgrave (JV), other exploration JVs
approach to leverage the large resource base.
growth strategy.
and prospectivity of the Gawler Craton.
The primary focus of corporate development is
25
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Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Risk
Risk
Risk
Risk
Risk
Risk
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Context
Context
Context
Context
Context
Context
Operational Risks
Operational Risks
Operational Risks
Operational Risks
Operational Risks
Operational Risks
Project Execution
Project Execution
Project Execution
Project Execution
Project Execution
Project Execution
The success of OZ Minerals’ execution of its
The success of OZ Minerals’ execution of its
The success of OZ Minerals’ execution of its
The success of OZ Minerals’ execution of its
growth strategy is dependent on its ability to
growth strategy is dependent on its ability to
The success of OZ Minerals’ execution of its
growth strategy is dependent on its ability to
The success of OZ Minerals’ execution of its
growth strategy is dependent on its ability to
deliver its projects on time and within budget
growth strategy is dependent on its ability to
deliver its projects on time and within budget
deliver its projects on time and within budget
growth strategy is dependent on its ability to
deliver its projects on time and within budget
and scope.
and scope.
deliver its projects on time and within budget
and scope.
deliver its projects on time and within budget
and scope.
and scope.
and scope.
Contract management
Contract management
Contract management
Contract management
Contract management
Many aspects of the Prominent Hill operations,
Contract management
Many aspects of the Prominent Hill operations,
Many aspects of the Prominent Hill operations,
Many aspects of the Prominent Hill operations,
Carrapateena project and the Company’s
Many aspects of the Prominent Hill operations,
Carrapateena project and the Company’s
Carrapateena project and the Company’s
Many aspects of the Prominent Hill operations,
Carrapateena project and the Company’s
exploration and development activities are
exploration and development activities are
Carrapateena project and the Company’s
exploration and development activities are
Carrapateena project and the Company’s
exploration and development activities are
conducted by contractors.
exploration and development activities are
conducted by contractors.
conducted by contractors.
exploration and development activities are
conducted by contractors.
conducted by contractors.
conducted by contractors.
The company has an active program focused on
the utilisation of trigger action response plans to
maintain the ongoing stability of the open pit
walls. The OZ Minerals maintenance and
engineering team have developed robust
procedures and practices to ensure they are
operating the processing plant with minimal
disruption and at high throughput levels.
Concentrate is transported to Australian
destinations using road and rail and shipped to
overseas destinations from the Port of Adelaide.
The use of customised containers with lids and
rotainers to load concentrate onto ships mitigates
the risk of spillage and impact on the
environment.
Mine development projects are inherently
Mine development projects are inherently
Mine development projects are inherently
Mine development projects are inherently
exposed to risks of scope definition, cost
exposed to risks of scope definition, cost
Mine development projects are inherently
exposed to risks of scope definition, cost
Mine development projects are inherently
exposed to risks of scope definition, cost
estimation accuracy and other environmental
exposed to risks of scope definition, cost
estimation accuracy and other environmental
estimation accuracy and other environmental
exposed to risks of scope definition, cost
estimation accuracy and other environmental
factors that present threats and opportunities to
factors that present threats and opportunities to
estimation accuracy and other environmental
factors that present threats and opportunities to
estimation accuracy and other environmental
factors that present threats and opportunities to
the cost, efficiency and profitability of projects
factors that present threats and opportunities to
the cost, efficiency and profitability of projects
the cost, efficiency and profitability of projects
factors that present threats and opportunities to
the cost, efficiency and profitability of projects
which are not within the control of the company.
which are not within the control of the company.
the cost, efficiency and profitability of projects
which are not within the control of the company.
the cost, efficiency and profitability of projects
which are not within the control of the company.
which are not within the control of the company.
which are not within the control of the company.
The production and capital costs incurred by OZ
The production and capital costs incurred by OZ
The production and capital costs incurred by OZ
The production and capital costs incurred by OZ
Minerals are subject to a variety of factors
The production and capital costs incurred by OZ
Minerals are subject to a variety of factors
Minerals are subject to a variety of factors
The production and capital costs incurred by OZ
Minerals are subject to a variety of factors
including and not limited to: fluctuations in input
including and not limited to: fluctuations in input
Minerals are subject to a variety of factors
including and not limited to: fluctuations in input
Minerals are subject to a variety of factors
including and not limited to: fluctuations in input
costs determined by global markets, for example,
including and not limited to: fluctuations in input
costs determined by global markets, for example,
costs determined by global markets, for example,
including and not limited to: fluctuations in input
costs determined by global markets, for example,
electricity, fuel and other key consumables;
electricity, fuel and other key consumables;
costs determined by global markets, for example,
electricity, fuel and other key consumables;
costs determined by global markets, for example,
electricity, fuel and other key consumables;
changes in economic conditions which impact on
electricity, fuel and other key consumables;
changes in economic conditions which impact on
changes in economic conditions which impact on
electricity, fuel and other key consumables;
changes in economic conditions which impact on
margins required by contracting partners; and
margins required by contracting partners; and
changes in economic conditions which impact on
margins required by contracting partners; and
changes in economic conditions which impact on
margins required by contracting partners; and
changes in mining assumptions such as ore
margins required by contracting partners; and
changes in mining assumptions such as ore
changes in mining assumptions such as ore
margins required by contracting partners; and
changes in mining assumptions such as ore
grades and pit designs.
grades and pit designs.
changes in mining assumptions such as ore
grades and pit designs.
changes in mining assumptions such as ore
grades and pit designs.
grades and pit designs.
grades and pit designs.
OZ Minerals ensures its projects go through a
OZ Minerals ensures its projects go through a
OZ Minerals ensures its projects go through a
OZ Minerals ensures its projects go through a
process of internal and external independent
process of internal and external independent
OZ Minerals ensures its projects go through a
process of internal and external independent
OZ Minerals ensures its projects go through a
process of internal and external independent
review to verify the engineering, technical and
process of internal and external independent
review to verify the engineering, technical and
review to verify the engineering, technical and
process of internal and external independent
review to verify the engineering, technical and
financial scope definitions and other
financial scope definitions and other
review to verify the engineering, technical and
financial scope definitions and other
review to verify the engineering, technical and
financial scope definitions and other
assumptions.
financial scope definitions and other
assumptions.
assumptions.
financial scope definitions and other
assumptions.
assumptions.
Where possible the company, manages cost
assumptions.
Where possible the company, manages cost
Where possible the company, manages cost
Where possible the company, manages cost
creep through sound procurement practices and
Where possible the company, manages cost
creep through sound procurement practices and
creep through sound procurement practices and
Where possible the company, manages cost
creep through sound procurement practices and
governance at the highest levels of
governance at the highest levels of
creep through sound procurement practices and
governance at the highest levels of
creep through sound procurement practices and
governance at the highest levels of
management.
governance at the highest levels of
management.
management.
governance at the highest levels of
management.
management.
management.
OZ Minerals engages with reputable
OZ Minerals engages with reputable
OZ Minerals engages with reputable
OZ Minerals engages with reputable
contractors who have the technical ability,
OZ Minerals engages with reputable
contractors who have the technical ability,
contractors who have the technical ability,
OZ Minerals engages with reputable
contractors who have the technical ability,
proven track record and financial capability to
proven track record and financial capability to
contractors who have the technical ability,
proven track record and financial capability to
contractors who have the technical ability,
proven track record and financial capability to
execute its projects.
proven track record and financial capability to
execute its projects.
execute its projects.
proven track record and financial capability to
execute its projects.
execute its projects.
Competitive procurement processes and
execute its projects.
Competitive procurement processes and
Competitive procurement processes and
Competitive procurement processes and
embedded performance structures in contracts
Competitive procurement processes and
embedded performance structures in contracts
embedded performance structures in contracts
Competitive procurement processes and
embedded performance structures in contracts
ensure that the consolidated entity mitigates its
ensure that the consolidated entity mitigates its
embedded performance structures in contracts
ensure that the consolidated entity mitigates its
embedded performance structures in contracts
ensure that the consolidated entity mitigates its
risks of non-performance by its contractors
ensure that the consolidated entity mitigates its
risks of non-performance by its contractors
risks of non-performance by its contractors
ensure that the consolidated entity mitigates its
risks of non-performance by its contractors
while deriving the highest value to its
while deriving the highest value to its
risks of non-performance by its contractors
while deriving the highest value to its
risks of non-performance by its contractors
while deriving the highest value to its
shareholders.
while deriving the highest value to its
shareholders.
shareholders.
while deriving the highest value to its
shareholders.
shareholders.
The Company’s operational and financial
shareholders.
The Company’s operational and financial
The Company’s operational and financial
The Company’s operational and financial
results are impacted by the performance of
The Company’s operational and financial
results are impacted by the performance of
results are impacted by the performance of
The Company’s operational and financial
results are impacted by the performance of
these contractors, the input costs charged, and
these contractors, the input costs charged, and
results are impacted by the performance of
these contractors, the input costs charged, and
results are impacted by the performance of
these contractors, the input costs charged, and
the associated risks relating to these
these contractors, the input costs charged, and
the associated risks relating to these
the associated risks relating to these
these contractors, the input costs charged, and
the associated risks relating to these
contractors, many of which are outside the
contractors, many of which are outside the
the associated risks relating to these
contractors, many of which are outside the
the associated risks relating to these
contractors, many of which are outside the
control of the Company.
contractors, many of which are outside the
control of the Company.
control of the Company.
contractors, many of which are outside the
control of the Company.
control of the Company.
control of the Company.
OZ Minerals operates programs that monitor
OZ Minerals operates programs that monitor
OZ Minerals operates programs that monitor
OZ Minerals operates programs that monitor
and respond to changes in geotechnical
and respond to changes in geotechnical
OZ Minerals operates programs that monitor
and respond to changes in geotechnical
OZ Minerals operates programs that monitor
and respond to changes in geotechnical
structures in the open pit, underground and
and respond to changes in geotechnical
structures in the open pit, underground and
structures in the open pit, underground and
and respond to changes in geotechnical
structures in the open pit, underground and
tailings storage facility to ensure the safety of
tailings storage facility to ensure the safety of
structures in the open pit, underground and
tailings storage facility to ensure the safety of
structures in the open pit, underground and
tailings storage facility to ensure the safety of
personnel working in the affected areas and
tailings storage facility to ensure the safety of
personnel working in the affected areas and
personnel working in the affected areas and
tailings storage facility to ensure the safety of
personnel working in the affected areas and
where possible activities are undertaken to
where possible activities are undertaken to
personnel working in the affected areas and
where possible activities are undertaken to
personnel working in the affected areas and
where possible activities are undertaken to
reduce the risk of geotechnical failure.
where possible activities are undertaken to
reduce the risk of geotechnical failure.
reduce the risk of geotechnical failure.
where possible activities are undertaken to
reduce the risk of geotechnical failure.
reduce the risk of geotechnical failure.
reduce the risk of geotechnical failure.
The Reserve and Resource estimates and mine
The Reserve and Resource estimates and mine
The Reserve and Resource estimates and mine
The Reserve and Resource estimates and mine
plans have been carefully prepared by the
The Reserve and Resource estimates and mine
plans have been carefully prepared by the
plans have been carefully prepared by the
The Reserve and Resource estimates and mine
plans have been carefully prepared by the
Company in compliance with JORC guidelines
Company in compliance with JORC guidelines
plans have been carefully prepared by the
Company in compliance with JORC guidelines
plans have been carefully prepared by the
Company in compliance with JORC guidelines
and in some instances verified by independent
Company in compliance with JORC guidelines
and in some instances verified by independent
and in some instances verified by independent
Company in compliance with JORC guidelines
and in some instances verified by independent
mining experts or experienced mining
mining experts or experienced mining
and in some instances verified by independent
mining experts or experienced mining
and in some instances verified by independent
mining experts or experienced mining
operators.
mining experts or experienced mining
operators.
operators.
mining experts or experienced mining
operators.
operators.
The estimation of the Company’s reserves and
operators.
The estimation of the Company’s reserves and
The estimation of the Company’s reserves and
The estimation of the Company’s reserves and
resources involves analysis of drilling results,
The estimation of the Company’s reserves and
resources involves analysis of drilling results,
resources involves analysis of drilling results,
The estimation of the Company’s reserves and
resources involves analysis of drilling results,
associated geological and geotechnical
associated geological and geotechnical
resources involves analysis of drilling results,
associated geological and geotechnical
resources involves analysis of drilling results,
associated geological and geotechnical
interpretations, operating cost and business
associated geological and geotechnical
interpretations, operating cost and business
interpretations, operating cost and business
associated geological and geotechnical
interpretations, operating cost and business
assumptions and a reliance on commodity price
assumptions and a reliance on commodity price
interpretations, operating cost and business
assumptions and a reliance on commodity price
interpretations, operating cost and business
assumptions and a reliance on commodity price
and exchange rate assumptions.
assumptions and a reliance on commodity price
and exchange rate assumptions.
and exchange rate assumptions.
assumptions and a reliance on commodity price
and exchange rate assumptions.
and exchange rate assumptions.
The Company’s production plan is based on the
and exchange rate assumptions.
The Company’s production plan is based on the
The Company’s production plan is based on the
The Company’s production plan is based on the
published Reserves and Resources.
The Company’s production plan is based on the
published Reserves and Resources.
published Reserves and Resources.
The Company’s production plan is based on the
published Reserves and Resources.
published Reserves and Resources.
published Reserves and Resources.
45
Geotechnical failure
Geotechnical failure
Geotechnical failure
Geotechnical failure
Geotechnical failure
Geotechnical failure
The open pit and underground mining
The open pit and underground mining
The open pit and underground mining
The open pit and underground mining
operations remain subject to geotechnical
operations remain subject to geotechnical
The open pit and underground mining
operations remain subject to geotechnical
The open pit and underground mining
operations remain subject to geotechnical
uncertainty and adverse weather conditions
operations remain subject to geotechnical
uncertainty and adverse weather conditions
uncertainty and adverse weather conditions
operations remain subject to geotechnical
uncertainty and adverse weather conditions
which may manifest in a pit wall failure or rock
which may manifest in a pit wall failure or rock
uncertainty and adverse weather conditions
which may manifest in a pit wall failure or rock
uncertainty and adverse weather conditions
which may manifest in a pit wall failure or rock
falls, mine collapse, cave-ins or other failures
which may manifest in a pit wall failure or rock
falls, mine collapse, cave-ins or other failures
falls, mine collapse, cave-ins or other failures
which may manifest in a pit wall failure or rock
falls, mine collapse, cave-ins or other failures
to mine infrastructure and reduced productivity.
to mine infrastructure and reduced productivity.
falls, mine collapse, cave-ins or other failures
to mine infrastructure and reduced productivity.
falls, mine collapse, cave-ins or other failures
to mine infrastructure and reduced productivity.
to mine infrastructure and reduced productivity.
to mine infrastructure and reduced productivity.
Estimates of reserves and resources
Estimates of reserves and resources
Estimates of reserves and resources
Estimates of reserves and resources
Estimates of reserves and resources
The assessment of reserves and resources
Estimates of reserves and resources
The assessment of reserves and resources
The assessment of reserves and resources
The assessment of reserves and resources
involves areas of estimation and judgement.
The assessment of reserves and resources
involves areas of estimation and judgement.
involves areas of estimation and judgement.
The assessment of reserves and resources
involves areas of estimation and judgement.
involves areas of estimation and judgement.
involves areas of estimation and judgement.
The depth of the open pit will increase until
The depth of the open pit will increase until
The depth of the open pit will increase until
The depth of the open pit will increase until
mining ceases in 2018 and concurrent mining of
mining ceases in 2018 and concurrent mining of
The depth of the open pit will increase until
mining ceases in 2018 and concurrent mining of
The depth of the open pit will increase until
mining ceases in 2018 and concurrent mining of
multiple underground areas result in increased
mining ceases in 2018 and concurrent mining of
multiple underground areas result in increased
multiple underground areas result in increased
mining ceases in 2018 and concurrent mining of
multiple underground areas result in increased
underground mining activities.
underground mining activities.
multiple underground areas result in increased
underground mining activities.
multiple underground areas result in increased
underground mining activities.
underground mining activities.
underground mining activities.
The preparation of these estimates involves
The preparation of these estimates involves
The preparation of these estimates involves
The preparation of these estimates involves
application of significant judgment and no
The preparation of these estimates involves
application of significant judgment and no
application of significant judgment and no
The preparation of these estimates involves
application of significant judgment and no
assurance of level of recovery of minerals or
assurance of level of recovery of minerals or
application of significant judgment and no
assurance of level of recovery of minerals or
application of significant judgment and no
assurance of level of recovery of minerals or
commercial viability of deposits can be provided.
assurance of level of recovery of minerals or
commercial viability of deposits can be provided.
commercial viability of deposits can be provided.
assurance of level of recovery of minerals or
commercial viability of deposits can be provided.
The Company reviews and publishes its reserves
The Company reviews and publishes its reserves
commercial viability of deposits can be provided.
The Company reviews and publishes its reserves
commercial viability of deposits can be provided.
The Company reviews and publishes its reserves
and resources annually.
The Company reviews and publishes its reserves
and resources annually.
and resources annually.
The Company reviews and publishes its reserves
and resources annually.
and resources annually.
and resources annually.
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Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Context
Context
Context
Customer management
Customer management
OZ Minerals markets a high grade copper
Customer management
OZ Minerals markets a high grade copper
concentrate to overseas and local customers
concentrate to overseas and local customers
OZ Minerals markets a high grade copper
and any disruption to the logistics chain from
and any disruption to the logistics chain from
concentrate to overseas and local customers
production through to delivery to the customer
production through to delivery to the customer
and any disruption to the logistics chain from
can result in significant financial impacts.
can result in significant financial impacts.
production through to delivery to the customer
can result in significant financial impacts.
Risk
Risk
Risk
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Concentrates marketability is dependent on
Concentrates marketability is dependent on
global mine supply, smelter demand, concentrate
global mine supply, smelter demand, concentrate
Concentrates marketability is dependent on
grades and impurities in the product. Prominent
grades and impurities in the product. Prominent
global mine supply, smelter demand, concentrate
Hill concentrate has a high copper grade
Hill concentrate has a high copper grade
grades and impurities in the product. Prominent
containing gold and silver along with fluorine and
containing gold and silver along with fluorine and
Hill concentrate has a high copper grade
uranium impurities.
uranium impurities.
containing gold and silver along with fluorine and
Regulators in various jurisdictions may change
uranium impurities.
Regulators in various jurisdictions may change
limits or approach to assessment guidelines for
limits or approach to assessment guidelines for
Regulators in various jurisdictions may change
impurities in concentrate which can impede the
impurities in concentrate which can impede the
limits or approach to assessment guidelines for
importation of the concentrate into those
importation of the concentrate into those
impurities in concentrate which can impede the
jurisdictions. These changes may result in
jurisdictions. These changes may result in
importation of the concentrate into those
additional requirements related to the ore,
additional requirements related to the ore,
jurisdictions. These changes may result in
tailings or concentrates or result in challenges
tailings or concentrates or result in challenges
additional requirements related to the ore,
with selling, transporting or importing Prominent
with selling, transporting or importing Prominent
tailings or concentrates or result in challenges
Hill concentrates in various jurisdictions.
Hill concentrates in various jurisdictions.
with selling, transporting or importing Prominent
Hill concentrates in various jurisdictions.
OZ Minerals has developed customised
OZ Minerals has developed customised
solutions in partnership with customers to
solutions in partnership with customers to
OZ Minerals has developed customised
match smelter demand and production from the
match smelter demand and production from the
solutions in partnership with customers to
Prominent Hill mine for concentrate grades and
Prominent Hill mine for concentrate grades and
match smelter demand and production from the
timing along with a range of controls to
timing along with a range of controls to
Prominent Hill mine for concentrate grades and
manage the fluorine and uranium impurities.
manage the fluorine and uranium impurities.
timing along with a range of controls to
OZ Minerals has multiple marketing options
manage the fluorine and uranium impurities.
OZ Minerals has multiple marketing options
including but not limited to ore blending,
including but not limited to ore blending,
OZ Minerals has multiple marketing options
concentrates blending and additional flotation
concentrates blending and additional flotation
including but not limited to ore blending,
treatment in the existing plant.
treatment in the existing plant.
concentrates blending and additional flotation
OZ Minerals maintains a diverse customer
treatment in the existing plant.
OZ Minerals maintains a diverse customer
portfolio to mitigate against the risk of
portfolio to mitigate against the risk of
OZ Minerals maintains a diverse customer
regulatory changes to importation
regulatory changes to importation
portfolio to mitigate against the risk of
requirements.
requirements.
regulatory changes to importation
requirements.
Market Risks
Market Risks
Market Risks
Commodity Prices and Exchange rates
Commodity Prices and Exchange rates
Commodity Prices and Exchange rates
OZ Minerals has no influence over the
OZ Minerals has no influence over the
determination of copper, gold and silver prices in
determination of copper, gold and silver prices in
OZ Minerals has no influence over the
the global commodities market or the
the global commodities market or the
determination of copper, gold and silver prices in
Australian/US dollar exchange rates.
Australian/US dollar exchange rates.
the global commodities market or the
Australian/US dollar exchange rates.
SHEC (Safety, Health, Environment, and Community)
SHEC (Safety, Health, Environment, and Community)
SHEC (Safety, Health, Environment, and Community)
Operational safety failures resulting in
Operational safety failures resulting in
Injury or fatality.
Injury or fatality.
Operational safety failures resulting in
Injury or fatality.
OZ Minerals undertakes operations in areas which
OZ Minerals undertakes operations in areas which
may pose a safety risk, including but not limited
may pose a safety risk, including but not limited
OZ Minerals undertakes operations in areas which
to areas such as handling explosives,
to areas such as handling explosives,
may pose a safety risk, including but not limited
underground operations subject to rock fall,
underground operations subject to rock fall,
to areas such as handling explosives,
confined spaces, areas where heavy and light
confined spaces, areas where heavy and light
underground operations subject to rock fall,
vehicles interact, manual handling and operating
vehicles interact, manual handling and operating
confined spaces, areas where heavy and light
at height.
at height.
vehicles interact, manual handling and operating
Operating a fly in fly out operation also
at height.
Operating a fly in fly out operation also
introduces the risk that is inherent in air travel, as
introduces the risk that is inherent in air travel, as
Operating a fly in fly out operation also
contractors and employees are required to
contractors and employees are required to
introduces the risk that is inherent in air travel, as
regularly commute by aircraft.
regularly commute by aircraft.
contractors and employees are required to
regularly commute by aircraft.
28
28
28
The Company’s objective is to fix the copper
The Company’s objective is to fix the copper
price at the time of all concentrate shipments.
price at the time of all concentrate shipments.
The Company’s objective is to fix the copper
This is achieved by entering into copper
This is achieved by entering into copper
price at the time of all concentrate shipments.
derivative contracts that settle at the same time
derivative contracts that settle at the same time
This is achieved by entering into copper
as the contractual quotation period for the
as the contractual quotation period for the
derivative contracts that settle at the same time
shipment.
shipment.
as the contractual quotation period for the
The Company has taken out gold derivative
shipment.
The Company has taken out gold derivative
contracts to fix gold price on some of the gold
contracts to fix gold price on some of the gold
The Company has taken out gold derivative
that it expects to produce and sell from current
that it expects to produce and sell from current
contracts to fix gold price on some of the gold
stockpiles from mid-2018 to 2021.
stockpiles from mid-2018 to 2021.
that it expects to produce and sell from current
The Company’s functional currency is the
stockpiles from mid-2018 to 2021.
The Company’s functional currency is the
Australian dollar which reflects the majority of
Australian dollar which reflects the majority of
The Company’s functional currency is the
its cost base. In January 2016, the Company
its cost base. In January 2016, the Company
Australian dollar which reflects the majority of
determined to maintain Australian dollars with
determined to maintain Australian dollars with
its cost base. In January 2016, the Company
US$ holding maintained only to meet US$
US$ holding maintained only to meet US$
determined to maintain Australian dollars with
commitments.
commitments.
US$ holding maintained only to meet US$
The Company does not take a position on the
commitments.
The Company does not take a position on the
level of the Australian dollar or take active
level of the Australian dollar or take active
The Company does not take a position on the
steps to hedge the currency risk.
steps to hedge the currency risk.
level of the Australian dollar or take active
steps to hedge the currency risk.
OZ Minerals is committed to the safety of its
OZ Minerals is committed to the safety of its
people and all work processes have a high
people and all work processes have a high
OZ Minerals is committed to the safety of its
safety focus.
safety focus.
people and all work processes have a high
OZ Minerals operates in partnership with its
safety focus.
OZ Minerals operates in partnership with its
contractors and is actively building a shared
contractors and is actively building a shared
OZ Minerals operates in partnership with its
safety culture between employees and
safety culture between employees and
contractors and is actively building a shared
contractors working on our sites.
contractors working on our sites.
safety culture between employees and
Active engagement at all levels of operations
contractors working on our sites.
Active engagement at all levels of operations
and senior leadership teams combined with
and senior leadership teams combined with
Active engagement at all levels of operations
activities focused on identifying and eliminating
activities focused on identifying and eliminating
and senior leadership teams combined with
drivers of safety incidents has delivered
drivers of safety incidents has delivered
activities focused on identifying and eliminating
significant successes and resulted in a
significant successes and resulted in a
drivers of safety incidents has delivered
sustained reduction in the severity of injuries.
sustained reduction in the severity of injuries.
significant successes and resulted in a
sustained reduction in the severity of injuries.
Finance
Directors’ Report
Operational and Financial Review
Directors’ Report
Operational and Financial Review
Mitigation/Actions
Mitigation/Actions
Mitigation/Actions
Concentrates marketability is dependent on
Concentrates marketability is dependent on
global mine supply, smelter demand, concentrate
global mine supply, smelter demand, concentrate
Concentrates marketability is dependent on
grades and impurities in the product. Prominent
grades and impurities in the product. Prominent
global mine supply, smelter demand, concentrate
Hill concentrate has a high copper grade
Hill concentrate has a high copper grade
grades and impurities in the product. Prominent
containing gold and silver along with fluorine and
containing gold and silver along with fluorine and
Hill concentrate has a high copper grade
containing gold and silver along with fluorine and
uranium impurities.
uranium impurities.
uranium impurities.
Regulators in various jurisdictions may change
Regulators in various jurisdictions may change
limits or approach to assessment guidelines for
limits or approach to assessment guidelines for
Regulators in various jurisdictions may change
impurities in concentrate which can impede the
impurities in concentrate which can impede the
limits or approach to assessment guidelines for
importation of the concentrate into those
importation of the concentrate into those
impurities in concentrate which can impede the
jurisdictions. These changes may result in
jurisdictions. These changes may result in
importation of the concentrate into those
additional requirements related to the ore,
additional requirements related to the ore,
jurisdictions. These changes may result in
tailings or concentrates or result in challenges
tailings or concentrates or result in challenges
additional requirements related to the ore,
with selling, transporting or importing Prominent
with selling, transporting or importing Prominent
tailings or concentrates or result in challenges
Hill concentrates in various jurisdictions.
Hill concentrates in various jurisdictions.
with selling, transporting or importing Prominent
Hill concentrates in various jurisdictions.
OZ Minerals has developed customised
OZ Minerals has developed customised
solutions in partnership with customers to
solutions in partnership with customers to
OZ Minerals has developed customised
match smelter demand and production from the
match smelter demand and production from the
solutions in partnership with customers to
Prominent Hill mine for concentrate grades and
Prominent Hill mine for concentrate grades and
match smelter demand and production from the
timing along with a range of controls to
timing along with a range of controls to
Prominent Hill mine for concentrate grades and
manage the fluorine and uranium impurities.
manage the fluorine and uranium impurities.
timing along with a range of controls to
OZ Minerals has multiple marketing options
manage the fluorine and uranium impurities.
OZ Minerals has multiple marketing options
including but not limited to ore blending,
including but not limited to ore blending,
OZ Minerals has multiple marketing options
concentrates blending and additional flotation
concentrates blending and additional flotation
including but not limited to ore blending,
treatment in the existing plant.
treatment in the existing plant.
concentrates blending and additional flotation
OZ Minerals maintains a diverse customer
treatment in the existing plant.
OZ Minerals maintains a diverse customer
portfolio to mitigate against the risk of
portfolio to mitigate against the risk of
OZ Minerals maintains a diverse customer
regulatory changes to importation
regulatory changes to importation
portfolio to mitigate against the risk of
requirements.
requirements.
regulatory changes to importation
requirements.
Context
Environmental spills from distribution or
Context
processing activities
Environmental spills from distribution or
The Company operates under a range of
processing activities
environmental regulations and guidelines.
The Company operates under a range of
environmental regulations and guidelines.
Maintenance of community relations and
good title
Maintenance of community relations and
good title
Market Risks
Market Risks
Market Risks
Commodity Prices and Exchange rates
Commodity Prices and Exchange rates
Commodity Prices and Exchange rates
OZ Minerals has no influence over the
OZ Minerals has no influence over the
determination of copper, gold and silver prices in
determination of copper, gold and silver prices in
OZ Minerals has no influence over the
the global commodities market or the
the global commodities market or the
determination of copper, gold and silver prices in
Australian/US dollar exchange rates.
Australian/US dollar exchange rates.
the global commodities market or the
Australian/US dollar exchange rates.
Risk
Risk
Mitigation/Actions
Mitigation/Actions
Environmental regulations and occupational
health and safety guidelines for certain products
and by-products produced or to be produced are
Environmental regulations and occupational
generally becoming more onerous.
health and safety guidelines for certain products
and by-products produced or to be produced are
generally becoming more onerous.
The Company works closely with local
communities particularly the indigenous
communities in South Australia.
The Company works closely with local
communities particularly the indigenous
Located within the ‘green zone’ of the Woomera
communities in South Australia.
Prohibited Area, agreements with the
Commonwealth of Australia govern the terms of
Located within the ‘green zone’ of the Woomera
access.
Prohibited Area, agreements with the
Commonwealth of Australia govern the terms of
Potential development of the Carrapateena
access.
project which requires agreements with local
communities and the indigenous communities.
Potential development of the Carrapateena
project which requires agreements with local
communities and the indigenous communities.
The Company is required to close its operations
and rehabilitate the land affected by the
operation at the conclusion of mining and
The Company is required to close its operations
processing activities.
and rehabilitate the land affected by the
operation at the conclusion of mining and
Estimates of these costs are reflected in
processing activities.
accordance with AASB 137 Provisions,
Contingent Liabilities and Contingent Assets as
Estimates of these costs are reflected in
provisions in the financial statements. In
accordance with AASB 137 Provisions,
estimating these costs, management seek
Contingent Liabilities and Contingent Assets as
external assistance and review where
provisions in the financial statements. In
appropriate.
estimating these costs, management seek
external assistance and review where
However actual closure costs may be higher or
appropriate.
lower than estimated as these are costs to be
incurred following the closure of mining
However actual closure costs may be higher or
operations over a long time period.
lower than estimated as these are costs to be
incurred following the closure of mining
operations over a long time period.
Access and compensation agreements, which
are reviewed and updated from time to time,
are in place with communities affected by
Access and compensation agreements, which
mining activities.
are reviewed and updated from time to time,
are in place with communities affected by
Actively engaging with the traditional owners
mining activities.
of Carrapateena culminating in the partnering
agreement with the Kokatha Aboriginal
Actively engaging with the traditional owners
Corporation.
of Carrapateena culminating in the partnering
agreement with the Kokatha Aboriginal
The Company has controls in place to ensure
Corporation.
compliance with the Deed and relies on good
relations with the Australian Defence
The Company has controls in place to ensure
Department regarding defence operations in
compliance with the Deed and relies on good
the Woomera region and any potential impact
relations with the Australian Defence
that these operations may have on mining
Department regarding defence operations in
operations.
the Woomera region and any potential impact
that these operations may have on mining
The Company also relies on the maintenance of
operations.
good title over the authorisations, permits and
licences which allow it to operate. Loss of good
The Company also relies on the maintenance of
title or access due to challenges instituted by
good title over the authorisations, permits and
issuers of authorisations, permits or licences,
licences which allow it to operate. Loss of good
such as government authorities or land owners
title or access due to challenges instituted by
may result in disruptions to operations.
issuers of authorisations, permits or licences,
such as government authorities or land owners
may result in disruptions to operations.
Business strategies, prospect and likely developments
This report sets out the information on the business strategies and prospects for future financial years and refers to likely developments in OZ Minerals’
Business strategies, prospect and likely developments
operations and the expected results of the operations in future financial years. Information in this report is provided to enable shareholders to make an
This report sets out the information on the business strategies and prospects for future financial years and refers to likely developments in OZ Minerals’
informed assessment about the business strategies and prospects for future financial years of the Consolidated Entity. Detail that could give rise to likely
operations and the expected results of the operations in future financial years. Information in this report is provided to enable shareholders to make an
material detriment to OZ Minerals, for example, information that is commercially sensitive, confidential or could give a third party a commercial advantage has
informed assessment about the business strategies and prospects for future financial years of the Consolidated Entity. Detail that could give rise to likely
not been included.
material detriment to OZ Minerals, for example, information that is commercially sensitive, confidential or could give a third party a commercial advantage has
not been included.
47
29
29
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Operational and Financial Review
Operational and Financial Review
Risk
Risk
Risk
Context
Context
Context
Customer management
Customer management
OZ Minerals markets a high grade copper
Customer management
OZ Minerals markets a high grade copper
concentrate to overseas and local customers
concentrate to overseas and local customers
OZ Minerals markets a high grade copper
and any disruption to the logistics chain from
and any disruption to the logistics chain from
concentrate to overseas and local customers
production through to delivery to the customer
production through to delivery to the customer
and any disruption to the logistics chain from
can result in significant financial impacts.
can result in significant financial impacts.
production through to delivery to the customer
can result in significant financial impacts.
shipment.
shipment.
The Company’s objective is to fix the copper
The Company’s objective is to fix the copper
price at the time of all concentrate shipments.
price at the time of all concentrate shipments.
The Company’s objective is to fix the copper
This is achieved by entering into copper
This is achieved by entering into copper
price at the time of all concentrate shipments.
derivative contracts that settle at the same time
derivative contracts that settle at the same time
This is achieved by entering into copper
as the contractual quotation period for the
as the contractual quotation period for the
derivative contracts that settle at the same time
as the contractual quotation period for the
shipment.
The Company has taken out gold derivative
The Company has taken out gold derivative
contracts to fix gold price on some of the gold
contracts to fix gold price on some of the gold
The Company has taken out gold derivative
that it expects to produce and sell from current
that it expects to produce and sell from current
contracts to fix gold price on some of the gold
stockpiles from mid-2018 to 2021.
stockpiles from mid-2018 to 2021.
that it expects to produce and sell from current
The Company’s functional currency is the
stockpiles from mid-2018 to 2021.
The Company’s functional currency is the
Australian dollar which reflects the majority of
Australian dollar which reflects the majority of
The Company’s functional currency is the
its cost base. In January 2016, the Company
its cost base. In January 2016, the Company
Australian dollar which reflects the majority of
determined to maintain Australian dollars with
determined to maintain Australian dollars with
its cost base. In January 2016, the Company
US$ holding maintained only to meet US$
US$ holding maintained only to meet US$
determined to maintain Australian dollars with
commitments.
commitments.
US$ holding maintained only to meet US$
commitments.
The Company does not take a position on the
The Company does not take a position on the
level of the Australian dollar or take active
level of the Australian dollar or take active
The Company does not take a position on the
steps to hedge the currency risk.
steps to hedge the currency risk.
level of the Australian dollar or take active
steps to hedge the currency risk.
safety focus.
safety focus.
OZ Minerals is committed to the safety of its
OZ Minerals is committed to the safety of its
people and all work processes have a high
people and all work processes have a high
OZ Minerals is committed to the safety of its
people and all work processes have a high
safety focus.
OZ Minerals operates in partnership with its
OZ Minerals operates in partnership with its
contractors and is actively building a shared
contractors and is actively building a shared
OZ Minerals operates in partnership with its
safety culture between employees and
safety culture between employees and
contractors and is actively building a shared
contractors working on our sites.
contractors working on our sites.
safety culture between employees and
Active engagement at all levels of operations
contractors working on our sites.
Active engagement at all levels of operations
and senior leadership teams combined with
and senior leadership teams combined with
Active engagement at all levels of operations
activities focused on identifying and eliminating
activities focused on identifying and eliminating
and senior leadership teams combined with
drivers of safety incidents has delivered
drivers of safety incidents has delivered
activities focused on identifying and eliminating
significant successes and resulted in a
significant successes and resulted in a
drivers of safety incidents has delivered
sustained reduction in the severity of injuries.
sustained reduction in the severity of injuries.
significant successes and resulted in a
sustained reduction in the severity of injuries.
SHEC (Safety, Health, Environment, and Community)
SHEC (Safety, Health, Environment, and Community)
SHEC (Safety, Health, Environment, and Community)
Operational safety failures resulting in
Operational safety failures resulting in
Injury or fatality.
Injury or fatality.
Operational safety failures resulting in
Injury or fatality.
OZ Minerals undertakes operations in areas which
OZ Minerals undertakes operations in areas which
may pose a safety risk, including but not limited
may pose a safety risk, including but not limited
OZ Minerals undertakes operations in areas which
to areas such as handling explosives,
to areas such as handling explosives,
may pose a safety risk, including but not limited
underground operations subject to rock fall,
underground operations subject to rock fall,
to areas such as handling explosives,
confined spaces, areas where heavy and light
confined spaces, areas where heavy and light
underground operations subject to rock fall,
vehicles interact, manual handling and operating
vehicles interact, manual handling and operating
confined spaces, areas where heavy and light
vehicles interact, manual handling and operating
at height.
Operating a fly in fly out operation also
Operating a fly in fly out operation also
introduces the risk that is inherent in air travel, as
introduces the risk that is inherent in air travel, as
Operating a fly in fly out operation also
contractors and employees are required to
contractors and employees are required to
introduces the risk that is inherent in air travel, as
regularly commute by aircraft.
regularly commute by aircraft.
contractors and employees are required to
at height.
at height.
regularly commute by aircraft.
28
28
28
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Remuneration Overview
Remuneration consideration to Executive Key Management Personnel during 2016
For full details of the audited cost to the Company of the remuneration of the Executive Key Management Personnel (‘KMP’), calculated in accordance with
the accounting standards and the Corporations Act 2001, refer to Table 6 of the Remuneration Report.
The unaudited table below includes details of remuneration actually delivered to the Executive KMP for the financial year 2016 and has been prepared to
provide greater transparency to shareholders regarding remuneration outcomes.
s
e
v
i
t
n
e
c
n
I
m
r
e
T
t
r
o
h
S
$
y
r
a
l
a
S
h
s
a
C
$
730,384
671,250
716,860
675,000
495,785
375,900
107,150
79,225
470,874
346,000
–
–
380,542
211,200
–
–
)
a
(
s
e
c
n
a
w
o
l
l
A
d
n
a
s
t
i
f
e
n
e
B
$
–
5,448
–
–
–
–
–
–
)
b
(
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
19,616
33,140
29,215
10,179
19,364
–
18,645
–
s
e
v
i
t
n
e
c
n
I
m
r
e
T
g
n
o
L
$
–
–
–
–
n
o
i
t
a
r
e
n
u
m
e
R
l
a
t
o
T
$
1,421,250
1,430,448
900,900
196,554
836,238
–
610,387
–
Andrew Cole
Managing Director & CEO
Luke Anderson(c)
Chief Financial Officer
Robert Fulker
Chief Operating Officer(d)
Mark Rankmore
Head of Human Resources
& Services(d)
2016
2015
2016
2015
2016
2015
2016
2015
(a) Benefits & Allowances include the value (where applicable) of benefits such as compulsory annual health checks, car parking or other benefits that are available to all employees of OZ Minerals, and are inclusive of
Fringe Benefits Tax where applicable.
(b) Represents direct contributions to superannuation funds. Amounts greater than the maximum superannuation level have been paid and included in cash salary.
(c)
In the comparative period, Mr Anderson was designated as KMP from 12 October 2015.
(d) Was not a KMP during 2015.
30
Finance
Directors’ Report
Remuneration Overview
Remuneration consideration to Executive Key Management Personnel during 2016
For full details of the audited cost to the Company of the remuneration of the Executive Key Management Personnel (‘KMP’), calculated in accordance with
the accounting standards and the Corporations Act 2001, refer to Table 6 of the Remuneration Report.
The unaudited table below includes details of remuneration actually delivered to the Executive KMP for the financial year 2016 and has been prepared to
provide greater transparency to shareholders regarding remuneration outcomes.
s
e
v
i
t
n
e
c
n
I
m
r
e
T
g
n
o
L
$
–
–
–
–
)
a
(
s
e
c
n
a
w
o
l
l
A
d
n
a
s
t
i
f
e
n
e
B
$
–
–
–
–
–
–
–
)
b
(
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
19,616
33,140
29,215
10,179
19,364
–
–
n
o
i
t
a
r
e
n
u
m
e
R
l
a
t
o
T
$
–
–
1,421,250
1,430,448
900,900
196,554
836,238
y
r
a
l
a
S
h
s
a
C
$
–
–
495,785
375,900
107,150
79,225
470,874
346,000
380,542
211,200
18,645
610,387
Andrew Cole
730,384
671,250
Managing Director & CEO
716,860
675,000
5,448
2016
2015
2016
2015
2016
2015
2016
Luke Anderson(c)
Chief Financial Officer
Robert Fulker
Chief Operating Officer(d)
Mark Rankmore
Head of Human Resources
2015
& Services(d)
Fringe Benefits Tax where applicable.
(a) Benefits & Allowances include the value (where applicable) of benefits such as compulsory annual health checks, car parking or other benefits that are available to all employees of OZ Minerals, and are inclusive of
(b) Represents direct contributions to superannuation funds. Amounts greater than the maximum superannuation level have been paid and included in cash salary.
(c)
In the comparative period, Mr Anderson was designated as KMP from 12 October 2015.
(d) Was not a KMP during 2015.
s
e
v
i
t
n
e
c
n
I
m
r
e
T
t
r
o
h
S
$
–
–
30
49
Annual and Sustainability Report 2016
Letter from the Chairman of the Human
Letter from the Chairman of the Human
Letter from the Chairman of the Human
Letter from the Chairman of the Human
Resources and Remuneration Committee
Resources and Remuneration Committee
Resources and Remuneration Committee
Resources and Remuneration Committee
Dear Shareholders,
Dear Shareholders,
Dear Shareholders,
On behalf of the Board of Directors, we are pleased to provide you with OZ Minerals 2016 Remuneration Report.
On behalf of the Board of Directors, we are pleased to provide you with OZ Minerals 2016 Remuneration Report.
On behalf of the Board of Directors, we are pleased to provide you with OZ Minerals 2016 Remuneration Report.
This year has seen strong, consistent performance for OZ Minerals (Company) and our longer term ambitions as a modern mining company. The success of the
This year has seen strong, consistent performance for OZ Minerals (Company) and our longer term ambitions as a modern mining company. The success of the
This year has seen strong, consistent performance for OZ Minerals (Company) and our longer term ambitions as a modern mining company. The success of the
Directors’ Report
business and results achieved are a direct result of the combined efforts of all staff and key stakeholders. OZ Minerals believe it is critically important to align
business and results achieved are a direct result of the combined efforts of all staff and key stakeholders. OZ Minerals believe it is critically important to align
business and results achieved are a direct result of the combined efforts of all staff and key stakeholders. OZ Minerals believe it is critically important to align
performance outcomes and contribution of our Executives through competitive remuneration and transparent processes that reflect both individual and
performance outcomes and contribution of our Executives through competitive remuneration and transparent processes that reflect both individual and
performance outcomes and contribution of our Executives through competitive remuneration and transparent processes that reflect both individual and
Directors’ Report
Company performance and that create an ongoing interest in the Company.
Company performance and that create an ongoing interest in the Company.
Company performance and that create an ongoing interest in the Company.
Directors’ Report
OZ Minerals Performance
OZ Minerals Performance
OZ Minerals Performance
Directors’ Report
During the year, significant progress was made on the strategy. The Company delivered improved safety and production performance, strong cost
During the year, significant progress was made on the strategy. The Company delivered improved safety and production performance, strong cost
During the year, significant progress was made on the strategy. The Company delivered improved safety and production performance, strong cost
Directors’ Report
management and again demonstrated practical remuneration outcomes aligned with the creation of shareholder value.
management and again demonstrated practical remuneration outcomes aligned with the creation of shareholder value.
management and again demonstrated practical remuneration outcomes aligned with the creation of shareholder value.
Directors’ Report
The consistent focus at Prominent Hill has delivered a long life, low cost mining operation that will underpin the future growth agenda of the Company.
The consistent focus at Prominent Hill has delivered a long life, low cost mining operation that will underpin the future growth agenda of the Company.
The consistent focus at Prominent Hill has delivered a long life, low cost mining operation that will underpin the future growth agenda of the Company.
Particularly pleasing was the positive response from the Prominent Hill teams despite some of the various production interruptions that were safely managed
Particularly pleasing was the positive response from the Prominent Hill teams despite some of the various production interruptions that were safely managed
Particularly pleasing was the positive response from the Prominent Hill teams despite some of the various production interruptions that were safely managed
throughout the year.
throughout the year.
throughout the year.
The Carrapateena project team delivered the PFS, commenced construction of the underground access decline, progressed various approvals and community
The Carrapateena project team delivered the PFS, commenced construction of the underground access decline, progressed various approvals and community
The Carrapateena project team delivered the PFS, commenced construction of the underground access decline, progressed various approvals and community
Operational and Financial Review
consultation and importantly signed a landmark Partnering Agreement with the Kokatha People, the traditional owners of the land where Carrapateena is
consultation and importantly signed a landmark Partnering Agreement with the Kokatha People, the traditional owners of the land where Carrapateena is
consultation and importantly signed a landmark Partnering Agreement with the Kokatha People, the traditional owners of the land where Carrapateena is
Operational and Financial Review
situated.
situated.
situated.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Directors’ Report
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
The Exploration and Growth teams signed five new exploration earn-in agreements, focusing on a range of highly prospective targets across South Australia,
The Exploration and Growth teams signed five new exploration earn-in agreements, focusing on a range of highly prospective targets across South Australia,
The Exploration and Growth teams signed five new exploration earn-in agreements, focusing on a range of highly prospective targets across South Australia,
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
Operational and Financial Review
Western Australia and Queensland. The decision was taken to withdraw from the Jamaica venture and significant progress was made in building a pipeline of
Western Australia and Queensland. The decision was taken to withdraw from the Jamaica venture and significant progress was made in building a pipeline of
Western Australia and Queensland. The decision was taken to withdraw from the Jamaica venture and significant progress was made in building a pipeline of
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Directors’ Report
other potential operating assets for growth.
other potential operating assets for growth.
other potential operating assets for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
The Company progressed a number of important initiatives to simplify our operating business model to set OZ Minerals up for future success, implemented a
The Company progressed a number of important initiatives to simplify our operating business model to set OZ Minerals up for future success, implemented a
The Company progressed a number of important initiatives to simplify our operating business model to set OZ Minerals up for future success, implemented a
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
range of new technology and systems and continued to provide people with clearer information about the strategy and expected behaviours for both leaders
range of new technology and systems and continued to provide people with clearer information about the strategy and expected behaviours for both leaders
range of new technology and systems and continued to provide people with clearer information about the strategy and expected behaviours for both leaders
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
Directors’ Report
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
and employees.
and employees.
and employees.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Directors’ Report
These important actions contributed to the achievement of the following key outcomes:
These important actions contributed to the achievement of the following key outcomes:
These important actions contributed to the achievement of the following key outcomes:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Underlying EBITDA of $373.8 million (2015: $434.9 million)
• Underlying EBITDA of $373.8 million (2015: $434.9 million)
• Underlying EBITDA of $373.8 million (2015: $434.9 million)
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Operating Cash flow of $324.1 million (2015: $429.8 million)
• Operating Cash flow of $324.1 million (2015: $429.8 million)
• Operating Cash flow of $324.1 million (2015: $429.8 million)
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Operational and Financial Review
• Year-end cash balance of $655.7 million (2015: $552.5 million)
• Year-end cash balance of $655.7 million (2015: $552.5 million)
• Year-end cash balance of $655.7 million (2015: $552.5 million)
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Dividends paid $60.6 million (2015: $18.2 million)
• Dividends paid $60.6 million (2015: $18.2 million)
• Dividends paid $60.6 million (2015: $18.2 million)
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Share Price growth of 94.8%
• Share Price growth of 94.8%
• Share Price growth of 94.8%
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
positioned for growth.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the project is currently underway with a number of milestones achieved in 2016:
• Share buy-back $29.9 million
• Share buy-back $29.9 million
• Share buy-back $29.9 million
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
positioned for growth.
Remuneration Outcomes in 2016
Remuneration Outcomes in 2016
Remuneration Outcomes in 2016
copper deposits at Carrapateena.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
In 2016, the Human Resources and Remuneration Committee (Committee) continued to ensure Executive remuneration at OZ Minerals maintains strong
In 2016, the Human Resources and Remuneration Committee (Committee) continued to ensure Executive remuneration at OZ Minerals maintains strong
In 2016, the Human Resources and Remuneration Committee (Committee) continued to ensure Executive remuneration at OZ Minerals maintains strong
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the project is currently underway with a number of milestones achieved in 2016:
copper deposits at Carrapateena.
• Successful completion of the PFS with robust financials and short payback period;
alignment with shareholder interests, that remuneration remains market competitive, easy to understand and can be clearly communicated to shareholders.
alignment with shareholder interests, that remuneration remains market competitive, easy to understand and can be clearly communicated to shareholders.
alignment with shareholder interests, that remuneration remains market competitive, easy to understand and can be clearly communicated to shareholders.
• Construction commenced on the Tjati decline; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
positioned for growth.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
commitment to operating discipline. Highlights for Prominent Hill were:
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Some of the key outcomes in 2016 include:
Some of the key outcomes in 2016 include:
Some of the key outcomes in 2016 include:
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• As a result of the strong performance in 2016, the Board (with the support of the Committee) has determined to make available 89.5% of the maximum
• As a result of the strong performance in 2016, the Board (with the support of the Committee) has determined to make available 89.5% of the maximum
• As a result of the strong performance in 2016, the Board (with the support of the Committee) has determined to make available 89.5% of the maximum
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Copper guidance achieved for 2016 and for the second consecutive year;
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
positioned for growth.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
copper deposits at Carrapateena.
commitment to operating discipline. Highlights for Prominent Hill were:
annual Short Term Incentive opportunity to the Managing Director & Chief Executive Officer.
annual Short Term Incentive opportunity to the Managing Director & Chief Executive Officer.
annual Short Term Incentive opportunity to the Managing Director & Chief Executive Officer.
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• An additional performance hurdle was implemented for the 2016 Long Term Incentive (LTI) plan to further align interests of shareholders and Executive
• An additional performance hurdle was implemented for the 2016 Long Term Incentive (LTI) plan to further align interests of shareholders and Executive
• An additional performance hurdle was implemented for the 2016 Long Term Incentive (LTI) plan to further align interests of shareholders and Executive
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
copper deposits at Carrapateena.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Construction commenced on the Tjati decline; and
Management. This component targeted a 20% increase in absolute share price over the 3-year performance period on a cliff vesting basis. This change
Management. This component targeted a 20% increase in absolute share price over the 3-year performance period on a cliff vesting basis. This change
Management. This component targeted a 20% increase in absolute share price over the 3-year performance period on a cliff vesting basis. This change
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
commitment to operating discipline. Highlights for Prominent Hill were:
was communicated to shareholders in the 2015 Remuneration Report.
was communicated to shareholders in the 2015 Remuneration Report.
was communicated to shareholders in the 2015 Remuneration Report.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
companies which provides exploration expertise in specific geologies and locations.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Remuneration policy and structure for Executives who are members of the key management personnel of the Company (Executive KMP) was expanded in
• Remuneration policy and structure for Executives who are members of the key management personnel of the Company (Executive KMP) was expanded in
• Remuneration policy and structure for Executives who are members of the key management personnel of the Company (Executive KMP) was expanded in
location of the facility.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
commitment to operating discipline. Highlights for Prominent Hill were:
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• When considering the context of the wider mining sector and the comparative position of salaries in OZ Minerals as compared to market, the Committee
• When considering the context of the wider mining sector and the comparative position of salaries in OZ Minerals as compared to market, the Committee
• When considering the context of the wider mining sector and the comparative position of salaries in OZ Minerals as compared to market, the Committee
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Australian and Northern Territory borders.
• Successful completion of the PFS with robust financials and short payback period;
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
determined not to award salary increases during the 2016 period and will continue to hold salaries at current levels for 2017 across the Company.
determined not to award salary increases during the 2016 period and will continue to hold salaries at current levels for 2017 across the Company.
determined not to award salary increases during the 2016 period and will continue to hold salaries at current levels for 2017 across the Company.
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
of the project is currently underway with a number of milestones achieved in 2016:
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Australian and Northern Territory borders.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Construction commenced on the Tjati decline; and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
• Successful completion of the PFS with robust financials and short payback period;
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Australian and Northern Territory borders.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Construction commenced on the Tjati decline; and
of the project is currently underway with a number of milestones achieved in 2016:
Australian and Northern Territory borders.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Successful completion of the PFS with robust financials and short payback period;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Australian and Northern Territory borders.
31
31
31
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of the project is currently underway with a number of milestones achieved in 2016:
location of the facility.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
2016 to include additional Executives who have significant responsibility for the Company’s leadership, strategy and direction.
2016 to include additional Executives who have significant responsibility for the Company’s leadership, strategy and direction.
2016 to include additional Executives who have significant responsibility for the Company’s leadership, strategy and direction.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
• Construction commenced on the Tjati decline; and
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
Australian and Northern Territory borders.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
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Directors’ Report
Operational and Financial Review
Letter from the Chairman of the Human Resources and Remuneration Committee
Letter from the Chairman of the Human Resources and Remuneration Committee
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
commitment to operating discipline. Highlights for Prominent Hill were:
Developments for Remuneration in 2017 and beyond
Developments for Remuneration in 2017 and beyond
• Following review and external benchmarking of the Managing Director & Chief Executive Officer’s remuneration levels during the year the Board (with
• Following review and external benchmarking of the Managing Director & Chief Executive Officer’s remuneration levels during the year the Board (with
• Copper guidance achieved for 2016 and for the second consecutive year;
support of the Committee), determined to increase the LTI component of Mr Cole's remuneration package to a maximum opportunity of 150% of Total
support of the Committee), determined to increase the LTI component of Mr Cole's remuneration package to a maximum opportunity of 150% of Total
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Fixed Remuneration, increased from 100%, subject to shareholder approval at the 2017 Annual General Meeting. This change, effective from 2017,
Fixed Remuneration, increased from 100%, subject to shareholder approval at the 2017 Annual General Meeting. This change, effective from 2017,
further aligns the at risk component of his remuneration package to shareholder interests and ensures his remuneration is competitive with industry peers.
further aligns the at risk component of his remuneration package to shareholder interests and ensures his remuneration is competitive with industry peers.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
The Committee and Board of Directors are determined to continue its focus on the longer-term strategy of the business and delivering consistent, well aligned
The Committee and Board of Directors are determined to continue its focus on the longer-term strategy of the business and delivering consistent, well aligned
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
and transparent remuneration outcomes.
and transparent remuneration outcomes.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
Thank you for your ongoing support of OZ Minerals.
Thank you for your ongoing support of OZ Minerals.
• Successful completion of the PFS with robust financials and short payback period;
Yours Sincerely
Yours Sincerely
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Rebecca McGrath
Rebecca McGrath
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Chairman Human Resources & Remuneration Committee
Chairman Human Resources & Remuneration Committee
Australian and Northern Territory borders.
Melbourne
Melbourne
23 February 2017
23 February 2017
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Annual and Sustainability Report 2016
Remuneration Report
Remuneration Report
The Directors of OZ Minerals Limited present the Remuneration Report for the Company and the Consolidated Entity for the year ended 31 December 2016. This
Remuneration Report forms part of the Directors’ Report and has been audited in accordance with the Corporations Act 2001.
1. Details of Key Management Personnel
The Consolidated Entity’s KMP during 2016 are listed in Table 1 below, and consist of the Non-executive Directors (‘NEDs’), and the Executive KMP who are
accountable for planning, directing and controlling the affairs of the Company and its controlled entities.
Table 1 - KMP during 2016
Name
Executive KMP
Current
Andrew Cole
Luke Anderson
Robert Fulker(a)
Mark Rankmore(a)
Non-executive Directors
Current
Neil Hamilton
Julie Beeby
Paul Dowd
Charles Lenegan
Rebecca McGrath
Former
Dean Pritchard
Position
Period as KMP during the year
Managing Director & CEO
Chief Financial Officer
Chief Operating Officer
Head of Human Resources & Services
All of 2016
All of 2016
All of 2016
All of 2016
Independent Chairman
All of 2016
Independent NED
Independent NED
Independent NED
Independent NED
Appointed 19 April 2016
All of 2016
All of 2016
All of 2016
Independent NED
Retired 24 May 2016
(a) Mr Fulker and Mr Rankmore were designated as KMP as at 1 January 2016 following the review of KMP roles.
2. Remuneration policy
2.1
Overview of remuneration policy and practices
The remuneration policy outlined below demonstrates the linkage between remuneration and business strategies and the impact that those imperatives have on
the actual remuneration arrangements of the Company. The overriding business objective is to achieve superior returns compared to the Company’s peers in the
resources sector. The Company’s remuneration policy is underpinned by the following guidelines:
33
Remuneration Report
Remuneration Report
Remuneration Report
Box 1 – Remuneration principles
Box 1 – Remuneration principles
Box 1 – Remuneration principles
Business needs and
Business needs and
Business needs and
market alignment
market alignment
market alignment
OZ Minerals remuneration policy is focused on the achievement of our corporate objectives. Remuneration is set having regard
OZ Minerals remuneration policy is focused on the achievement of our corporate objectives. Remuneration is set having regard
OZ Minerals remuneration policy is focused on the achievement of our corporate objectives. Remuneration is set having regard
to market practices and aligned with the achievement of returns to our shareholders.
to market practices and aligned with the achievement of returns to our shareholders.
to market practices and aligned with the achievement of returns to our shareholders.
Simplicity and equity
Simplicity and equity
Simplicity and equity
OZ Minerals remuneration philosophy, policy, principles and structures are simple to understand, communicate and implement,
OZ Minerals remuneration philosophy, policy, principles and structures are simple to understand, communicate and implement,
OZ Minerals remuneration philosophy, policy, principles and structures are simple to understand, communicate and implement,
and are equitable across the Company and its diverse workforce.
and are equitable across the Company and its diverse workforce.
and are equitable across the Company and its diverse workforce.
Performance and reward
Performance and reward
Performance and reward
linkages
linkages
linkages
Directors’ Report
Directors’ Report
Market positioning and
Market positioning and
Market positioning and
remuneration mix
remuneration mix
remuneration mix
Directors’ Report
Talent management
Talent management
Talent management
Directors’ Report
Governance, transparency
Governance, transparency
Governance, transparency
and communication with
and communication with
and communication with
shareholders
shareholders
shareholders
Well-designed remuneration policy supports and drives Company and team performance and encourages the demonstration of
Well-designed remuneration policy supports and drives Company and team performance and encourages the demonstration of
Well-designed remuneration policy supports and drives Company and team performance and encourages the demonstration of
desired behaviours. Performance measures and targets are few in number, outcome-focused and customised at an individual
desired behaviours. Performance measures and targets are few in number, outcome-focused and customised at an individual
desired behaviours. Performance measures and targets are few in number, outcome-focused and customised at an individual
level to maximise performance, accountability and reward linkages.
level to maximise performance, accountability and reward linkages.
level to maximise performance, accountability and reward linkages.
The mix of remuneration is an important aspect of OZ Minerals remuneration policy. Fixed remuneration is set at a competitive
The mix of remuneration is an important aspect of OZ Minerals remuneration policy. Fixed remuneration is set at a competitive
The mix of remuneration is an important aspect of OZ Minerals remuneration policy. Fixed remuneration is set at a competitive
level, positioned to have regard to the challenges of attracting and retaining high performers in business critical roles,
level, positioned to have regard to the challenges of attracting and retaining high performers in business critical roles,
level, positioned to have regard to the challenges of attracting and retaining high performers in business critical roles,
particularly in the mining industry. The at-risk components of remuneration are dependent on challenging goals and focused on
particularly in the mining industry. The at-risk components of remuneration are dependent on challenging goals and focused on
particularly in the mining industry. The at-risk components of remuneration are dependent on challenging goals and focused on
incentivising Executive KMP in achieving business critical objectives and returns to shareholders.
incentivising Executive KMP in achieving business critical objectives and returns to shareholders.
incentivising Executive KMP in achieving business critical objectives and returns to shareholders.
Remuneration policy is tightly linked with the performance and talent management frameworks in order to reward and recognise
Remuneration policy is tightly linked with the performance and talent management frameworks in order to reward and recognise
Remuneration policy is tightly linked with the performance and talent management frameworks in order to reward and recognise
the achievement of role accountabilities and to support the engagement of future leaders.
the achievement of role accountabilities and to support the engagement of future leaders.
the achievement of role accountabilities and to support the engagement of future leaders.
OZ Minerals is committed to developing and maintaining remuneration policy and practices that are targeted at the achievement
OZ Minerals is committed to developing and maintaining remuneration policy and practices that are targeted at the achievement
OZ Minerals is committed to developing and maintaining remuneration policy and practices that are targeted at the achievement
of corporate objectives and the maximisation of shareholder value. It will openly communicate this to shareholders and other
of corporate objectives and the maximisation of shareholder value. It will openly communicate this to shareholders and other
of corporate objectives and the maximisation of shareholder value. It will openly communicate this to shareholders and other
relevant stakeholders, and will always be within the boundaries of legal, regulatory and industrial requirements. The Board has
relevant stakeholders, and will always be within the boundaries of legal, regulatory and industrial requirements. The Board has
relevant stakeholders, and will always be within the boundaries of legal, regulatory and industrial requirements. The Board has
absolute discretion in the development, implementation and review of the key aspects of remuneration.
absolute discretion in the development, implementation and review of the key aspects of remuneration.
absolute discretion in the development, implementation and review of the key aspects of remuneration.
consultant;
consultant;
consultant;
Operational and Financial Review
Operational and Financial Review
2.2
2.2
Use of Remuneration Consultants
Use of Remuneration Consultants
2.2
Use of Remuneration Consultants
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
The Board and Human Resources and Remuneration Committee seek and consider advice from independent remuneration consultants to ensure that they have
The Board and Human Resources and Remuneration Committee seek and consider advice from independent remuneration consultants to ensure that they have
The Board and Human Resources and Remuneration Committee seek and consider advice from independent remuneration consultants to ensure that they have
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
at their disposal information relevant to the determination of all aspects of remuneration relating to the Executive KMP. The engagement of remuneration
at their disposal information relevant to the determination of all aspects of remuneration relating to the Executive KMP. The engagement of remuneration
at their disposal information relevant to the determination of all aspects of remuneration relating to the Executive KMP. The engagement of remuneration
Operational and Financial Review
positioned for growth.
consultants is governed by internal protocols which set the parameters around the interaction between management and the consultants (‘Protocols’) with a
consultants is governed by internal protocols which set the parameters around the interaction between management and the consultants (‘Protocols’) with a
consultants is governed by internal protocols which set the parameters around the interaction between management and the consultants (‘Protocols’) with a
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
view to minimising the risk of any undue influence occurring and ensuring compliance with the requirements of the Corporations Act 2001.
view to minimising the risk of any undue influence occurring and ensuring compliance with the requirements of the Corporations Act 2001.
view to minimising the risk of any undue influence occurring and ensuring compliance with the requirements of the Corporations Act 2001.
Operational and Financial Review
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Protocols
Protocols
Protocols
positioned for growth.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Under the Protocols adopted by the Board and Human Resources and Remuneration Committee:
Under the Protocols adopted by the Board and Human Resources and Remuneration Committee:
Under the Protocols adopted by the Board and Human Resources and Remuneration Committee:
positioned for growth.
copper deposits at Carrapateena.
• remuneration consultants are engaged by and report directly to the Board or the Human Resources and Remuneration Committee;
• remuneration consultants are engaged by and report directly to the Board or the Human Resources and Remuneration Committee;
• remuneration consultants are engaged by and report directly to the Board or the Human Resources and Remuneration Committee;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• the Committee must in deciding whether to approve the engagement have regard to any potential conflicts of interest including factors that may
• the Committee must in deciding whether to approve the engagement have regard to any potential conflicts of interest including factors that may
• the Committee must in deciding whether to approve the engagement have regard to any potential conflicts of interest including factors that may
• Copper guidance achieved for 2016 and for the second consecutive year;
copper deposits at Carrapateena.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
influence independence such as previous and future work performed by the Committee and any relationships that exist between any Executive KMP and
influence independence such as previous and future work performed by the Committee and any relationships that exist between any Executive KMP and
influence independence such as previous and future work performed by the Committee and any relationships that exist between any Executive KMP and
commitment to operating discipline. Highlights for Prominent Hill were:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
the consultant;
the consultant;
the consultant;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• communication between the remuneration consultants and Executive KMP is restricted to minimise the risk of undue influence on the remuneration
• communication between the remuneration consultants and Executive KMP is restricted to minimise the risk of undue influence on the remuneration
• communication between the remuneration consultants and Executive KMP is restricted to minimise the risk of undue influence on the remuneration
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• where the consultant is also engaged to perform work that does not involve the provision of remuneration information, prior approval of the Board or
• where the consultant is also engaged to perform work that does not involve the provision of remuneration information, prior approval of the Board or
• where the consultant is also engaged to perform work that does not involve the provision of remuneration information, prior approval of the Board or
• Copper guidance achieved for 2016 and for the second consecutive year;
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Human Resources and Remuneration Committee must be obtained in certain circumstances where the consultant continues to be engaged to provide
Human Resources and Remuneration Committee must be obtained in certain circumstances where the consultant continues to be engaged to provide
Human Resources and Remuneration Committee must be obtained in certain circumstances where the consultant continues to be engaged to provide
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the project is currently underway with a number of milestones achieved in 2016:
remuneration information.
remuneration information.
remuneration information.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Successful completion of the PFS with robust financials and short payback period;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Successful completion of the PFS with robust financials and short payback period;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
The advice and recommendations of remuneration consultants are used from time to time as a guide by the Board and the Human Resources and Remuneration
The advice and recommendations of remuneration consultants are used from time to time as a guide by the Board and the Human Resources and Remuneration
The advice and recommendations of remuneration consultants are used from time to time as a guide by the Board and the Human Resources and Remuneration
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
Committee. Decisions are made by the Board after its own consideration of the issues but having regard to the advice of the Human Resources and
Committee. Decisions are made by the Board after its own consideration of the issues but having regard to the advice of the Human Resources and
Committee. Decisions are made by the Board after its own consideration of the issues but having regard to the advice of the Human Resources and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Remuneration Committee and the consultants.
Remuneration Committee and the consultants.
Remuneration Committee and the consultants.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
of the project is currently underway with a number of milestones achieved in 2016:
In 2016, the Committee engaged Egan Associates to provide benchmarking data with regard to the remuneration package of the Managing Director & Chief
In 2016, the Committee engaged Egan Associates to provide benchmarking data with regard to the remuneration package of the Managing Director & Chief
In 2016, the Committee engaged Egan Associates to provide benchmarking data with regard to the remuneration package of the Managing Director & Chief
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Construction commenced on the Tjati decline; and
Executive Officer. The Board was satisfied that the protocols described above were followed and therefore the remuneration information provided was made
Executive Officer. The Board was satisfied that the protocols described above were followed and therefore the remuneration information provided was made
Executive Officer. The Board was satisfied that the protocols described above were followed and therefore the remuneration information provided was made
• Successful completion of the PFS with robust financials and short payback period;
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
free from undue influence by members of the KMP. Egan Associates fees for these services were $8,050 (including GST).
free from undue influence by members of the KMP. Egan Associates fees for these services were $8,050 (including GST).
free from undue influence by members of the KMP. Egan Associates fees for these services were $8,050 (including GST).
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
location of the facility.
• Construction commenced on the Tjati decline; and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
location of the facility.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
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companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
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Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
Remuneration Report
Directors’ Report
Remuneration Report
Remuneration Report
Operational and Financial Review
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
2.3
2.3
Review of Executive KMP remuneration
Review of Executive KMP remuneration
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
To ensure that Executive KMP remuneration remains consistent with the Company’s remuneration policy and guiding principles, Executive KMP remuneration
To ensure that Executive KMP remuneration remains consistent with the Company’s remuneration policy and guiding principles, Executive KMP remuneration
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
levels are reviewed annually by the Board with the assistance of the Human Resources & Remuneration Committee and as required, external remuneration
levels are reviewed annually by the Board with the assistance of the Human Resources & Remuneration Committee and as required, external remuneration
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
consultants. In conducting the remuneration review the Board considers:
consultants. In conducting the remuneration review the Board considers:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• the Company’s remuneration policy and practices;
• the Company’s remuneration policy and practices;
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
• relevant market benchmarks using salary survey data from the Australian Industrials and Resources sectors;
• relevant market benchmarks using salary survey data from the Australian Industrials and Resources sectors;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• the core skills and experience required of each role in order to grade positions accurately and attract high calibre people;
• the core skills and experience required of each role in order to grade positions accurately and attract high calibre people;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• individual performance against role expectation, set objectives, leadership behaviours and development plans; and
• individual performance against role expectation, set objectives, leadership behaviours and development plans; and
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• strategy, business plans and budgets.
• strategy, business plans and budgets.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
2.4
Components of Executive KMP remuneration
2.4
Components of Executive KMP remuneration
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Box 2 – Remuneration mix
Box 2 – Remuneration mix
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Total fixed remuneration (TFR)
Total fixed remuneration (TFR)
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Short Term Incentive (STI)
Short Term Incentive (STI)
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
STI
The equity component of the at-risk reward
The equity component of the at-risk reward
Variable, performance based, annual cash
Regular base reward that reflects the job size,
Regular base reward that reflects the job size,
Variable, performance based, annual cash
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
opportunity, linked to the Company’s medium
opportunity, linked to the Company’s medium
incentive plan designed to reward high
role, responsibilities and professional competence
role, responsibilities and professional competence
incentive plan designed to reward high
STI
TFR
Head of Human Resources &
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
to long term TSR and share price performance.
to long term TSR and share price performance.
performance against challenging, clearly defined
of each executive, according to their knowledge,
of each executive, according to their knowledge,
performance against challenging, clearly defined
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Head of Human Resources &
Services
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
Three-year performance period.
and measurable objectives that are based on a
experience and accountabilities and considering
experience and accountabilities and considering
Three-year performance period.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
and measurable objectives that are based on a
30.4%
Chief Operating Officer
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Services
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
mixture of targets and are set to incentivise
external market relativities
external market relativities
mixture of targets and are set to incentivise
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
33.3%
Chief Operating Officer
Chief Financial Officer
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
superior performance, with specific targets or
superior performance, with specific targets or
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
33.3%
Chief Financial Officer
Managing Director & CEO
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
metrics in each category
metrics in each category
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
33.3%
Managing Director & CEO
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The mix of fixed and at-risk remuneration varies depending on the role and grading of executives, and also depends on the performance of the Company and
The mix of fixed and at-risk remuneration varies depending on the role and grading of executives, and also depends on the performance of the Company and
Australian and Northern Territory borders.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
individual executives. More senior positions have a greater proportion of at risk remuneration. If maximum at-risk remuneration is earned, the ratio percentage
individual executives. More senior positions have a greater proportion of at risk remuneration. If maximum at-risk remuneration is earned, the ratio percentage
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
of fixed to at-risk remuneration would be as follows:
of fixed to at-risk remuneration would be as follows:
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
2016 Executive KMP Remuneration Mix
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
LTI
2016 Executive KMP Remuneration Mix
2016 Executive KMP Remuneration Mix
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Series2
Series2
2016 Executive KMP Remuneration Mix
2016 Executive KMP Remuneration Mix
LTI
Australian and Northern Territory borders.
To resize chart data range, drag lower right corner of range.
To resize chart data range, drag lower right corner of range.
26.1%
29.6%
29.6%
33.3%
43.5%
37.1%
37.1%
33.4%
30.4%
33.3%
33.3%
33.3%
43.5%
37.1%
37.1%
33.4%
26.1%
29.6%
29.6%
33.3%
Long Term Incentive (LTI)
Long Term Incentive (LTI)
At-risk remuneration
At-risk remuneration
TFR
LTI
LTI
TFR
TFR
STI
Series1
Series1
STI
Series3
Series3
4
4
3
3
Managing Director & CEO
Managing Director & CEO
33.4%
33.4%
Chief Financial Officer
Chief Financial Officer
37.1%
37.1%
Chief Operating Officer
Chief Operating Officer
2
2
Head of Human Resources & Services
37.1%
37.1%
Head of Human Resources & Services
43.5%
43.5%
1
1
33.4%
33.4%
37.1%
37.1%
37.1%
37.1%
43.5%
43.5%
33.3%
33.3%
29.6%
29.6%
29.6%
29.6%
33.3%
33.3%
29.6%
29.6%
29.6%
29.6%
26.1%
26.1%
26.1%
26.1%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
33.3%
30.4%
30.4%
30.4%
30.4%
12
12
12
12
12
35
35
Remuneration Report
Box 3 - Questions and answers about Executive KMP remuneration
Total fixed remuneration (‘TFR’)
What is included in total
fixed remuneration?
An Executive KMP’s total fixed remuneration comprises salary and certain other benefits (including statutory superannuation
contributions) that may be taken in an agreed form, including cash, leased motor vehicles and additional superannuation, provided
that no extra cost is incurred by the Company for these benefits.
When and how is fixed
remuneration reviewed?
Fixed remuneration is reviewed annually. Any adjustments to the fixed remuneration for the Managing Director & CEO and the other
Executive KMP must be approved by the Board after recommendation by the Human Resources and Remuneration Committee. The
Company seeks to position the fixed remuneration at between the 50th and 75th percentile or higher for business critical roles of
salaries for comparable companies within the mining market and where appropriate, the broader general industry market.
Short Term Incentive (‘STI’)
Why does the Board
consider an STI Plan is
appropriate?
What are the
performance
conditions?
Is there an overriding
financial performance
condition or other
condition?
Variable performance based remuneration strengthens the link between pay and performance. The purpose of these programs is to
make a large proportion of the total market reward package subject to meeting various targets linked to OZ Minerals’ business
objectives. The use of variable performance based remuneration avoids much higher levels of fixed remuneration and is designed to
focus and motivate employees to achieve outcomes beyond the standard expected in the normal course of ongoing employment. A
reward structure that provides variable performance based remuneration is also necessary as a competitive remuneration package in
the Australian and global marketplace for executives.
The performance conditions determining STI outcomes in 2016 are: (a) Company KPIs and (b) Individual KPIs. Performance conditions
were set as follows:
Company KPIs
Company KPIs are set and weighted at the beginning of each year and are designed to drive successful and sustainable financial and
business outcomes, with reference to the Board approved corporate objectives, plans and budget for the year. For 2016, the key areas
of focus were improving the Company’s operational & financial performance, sustainability performance and progressing strategic
growth objectives. The Company KPIs in 2016 as applied to Executive KMP comprised of the following:
KPI Category
KPI Detail
% Weighting
Operational & Financial
Underlying EBITDA, Operating Cash Flow, Leadership
Effectiveness
Sustainability
Safety Improvement, Safety Behaviours
Strategy & Growth
Concentrate Production & Sales, Carrapateena
Development, Growth Pipeline
40
20
40
The Company KPI hurdle in 2016 accounts for 50% of the STI award.
Individual KPI’s
Individual KPIs for each Executive KMP vary by individual based on accountabilities.
The Board assesses and sets the KPIs applicable to the Managing Director & Chief Executive Officer award, and the Managing Director
& Chief Executive Officer assesses and sets the KPIs for each of the other Executive KMP in consultation with the Board. KPIs were
also set to take into account the specific performance of each Executive KMP and their ability to influence the outcome of the
Company’s performance.
The Individual KPI hurdle in 2016 accounts for 50% of the STI award.
Yes. The availability of the STI Pool is subject to the discretion of the Board, having regard to the interests of the Company and
shareholders. The Board can choose not to pay, or reduce the amount of the STI otherwise payable.
55
36
Annual and Sustainability Report 2016
Remuneration Report
Remuneration Report
Short Term Incentive (‘STI’) continued
How is the STI
structured to reward
exceptional
performance?
What is the value of the
STI opportunity?
The STI Plan is designed to reward Executive KMP at three pre-determined performance levels – threshold, target and maximum:
Threshold performance represents the minimum level of performance required for an STI award to vest.
Target performance
represents the achievement of planned or budgeted performance, set at a challenging level.
Maximum performance represents outstanding performance set at a stretch level.
For 2016, the target and maximum STI reward opportunity for Executive KMP was set as follows:
Executive KMP
Andrew Cole
Luke Anderson
Robert Fulker
Mark Rankmore
Target STI
(as % of TFR)
Maximum STI
(as % of TFR)
70
56
56
42
100
80
80
60
The Managing Director & CEO assesses the business performance of Executive KMP throughout the year for progress and
improvement, to arrive at a summary assessment at year end for discussion with the Human Resources & Remuneration Committee
and the Board. The Board also reviews the performance assessment of all executives who report directly to the Managing Director &
CEO, with a view to understanding, endorsing and / or discussing individual circumstances, performance, leadership behaviours and
future development. The Human Resources and Remuneration Committee and the Board assess the performance of the Managing
Director & CEO against the performance targets and objectives set for that year.
The Board considers the method of assessing STI as described above appropriate as the Managing Director & CEO has oversight of
his direct reports and the day to day function of the Company, whilst the Board and Human Resources & Remuneration Committee
have overall responsibility for determining whether Executive KMP have met the performance targets and objectives set for that year.
If an Executive leaves OZ Minerals then the Good Leaver Policy may apply (subject to the Executive’s contract) and, if the
requirements are met, the STI may be granted on a pro rata basis in relation to the period of service completed, subject to the
discretion of the Board and conditional upon the individual performance of the relevant executive.
The Company believes that a LTI Plan can:
•
•
•
•
•
focus and motivate employees to achieve outcomes beyond the standard expected in the normal course of
ongoing employment;
ensure that business decisions and strategic planning have regard to the Company’s long term performance;
be consistent with contemporary remuneration governance standards and guidelines;
be consistent and competitive with current practices of comparable companies; and
create an immediate ownership mindset among the executive participants, linking a substantial portion of their
potential total reward to OZ Minerals’ ongoing share price and returns to shareholders.
The LTI is granted using Performance Rights under the OZ Minerals LTI Plan, as further detailed in the table below.
A grant was made on 16 March 2016 to all continuing participants in the LTI Plan. The number of performance rights granted to
each executive was calculated as their LTI dollar opportunity divided by the adjusted 5-day volume weighted average price of OZ
Minerals as at the start of the performance period. The performance period for the 2016 LTI grant is 1 January 2016 to 31 December
2018.
How is STI assessed?
What happens to STI
awards when an
executive ceases
employment?
Long Term Incentive (‘LTI’)
Why does the Board
consider a LTI Plan is
appropriate?
How is the award
delivered?
Was a grant made in
2016?
37
Remuneration Report
Long Term Incentive (‘LTI‘) continued
What was the value of the
2016 grant for Executive
KMP?
For 2016, the LTI grant made to Executive KMP was as follows:
Executive KMP
Andrew Cole
Luke Anderson
Robert Fulker
Mark Rankmore
2016 LTI Grant
(as % of TFR)
2016 LTI Grant
Allocation ($)
100
90
90
70
750,000
472,500
450,000
280,000
What are the
performance conditions?
The performance conditions are: (a) the Executive KMP meeting the Service Condition; and (b) OZ Minerals meeting the LTI
Performance Conditions. The two conditions are referred to as the Vesting Conditions.
Service Condition
The service condition is met if employment with OZ Minerals is continuous for three years commencing on or around the grant date
(‘Performance Period’).
Performance Conditions
The LTI Plan performance conditions for 2015 were set only on Total Shareholder Return (TSR). The LTI Plan performance conditions
for 2016 were set as follows:
1. Total Shareholder Return (TSR)
Relative TSR has been determined to be the primary LTI performance hurdle measured against a comparator group. The Board
considers that TSR is an appropriate performance hurdle because it ensures that a proportion of each participant’s remuneration is
linked to shareholder value and ensures that participants only receive a benefit where there is a corresponding direct benefit to
shareholders.
TSR reflects benefits received by shareholders through share price growth and dividend yield and is the most widely used long term
incentive hurdle in Australia. To ensure an objective assessment of the relative TSR comparison the Company employs an independent
organisation to calculate the TSR ranking. Performance Rights in respect of this hurdle will vest in accordance with the following table:
TSR of OZ Minerals relative to TSRs of
constituents of the nominated peer group
Proportion of Performance – related
Performance Rights that vest
Below 50th percentile
50th percentile
0%
50%
Between 50th percentile and 75th percentile (not
inclusive)
Straight line vesting between 50% and 100%
75th percentile or above
100%
The TSR performance hurdle accounts for 70% of the LTI award
2. Absolute Share Price Growth
Absolute share price growth has been set as the second LTI performance hurdle. This hurdle will be satisfied if the OZ Minerals share
price has increased by at least 20% over the performance period. Performance Rights in respect of this hurdle will vest in accordance
with the following table:
OZ Minerals Share Price Growth over the
Performance Period
Proportion of Performance – related
Performance Rights that vest
Less than 20%
20% or greater
0%
100%
The Absolute Share Price Growth hurdle accounts for 30% of the LTI award.
38
57
Annual and Sustainability Report 2016
Remuneration Report
Remuneration Report
Long Term Incentive (‘LTI’) continued
Why were the
performance conditions
chosen?
The approach to linking individual executive performance (including mandatory service periods) and long term Company performance
to the vesting of performance rights is standard market practice. The conditions are aimed at linking the retention and performance of
the executives directly to rewards, but only where shareholder returns are realised. The focus on employee-held equity is also part of a
deliberate policy to strengthen engagement and direct personal interest to the achievement of returns for shareholders.
What is the comparator
group?
The comparator companies selected for 2016 are considered to be alternative investment vehicles for local and global investors and
are impacted by commodity prices and cyclical factors in a similar way to OZ Minerals. The list of comparator group companies
appears in the following table.
2016 Comparator Companies:
Comparator Company
Capstone Mining Corp.
HudBay Minerals Inc.
Ivanhoe Mines Ltd
Katanga Mining Limited
KAZ Minerals Plc
Lundin Mining Corporation
Sandfire Resources NL
Taseko Mines Limited
Nevsun Resources Ltd
MMG Limited
Exchange
ASX/Ticker Code
TSX
TSX
TSX
TSX
LSE
TSX
ASX
TSX
TSX
HKEX
CS
HBM
IVN
KAT
KAZ
LUN
SFR
TKO
NSU
1208
What happens to
performance rights
granted under the LTI
Plan when an executive
ceases employment?
If the executive’s employment is terminated for cause, or due to resignation, all unvested performance rights will lapse, unless the
Board determines otherwise. In all other circumstances, unless the Board determines otherwise, a pro rata portion of the executive’s
performance rights, calculated by reference to the portion of the performance period that has elapsed, will remain on foot, subject to
the performance condition as set by the Board. If and when these performance rights vest, shares will be allocated (or a cash
equivalent amount will be paid) in accordance with the OZ Minerals’ Equity Incentive Plan Rules and any other conditions of the grant.
What happens in the
event of a change of
control?
In the event of a takeover or change of control of OZ Minerals, the Board has discretion to determine that vesting of all or some of the
performance rights should be accelerated. If a change of control occurs before the Board has exercised its discretion, a pro rata
portion of the performance rights will vest, calculated based on the portion of the relevant performance period that has elapsed up to
the change of control, and the Board retains a discretion to determine if the remaining performance rights will vest or lapse.
Is there any ability for the
Company to “clawback”
LTI awards?
In the event of fraud, dishonesty, gross misconduct or material misstatement of the financial statements, the Board may make a
determination, including the lapsing of unvested performance rights, the forfeiture of shares allocated on vesting of performance
rights and/or repayment of any cash payment or dividends, to ensure that no unfair benefit is obtained.
Do shares granted upon
vesting of performance
rights granted under the
LTI Plan dilute existing
shareholders’ equity?
Does the Company have a
policy in relation to
margin loans and hedging
at risk remuneration?
Generally, there is no dilution of shareholders’ pre-existing equity as shares allocated to the participants in the LTI Plan upon vesting
of performance rights are usually satisfied by purchases by the plan trustee on market.
Under the Company’s Securities Trading Policy, all executives, directors and officers are prohibited from entering into financing
arrangements where the monies owed to the lender are secured against a mortgage over OZ Minerals’ shares. Transactions entered
into prior to 19 November 2009, when the prohibition was introduced, are exempted from the policy. The Company’s Securities
Trading Policy also prohibits executives and employees from entering into any hedging arrangement over unvested securities issued
pursuant to any share scheme, performance rights plan or option plan.
39
Remuneration Report
3. Company performance and remuneration outcomes
3.1
Company performance
A summary of OZ Minerals’ business performance as measured by a range of financial and other indicators is outlined in the table below.
Table 2 - Company performance (a)
Measure
Underlying EBITDA - $m(b)
Net profit/(loss) after income tax - $m
Net cash inflow from operating activities - $m
Basic earnings/(loss) per share – cents
Share price at end of year - $
Dividends paid per share - cents
2016
373.8
107.8
324.1
35.7
7.89
20
2015
434.9
130.2
429.8
42.9
4.05
6
2014
352.4
48.5
221.5
16.0
3.48
20
2013
(215.5)
(294.4)
179.1
(97.1)
3.15
30
2012
353.9
152.0
344.8
49.5
6.70
40
(a) Refer to the Operational and Financial Review section in the Directors Report for a commentary on the consolidated results, including underlying performance of the Company.
(b) EBITDA has been adjusted where applicable to align with the new presentation of the segment note.
3.2
STI Performance and Outcomes for 2016
The Chairman and the Board, with the assistance of the Chair of the Human Resources and Remuneration Committee, undertook a review of the Managing
Director & CEO’s performance against each of his 2016 KPIs. The Managing Director & CEO reviews the performance of each of the Executive KMP against their
2016 KPIs, and seeks the approval of the Human Resources and Remuneration Committee in determining STI award outcomes. Company KPI performance and
STI for Executive KMP awarded are set out below:
Table 3A – Summary Company KPI Performance
In accordance with the procedure set out in Section 2, Company KPI performance outcomes applicable to STI plan outcomes for Executive KMP were assessed as
follows:
KPI Category
Operations & Financial
Sustainability
Strategy & Growth
TOTAL
Weighting for 2016
%
2016 Outcome
%
40.0
20.0
40.0
100.0
38.5
15.0
36.0
89.5
59
40
Annual and Sustainability Report 2016
Remuneration Report
Remuneration Report
Remuneration Report
Table 3B – STI award percentage for Executive KMP
Table 3B – STI award percentage for Executive KMP
In accordance with the procedure set out in Section 2, an assessment was undertaken of the performance of each of the Executive KMP against their 2016 KPIs.
In accordance with the procedure set out in Section 2, an assessment was undertaken of the performance of each of the Executive KMP against their 2016 KPIs.
Company KPI Performance
(as % of maximum performance)
Company KPI Performance
%
(as % of maximum performance)
%
89.5
Individual KPI Performance
(as % of maximum performance)
Individual KPI Performance
%
(as % of maximum performance)
%
89.5
Overall Performance Outcome (as a
% of maximum performance)
Overall Performance Outcome (as a
%
% of maximum performance)
%
89.5
Andrew Cole
Andrew Cole
Luke Anderson
Luke Anderson
Robert Fulker
Robert Fulker
Mark Rankmore
89.5
89.5
89.5
89.5
89.5
89.5
89.5
89.5
89.5
83.5
83.5
86.6
86.6
89.5
89.5
89.5
86.5
86.5
88.1
88.1
Mark Rankmore
Details of the amounts payable to the Executive KMP appear in Table 3C below.
89.5
Percentage of maximum
grant forfeited
Percentage of maximum
%
grant forfeited
%
10.5
10.5
10.5
10.5
13.5
13.5
11.9
11.9
Details of the amounts payable to the Executive KMP appear in Table 3C below.
Table 3C – STI payments to Executive KMP in 2016
Table 3C – STI payments to Executive KMP in 2016
Details of STI payments awarded to Executive KMP as a result of 2016 performance are included in the table below:
Payment Maximum potential value
Details of STI payments awarded to Executive KMP as a result of 2016 performance are included in the table below:
of payment(a)
Payment Maximum potential value
$
of payment(a)
Percentage of maximum
grant awarded
Percentage of maximum
%
grant awarded
$
%
89.5
89.5
89.5
89.5
86.5
86.5
88.1
88.1
Andrew Cole
Andrew Cole
Luke Anderson
Luke Anderson
Robert Fulker
Robert Fulker
Mark Rankmore
$
671,250
671,250
375,900
375,900
346,000
346,000
211,200
$
750,000
750,000
420,000
420,000
400,000
400,000
240,000
Mark Rankmore
(a) The minimum potential value of the payments was nil. The maximum potential value of payment represents the achievement of stretch performance.
211,200
240,000
(a) The minimum potential value of the payments was nil. The maximum potential value of payment represents the achievement of stretch performance.
41
41
Remuneration Report
3.3
LTI Performance and Outcomes for 2016
Performance rights granted under the OZ Minerals LTI Plan are granted for no consideration. Performance rights carry no dividend or voting rights. On vesting of
a performance right, one ordinary share in the Company will be allocated. The vesting condition for each grant is the relative TSR performance of the Company
over the relevant performance period. In general, the executive must also remain employed with OZ Minerals for a continuous period of three years from the
grant date. Details of the prior awards for relevant Executive KMP are set out in the Remuneration Report for the year in which they were granted.
Details of the performance rights held by Executive KMP that lapsed during the year are set out in Table 10. Additional details are set out in Note 13 to the
Financial Statements
The LTI awards on foot during the year (including those granted as part of the 2016 LTI awards) are detailed below.
Table 4 – LTI awards on foot
e
t
a
D
t
n
a
r
G
m
u
m
i
x
a
M
f
o
e
u
l
a
V
)
a
(
t
n
a
r
g
e
c
n
a
m
r
o
f
r
e
P
)
b
(
t
h
g
i
R
e
u
l
a
V
r
i
a
F
r
e
p
s
t
h
g
i
R
e
c
n
a
m
r
o
f
r
e
P
d
o
i
r
e
P
e
t
a
D
y
r
i
p
x
E
e
m
o
c
t
u
O
g
n
i
t
s
e
V
Andrew Cole
16/3/2016
201,223
$1,722,469
3.88
1/1/2016 – 31/12/2018
15/2/2019
To be determined
21/7/2015
154,344
$754,742
2.82
1/7/2015 – 30/6/2018
15/8/2018
To be determined
Luke Anderson
16/3/2016
126,771
$1,084,646
3.56
1/1/2016 – 31/12/2018
15/2/2019
To be determined
4/12/2015
23,680
$115,795
3.41
1/7/2015 – 30/6/2018
15/8/2018
To be determined
Robert Fulker
16/3/2016
120,734
$1,033,483
3.56
1/1/2016 – 31/12/2018
15/2/2019
To be determined
Mark Rankmore
16/3/2016
74,184
$635,015
3.56
1/1/2016 – 31/12/2018
15/2/2019
To be determined
21/7/2015
35,577
$173,972
3.41
1/7/2015 – 30/6/2018
15/8/2018
To be determined
(a) The maximum value of the grants has been estimated based on a 52-week high closing share price in the calendar year of the grant. For the 2016 grant, this was $8.56 per instrument. The minimum total value of each
grant, if the applicable performance conditions are not met, is nil.
(b) The fair values were calculated as at the grant dates. In accordance with the requirements of applicable Accounting Standards, remuneration includes a proportion of the notional value of performance rights as
compensation granted or outstanding during the year. The notional value of performance rights granted as compensation is determined as at the grant date and progressively allocated over the vesting period. The amount
included as remuneration is not related to or indicative of the benefit (if any) that individual executives may in fact receive. The values were calculated by an external third party based on a Monte Carlo simulation model.
61
42
Annual and Sustainability Report 2016
Remuneration Report
Remuneration Report
4. Executive KMP employment arrangements
The remuneration arrangements for Executive KMP are formalised in employment contracts. Each of these agreements provide for the payment of fixed
remuneration, performance-related cash bonuses under the STI Plan (as discussed above), other benefits, and participation, where eligible, in the Company’s LTI
Plan (as discussed above).
Table 5 – Key provisions of Executive KMP - 2016
Name
Term of contract
Andrew Cole
Permanent – ongoing
until notice has been
given by either party.
2016 TFR
($)
$750,000
Notice period
Termination benefit
Twelve months’ notice by the Company. Six
months’ notice by Andrew Cole.
Company may elect to make payment in lieu of
notice.
No notice period requirements for termination
by Company for cause.
Twelve months fixed remuneration in
the case of termination by the
Company.
Luke Anderson
Permanent – ongoing
until notice has been
given by either party.
Robert Fulker
Permanent – ongoing
until notice has been
given by either party.
Mark Rankmore
Permanent – ongoing
until notice has been
given by either party.
$525,000
Three months’ notice by either party.
Company may elect to make payment in lieu of
notice.
No notice requirements for termination by
Company for cause.
$500,000
Three months’ notice by either party.
Company may elect to make payment in lieu of
notice.
No notice requirements for termination by
Company for cause.
$400,000
Three months’ notice by either party.
Company may elect to make payment in lieu of
notice.
No notice requirements for termination by
Company for cause.
Nine months fixed remuneration in the
case of termination by the Company.
Nine months fixed remuneration in the
case of termination by the Company.
Six months fixed remuneration in the
case of termination by the Company.
43
Remuneration Report
5. Total remuneration for Executive KMP
Table 6 - Total rewards to Executive KMP
)
a
(
s
e
c
n
a
w
o
l
l
A
&
s
t
i
f
e
n
e
B
$
–
&
s
e
e
F
,
y
r
a
l
a
S
s
e
c
n
a
w
o
l
l
A
$
2016
730,384
)
b
(
e
v
a
e
L
l
a
u
n
n
A
d
e
u
r
c
c
A
e
v
i
t
n
e
c
n
I
m
r
e
T
t
r
o
h
S
e
c
n
a
m
r
o
f
r
e
P
f
o
)
e
(
e
u
l
a
V
s
t
h
g
i
R
m
r
e
T
g
n
o
L
r
e
h
t
O
)
d
(
s
t
i
f
e
n
e
B
n
o
i
t
a
r
e
n
u
m
e
R
l
a
t
o
T
’
k
s
i
r
-
t
a
'
n
o
i
t
a
r
e
n
u
m
e
r
f
o
t
n
e
c
r
e
P
)
c
(
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
$
$
$
$
$
36,503
19,616
671,250
9,817
154,440
1,622,010
2015
716,860
5,448
36,346
33,140
675,000
4,848
65,996
1,537,638
2016
495,785
2015
107,750
2016
470,874
2016
380,542
–
–
–
–
17,070
29,215
375,900
4,306
128,510
1,050,786
9,476
10,179
79,225
556
2,339
209,525
2,747
19,364
346,000
4,671
122,390
966,046
21,299
18,645
211,200
3,746
75,202
710,634
%
51
48
48
39
48
40
Andrew Cole
Managing
Director & CEO
Luke Anderson
Chief Financial
Officer(f)
Robert Fulker
Chief Operating
Officer(g)
Mark Rankmore
Head of Human
Resources &
Services(g)
(a) Benefits & Allowances include the value (where applicable) of benefits such as compulsory annual health checks, car parking or other benefits that are available to all employees of OZ Minerals, and are inclusive of Fringe
Benefits Tax where applicable.
(b) Annual leave has been separately categorised and is measured on an accrual basis and reflects the movement in the accrual over the twelve-month period. Any reduction in accrued annual leave reflects more leave taken /
cashed out than that which accrued in the period.
(c) Represents direct contributions to superannuation funds. Amounts greater than the maximum superannuation level have been paid and included in cash salary.
(d) Represents the net accrual movement for Long Service Leave (LSL) over the twelve-month period which will only be paid if Executive KMP meets the required service conditions.
(e) The fair values were calculated as at the grant dates. In accordance with the requirements of applicable Accounting Standards, remuneration includes a proportion of the notional value of equity rights compensation
granted or outstanding during the year. The notional value of equity rights granted as compensation which do not vest during the reporting period is determined as at the grant date and progressively allocated over the
vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that individual executives may in fact receive. The values were calculated by an external third party based on a
Monte Carlo simulation model.
(f)
In the comparative period, Mr Anderson was designated as KMP from 12 October 2015.
(g) Mr Fulker and Mr Rankmore were designated as KMP as at 1 January 2016 following the review of KMP roles.
63
44
Remuneration Report
Remuneration Report
6. Non-executive Director remuneration
6.1
Non-executive Director remuneration policy
Non-executive Director (‘NED’) remuneration is reviewed annually by the Board. NEDs receive a fixed fee remuneration consisting of a base fee rate and
additional fees for committee roles.
Consistent with best practice, NEDs do not receive any form of equity incentive entitlement, bonuses, options, other incentive payments or retirement benefits.
Details are set out in Table 7.
As approved at the OZ Minerals General Meeting on 18 July 2008, the maximum fees payable per annum is $2,700,000 in total. The Board decided, based on a
recommendation from the Human Resources and Remuneration Committee, not to increase the fees paid to Non-executive Directors in 2016.
Table 7 - Details of NED remuneration
Fees
Board
Audit
Sustainability
Human Resources & Remuneration
Chairman
$ per annum
313,285
43,056
21,528
21,528
Member
$ per annum
120,314
21,528
10,764
10,764
All Directors (including the Chairman) are entitled to superannuation contributions (or cash in lieu thereof) equal to 9.5 per cent calculated on base Board and
Committee fees, and are entitled to be reimbursed for travelling and other expenses properly incurred by them in attending any meeting or otherwise in
connection with the business or affairs of the Company, in accordance with the Company’s constitution. The Chairman of the Board does not receive additional
fees for being a member of any Board Committee.
6.2
Total fees paid to NEDs
Total fees received by NEDs in 2016 were $1,059,764 (2015: $1,101,018) compared with the maximum approved fees payable of $2,700,000. Payments and
non-monetary benefits received by NEDs individually are set out in the following table:
45
Remuneration Report
Table 8 - Total remuneration paid to NEDs
h
s
a
C
&
s
e
e
F
d
r
a
o
B
s
t
i
f
e
n
e
B
$
323,796
324,267
80,209
-
120,314
120,314
120,314
120,314
120,314
120,314
50,131
120,314
s
e
e
F
e
e
t
t
i
m
m
o
C
$
-
-
14,352
-
43,056
33,189
53,820
49,335
43,056
43,056
8,970
21,528
y
r
a
t
e
n
o
M
-
n
o
N
s
t
i
f
e
n
e
B
$
-
-
-
-
-
-
-
-
-
-
-
-
)
a
(
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
19,251
18,780
8,983
-
15,520
14,583
16,543
16,117
15,520
15,520
5,615
13,475
n
o
i
t
a
r
e
n
u
m
e
R
$
l
a
t
o
T
343,047
343,047
103,544
-
178,890
168,086
190,677
185,766
178,890
178,890
64,716
155,317
Neil Hamilton
Chairman
Julie Beeby(b)
Non-executive Director
Paul Dowd
Non-executive Director
Charles Lenegan
Non-executive Director
Rebecca McGrath
Non-executive Director
Dean Pritchard(c)
Non-executive Director
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
(a) Represents direct contributions to superannuation funds. Any amounts greater than the superannuation maximum contribution base have been paid and included in board fees and cash benefits. The Company contributions
to superannuation were increased by 0.25 per cent from 1 July 2014 in accordance with the change in legislation
(b) Dr Beeby was appointed a Non-executive Director on 19 April 2016.
(c) Mr Pritchard retired as a Non-executive Director on 24 May 2016.
65
46
Annual and Sustainability Report 2016
Remuneration Report
Remuneration Report
Equity instrument disclosure relating to KMP
Table 9 – KMP shareholdings
The movement in the number of shares held directly or indirectly by each KMP during the year is set out below:
r
o
(
6
1
0
2
y
r
a
u
n
a
J
1
t
a
e
c
n
a
l
a
B
)
P
M
K
s
a
e
t
a
d
$
39,500
–
10,800
20,750
12,750
22,720
10,000
–
–
–
116,520
n
o
i
t
a
r
e
n
u
m
e
r
s
a
d
e
t
n
a
r
g
s
e
r
a
h
S
s
t
h
g
i
r
f
o
e
s
i
c
r
e
x
e
n
o
d
e
r
i
u
q
c
a
e
r
a
h
S
$
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
6
1
0
2
r
e
b
m
e
c
e
D
1
3
o
t
d
e
s
a
e
c
e
t
a
d
r
o
(
t
a
e
c
n
a
l
a
B
)
P
M
K
e
b
$
39,500
8,000
10,800
20,750
20,645
22,720
10,000
–
–
–
s
t
n
e
m
e
v
o
m
r
e
h
t
o
t
e
N
$
–
8,000
–
–
7,895
–
–
–
–
–
15,895
132,415
NEDs
Neil Hamilton
Julie Beeby(a)
Paul Dowd
Charles Lenegan
Rebecca McGrath
Dean Pritchard(b)
Executive KMP
Andrew Cole
Luke Anderson
Robert Fulker
Mark Rankmore
Total
(a) Dr Beeby was appointed a Non-executive Director on 19 April 2016.
(b) Mr Pritchard retired as a Non-executive Director on 24 May 2016. The balance shown for Mr Pritchard represents the number of shares held on the date he ceased to be a member of the KMP.
47
Remuneration Report
Table 10 – KMP performance rights holdings
The movement in the number of performance rights for KMP during the year is set out below:
6
1
0
2
y
r
a
u
n
a
J
1
t
a
e
c
n
a
l
a
B
n
o
i
t
a
r
e
n
u
m
e
r
s
a
d
e
t
n
a
r
G
s
t
h
g
i
r
f
o
e
u
l
a
V
)
a
(
)
$
(
d
e
t
n
a
r
g
Andrew Cole
154,344
201,223
779,922
Luke Anderson
23,680
126,771
451,557
Robert Fulker
–
120,734
430,053
Mark Rankmore
35,577
74,184
264,243
Total
213,601
522,912
1,925,775
d
e
s
i
c
r
e
x
e
/
d
e
t
s
e
v
s
t
h
g
i
r
f
o
e
u
l
a
V
)
$
(
–
–
–
–
–
d
e
s
i
c
r
e
x
E
–
–
–
–
–
d
e
s
p
a
L
–
–
–
–
–
6
1
0
2
r
e
b
m
e
c
e
D
1
3
t
a
e
c
n
a
l
a
B
355,567
150,451
120,734
109,761
736,513
s
t
n
e
m
e
v
o
m
r
e
h
t
o
t
e
N
–
–
–
–
–
d
e
t
s
e
V
–
–
–
–
–
(a) The fair value of the performance rights granted to Mr Cole on 16 March 2016 was calculated on the grant date as $3.88 (the fair value has been calculated by an independent advisor based on a Monte Carlo simulation
model). The fair value of the performance rights granted to other KMP on 16 March 2016 was calculated on the grant date as $3.56 (the fair value has been calculated by an independent advisor based on a Monte Carlo
simulation model).No price is payable on acquisition of these rights, and there is no exercise price. Subject to the achievement of relevant performance conditions, these rights would be expected to vest on 31 December
2018.
7. Other transactions with Executive KMP or NEDs
There were no loans made to Executive KMP, NEDs or their related parties during the year. There were no other transactions between the Company and any
Executive KMP, NED or their related parties other than those within the normal employee, customer or supplier relationship on terms no more favourable than
arm’s length.
67
48
Annual and Sustainability Report 2016
Sustainability
Performance Summary
Focus area
Performance
01
Environment
Water: 1,222 ML of water recycled.
Energy and Emissions: 21% reduction in direct greenhouse
gas emissions.
02
Social
03
Safety
04
Health and Wellbeing
Community investment: total sponsorship of local
organisations was $0.3 million.
Local Procurement: 96% of total spend on goods and
services dedicated to Australian suppliers and contractors.
LTIFR: the total injury frequency rate increased from 0.99 in
2015 to 1.07
TRIFR: the total recordable injury frequency rate increased
from 5.30 in 2015 to 6.80.
Safety culture: enhanced safety programs such as the
Prominent Hill Site Safety Acceleration program.
Received Industry Collaboration Award along with TAFE
SA and THIESS for our Partnerships, People and Production
training program.
On-site education sessions in partnership with SANO's
Wellbeing, Health and Injury Prevention Program.
Value Creation and Sustainability
As outlined on page 8 in this report, our Company
strategy is centred around creating value for
our stakeholders. This includes value for our
shareholders, employees and communities and
lays the foundation of our approach to improve
OZ Minerals’ environmental, social, safety and
health and wellbeing performance. This also helps
us to maintain trust and reduces risk throughout
the value chain. As we take a long-term view, our
principles and our approach to value creation have
a relevance for sustainable development.
Commitments
In previous years, OZ Minerals published a set of
annual targets and commitments that underpin
our sustainability performance. This year, we
decided to publish a set of forward-looking
commitments that cover key focus areas of our
activities. With the roll-out of OZ Minerals’ new
performance standards in 2017, each asset is
responsible to meet these commitments. We
Overview of Materical Topics
believe that this provides a clear strategic direction
and accountability. The management approach
sections of each key focus area include some of
these commitments.
Material Topics
The table below provides a value chain analysis
for each material topic and should be considered
in conjunction with the overall materiality
assessment described on page 74. Each topic is
discussed in the report. The term ‘material topic’
is used for voluntary sustainability reporting to
describe topics that are considered to have the
potential to affect our sustainability performance.
Report Boundaries
In the sustainability section of the report, we aim
to report on all aspects of our business, including
joint ventures where we have operational control.
We apply selected GRI Standards, a comprehensive
set of guidelines covering all dimensions of
sustainability. The reporting period is for the
calendar year 2016, unless otherwise stated.
Cautionary Statement
The sustainability section of this report contains
forward-looking statements in regard to results
of activities, plans and objectives. Actual results
may significantly differ from these statements,
depending on a variety of factors.
By their nature, forward looking statements
involve risk and uncertainty because they relate
to events and depend on circumstances that
will occur in the future and may be outside OZ
Minerals' control.
Given these risks and uncertainties, undue
reliance should not be placed on forward looking
statements.
high
medium
low
Topic
Exploration
Mining and Production
Processing and Transport
Sales
Economic Performance
Energy and Greenhouse Gas
Water
Local Communities
Indigenous Peoples
Health and Safety
Business Ethics
Awards
Recognition FTSE4Good Constituent
OZ Minerals Ltd is a constituent of the FTSE4Good Index. The FTSE4Good Series is
designed to help investors integrate environmental, social and governance (ESG) factors
into their investment decisions. The indexes identify companies that better manage
ESG risks. The ESG Ratings are used by investors who wish to incorporate ESG factors
into their investment decision making processes, or as a framework for corporate
engagement and stewardship.
73
Materiality and
Stakeholders
OZ Minerals conducts an annual materiality assessment to determine the relevance
of sustainability topics for our stakeholders and the Company.
This report focuses on topics that have been
identified as being of particular importance from an
internal perspective and the demands placed by our
stakeholders. On the basis of a materiality assessment,
we determine key topics for our sustainability
reporting and management to understand and
prioritise the topics that matter to us and our
stakeholders.
Materiality Process
The process to identify material topics complies with
the GRI guidance on materiality and completeness,
and is based on a range of internal and external
considerations and priorities. They are identified on the
basis of an extensive document review, surveys, and
dialogue with internal and external stakeholders. This
includes reviewing material topics and commitments
from industry peers, independent research reports
aimed at identifying material topics in the industry,
sustainability topics raised by key stakeholders
including government and local communities, analyst
articles and daily media monitoring reports.
We prioritise sustainability topics based on discussions
with interested parties, input from senior leaders,
internal subject matter experts, employees and
relationship managers to focus on topics which:
•
•
•
Have a particular influence on the
economic, ecological and social impact of
our business activities;
Have a direct impact on our business
development; and
Are of particular relevance to our
stakeholders and the decisions they make.
Material topics identified as having a high priority for
both the business and stakeholders are discussed in
this report. Other topics are mentioned in the report
and on the Company website. This report covers OZ
Minerals’ operations and its operating subsidiaries,
excluding joint ventures where we do not have
operating control. Seven material topics have been
identified as part of this year’s assessment. These
topics are plotted on the materiality matrix.
OZ Minerals focuses on continuous improvement and
has used the feedback from external sustainability
specialists, analyst groups and management reports
to make a valuable contribution to this document.
Compared with last year, we have not identified
substantive changes to the material topics. As we
refined our process to rank material topics and
extended our sample of stakeholders, we were able
score and rank topics with greater confidence. We
recognise that material topics have a relationship
to our business success. We use the materiality
assessment to identify areas of improvement, identify
risks or commercial opportunities.
The sustainability section of our Combined Report
has been prepared to report against selected GRI
Standards as detailed in the GRI Content Index that
is available on our website. The GRI Standards were
the first global standards for sustainability reporting
and were officially launched in October 2016. OZ
Minerals’ 2016 GRI Content Index is available on our
website and indicates how this report meets the GRI
requirements.
Materiality Matrix
Economic Performance
Energy and Emissions
Local Communities
Water
Business Ethics
Occupational Health and Safety
Indigenous Peoples
Other
l
r
e
d
o
h
e
k
a
t
s
n
o
e
c
n
e
u
fl
n
I
s
n
o
i
s
i
c
e
d
d
n
a
s
t
n
e
m
s
s
e
s
s
a
i
H
g
h
L
o
w
Low
High
Significance of economic, environmental and social impacts
Stakeholder Engagement Process
OZ Minerals undertakes regular engagement,
including face-to-face consultation, with key
stakeholders and uses this consultation to inform
the materiality process. Information around OZ
Minerals’ economic, social and environmental
performance is conveyed to local communities,
pastoralists and traditional owners through regular
liaison and correspondence.
OZ Minerals hosts and organises stakeholder
engagement events and meetings. Some of these
events address topics that are specific to our social
performance and focus on areas in which OZ
Minerals can create shared value.
In 2016, OZ Minerals collected feedback provided
by stakeholders regarding the Carrapateena
project through a formal stakeholder feedback
survey process. The results from the survey provide
formal quantitative and qualitative data that
reflects what is important to a broad range of
stakeholders and forms part of the materiality
assessment. The majority of stakeholders view
social and economic factors as being of highest
importance to them, in particular employment
opportunities, building capabilities and skills and
economic growth.
We identified the following stakeholder groups as
important to our business success:
Stakeholder Group
About the Stakeholder
Engagement
Customers
Employees
Smelters, refiners and downstream copper product fabricators
around the globe. With a key interest in product quality and a
greater awareness of global labour issues, human rights and
downstream product safety due to the nature of their business.
Regular formal and informal communication with marketing department staff.
Personal visits by marketing department and process management staff. Site
visits to customer plants and customer representatives encouraged to visit OZ
Minerals’ operations. Production of parcels as per customer specifications.
Employees are predominantly South Australian based, fly-in
fly-out employees covered by collective bargaining agreements.
Key topics for employees include: occupational health and
safety, employment, diversity and equal opportunity, training
and education, and personal wellbeing.
Regular communication with staff through presentations and discussions,
through the intranet, email alerts, hard copy newsletters, noticeboard items
and a regular electronic letter from the CEO.
Refer to the safety, and health and wellbeing section for information about our
safety programs.
Governments
Local, state and national regulators and Government agencies.
Regular formal and informal communications with operational senior
management and staff through site visits, meetings, events and reporting,
partnership in South Australian Government Copper Strategy.
Industry associations Mining and minerals industry.
Representatives on boards and committees, engagement on specific projects.
Investment
community
Local
communities
Mainstream brokers, financial analysts and fund managers,
sustainability and ethical investment analysts, retail investment
advisers, existing and potential shareholders, both domestically
and internationally.
Annual General Meeting, Annual Reports and Sustainability Reports, Quarterly
Reports and webcasts, ASX releases, Company website, direct phone contact
with investor relations, presentations at industry conferences, briefings and site
visits, investor presentations.
Individuals and groups local to our operations,
including pastoralists, traditional owners, local Aboriginal
groups, development groups, local businesses and councils.
Location-specific community relations personnel, community meetings, formal
and informal communications, as well as social media.
Media
Print, radio, television and online platforms.
Dedicated media relations function. Regular engagement with business and
regional media through teleconferences, regular one-on-one discussions,
interviews, ASX releases, media releases and site visits.
Non-government
organisations
Local, regional and international environmental,
human rights, development, corporate social responsibility and
sustainability organisations.
Liaise directly with operational management,environment and community
relations departments on specific issues. Annual Reports and Sustainability
Reports and media releases.
Shareholders
Retail and institutional shareholders.
Annual General Meeting, Annual Reports and Sustainability Reports, Quarterly
Reports, and webcasts, website (where all releases and other information on
OZ Minerals is maintained and regularly updated), and investor presentations.
Suppliers
From local businesses to large international organisations.
Regular meetings with commercial and operational staff.
Other mining
companies and
Academia
Other mining companies, mining regulators, industry
associations and minerals industry academics, Industry Alliance
with representatives of resource companies in the Coober Pedy
region and Coober Pedy Council.
Papers and presentations given by executives at various industry-related
conferences. Location-specific industry meetings, informal communication and
working groups.
75
Environment
Environment
Management Approach
OZ Minerals is committed to achieving a high standard of care for the natural
environments and communities which we come into contact with.
Our commitment to environmental responsibility
is embodied in our Code of Conduct,
Environment and Community Policy and our
Environment Performance Standards. Our policies
and standards support a precautionary approach
to environmental challenges.
Environment and Community
Policy
The objective of this Policy is to ensure OZ
Minerals delivers sound environmental outcomes
whilst supporting the creation of shared value for
the communities in which we operate. To meet
the objective of this policy OZ Minerals will:
• Minimise environmental impact by using
robust scientific processes and impact
assessments;
•
•
•
Ensure effective stewardship of natural
resources by minimising our environmental
footprint, reducing waste and using energy,
water and other raw materials efficiently;
Ensure safe transport of our product
through the logistics chain; and
Plan for mine closure and ensure adequate
financial provisions exist.
This policy applies to all employees, directors,
officers, consultants and contractors of OZ
Minerals and its subsidiaries. Complete and
consistent implementation of this policy and
its supporting standards and procedures
are required across all OZ Minerals’ assets.
Adherence will be verified through regular audit
and review processes.
Environmental Performance
Standards
The Environmental Performance Standards
describe the minimum requirements of assets
to manage environmental threats and impacts
associated with specific activities or tasks, and to
identify opportunities that have the potential to
drive value creation for both OZ Minerals and the
communities in which we operate.
As part of our operational planning and
management process, we develop risk
management plans to identify environmental
risks and opportunities. All assets must
periodically conduct an audit of their compliance
to the OZ Minerals Standards to ensure elements
are understood and applied at a local level.
Governance and Management
Systems
OZ Minerals' Governance Structure is shown
on pages 16 -18. The Board of Directors, the
Chairman, CEO and Executive Committee are
responsible for the supervision and management
of our strategy. The strategic implementation of
our environmental performance is overseen by
the Sustainability Committee of the Board.
The Audit Committee assists the Board of
Directors in fulfilling its responsibilities with
respect to financial reporting and disclosure,
internal and external audit processes and,
together with the Sustainability Committee,
review the risk management processes.
Management is responsible for implementing
management systems across the business. We
monitor their application and effectiveness
through internal and external audits. Training
and competency is part of the continuous
improvement process and detailed in the
Performance Standard.
77
Environment
Energy and Emissions
Secure and cost-effective energy supply underpins our mining operations. We
investigate various power generation technologies, including solar photovoltaic,
and energy efficiency opportunities to minimise operational cost and emissions.
OZ Minerals’ Emissions and Resource Efficiency
Performance Standard defines requirements
for energy, accounting and resource efficiency
to meet statutory obligations, minimise
greenhouse gas emissions and drive continuous
improvement.
Energy Use
To ensure that appropriate measures are
in place to increase energy efficiency, OZ
Minerals develops programs to ensure ongoing
identification of energy efficiency projects and
consider renewable energy technologies.
The majority of OZ Minerals’ energy use occurs at
the Prominent Hill operation. The two main areas
of energy consumption are at the processing
plant, which uses electricity from the main grid,
and mining vehicles that use diesel fuel. In 2016,
OZ Minerals did not sell energy.
In line with the mine plan from Prominent Hill,
mining activities have moved to deeper areas
of the open pit, which results in a higher diesel
use per tonne of material mined. However, as
we continue to mine less waste, there are fewer
trucks operating and diesel consumption has
been reduced.
Energy use and greenhouse gas emissions are
reported in line with the methodology under
the National Greenhouse and Energy Reporting
Scheme (NGERS). In the 2015/16 financial
period, OZ Minerals’ total energy consumption
was 3.29 petajoules (PJ), which is a 13 per cent
reduction compared with the prior year (3.8 PJ).
Diesel and purchased electricity are the dominant
energy sources, contributing 62 per cent and 37
per cent of total energy use, respectively.
Greenhouse Gas Emissions
Assets must develop, implement and maintain
an Energy and Greenhouse Gas Management
Plan, which outlines current and future sources
of greenhouse gas emissions, and commercial
considerations associated with greenhouse gas
emissions.
Our primary source of Scope 1 greenhouse gas
emissions is diesel use at Prominent Hill. Our
overall Scope 1 emissions decreased by 21 per
cent compared with the previous year. A total
of 0.33 million tonnes of Scope 1 and Scope
2 carbon dioxide equivalent emissions were
generated. OZ Minerals discloses its sustainability
performance as part of the Australian
Government’s NGERS and the Australian
Government’s National Pollutant Inventory (NPI).
Limited assurance was provided.
Greenhouse gas and air emissions by type and
weight for Prominent Hill and the Carrapateena
project are on the opposite page.
Air Quality
Air quality is affected by the generation of
sulphur and nitrogen oxides through the
burning of fuels. However, outside of these and
greenhouse gas emissions, the main emission
relevant to the assets is dust - generated by
stockpiling, moving materials and from vehicles
driving on unsealed surfaces. OZ Minerals uses a
range of control measures to reduce the amount
of dust generated through activities, including
regular road maintenance and implementing
speed restrictions. Recycled water is applied on
frequently used roads to reduce dust creation.
Systematic sampling of air quality at the assets is
conducted to understand potential environmental
impacts. The quantity of total suspended
particulates and particles less than 10 parts per
million is also measured and used as a leading
indicator for occupational hygiene monitoring
and control. From comprehensive sampling,
undertaken at Prominent Hill and Carrapateena,
OZ Minerals can verify air quality management
is effective in preventing adverse impacts on
workers, the community and the environment.
Data for key air emissions from stationary
and mobile sources are reported annually to
the National Pollutant Inventory. There are no
ozone-depleting substances, persistent organic
pollutants, stack emissions or hazardous air
pollutants produced at Prominent Hill.
Air emissions by type and weight for Prominent
Hill and the Carrapateena Project are provided
on the opposite page.
Energy consumption (GJ)
Electricity from the grid
By combustion
Energy produced
Prominent Hill
Carrapateena
Group Office
Total
1,225,454
-
1,090
1,226,544
2,051,608
10,208
-
2,061,816
38
2,099
-
2,137
Total
3,277,100
12,307
1,090
3,290,498
Total direct and indirect emissions
Greenhouse gas emissions Scope 1 (t CO2-e)1
Greenhouse gas emissions Scope 2 (t CO2-e)2
Total of Scope 1 and Scope 2 (t CO2-e)
Methane CH4 (t CO2-e)
Nitrous Oxide N2O (t CO2-e)
Sulphur Hexafluoride SF6 (t CO2-e)
Oxides of nitrogen (t)
Sulphur dioxide (t)
Total volatile organic compounds (VOC) (t)
Particulate matter < 10 um (t)
2015-2016
142,669
190,825
333,494
198
446
11
994
0.85
52
4,488
2014-2015
180,290
199,209
379,499
267
567
11
1,242
1.11
86
5,899
The reporting period is July 2015 to June 2016. The energy and emissions boundary is based on operational control as defined by the National Greenhouse and Energy Reporting (NGER) Act 2007. The applied
global warming potential (GWP) rates and emission factors are based on the NGER Act (2007) and the National Pollutant Inventory.
(1) Scope 1 refers to emissions produced directly by operations, primarily resulting from combustion of various fuels and includes CO2-equivalent values for greenhouse gases such as CH4, N20 and SF6.
(2) Scope 2 refers to indirect emissions resulting from the import of electricity from external parties; commonly the electricity grid.
21%Greenhouse Gas
Reduction
6
1
0
2
t
r
o
p
e
R
y
t
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b
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n
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A
79
Environment
Water
Water is used in all stages of the mine life cycle. Efficient use, recycling and
disposal of water are key aspects of operational performance.
OZ Minerals' Water Performance Standards
define the requirements to ensure that assets
effectively manage water, including process water,
stormwater, discharges and dewatering activities.
OZ Minerals' standard approach to water
management is to require a water management
plan incorporating where necessary groundwater
monitoring both planned and opportunistic.
Prominent Hill and Carrapateena are situated in
areas with an average annual rainfall of less than
200 millimetres per year and both are dependent
on the supply of groundwater to sustain
operations.
Tailings Management
OZ Minerals' Tailings Performance Standard sets
out the requirements for the long-term safe
impoundment of mine tailings and residues
to prevent uncontrolled releases into the
environment. Assets are required to develop a
Tailings Storage Facilities Operations Management
Plan to ensure safe practices are conducted in
accordance with statutory obligations and design
and to minimise short and long-term threats.
Water Management
Prominent Hill Water Management
not impact on the Great Artesian Basin.
Prominent Hill’s wellfield is located approximately
40 km south-east of the mine and is operated
under the tenure of a Miscellaneous Purpose
Licence (MPL) and a water extraction licence
under the Far North Wells Prescribed Area
Water Allocation Plan as established for the
South Australian Arid Land Region. The water is
sourced from within the Boorthanna Formation,
a sedimentary geological unit of the Arckaringa
Basin. The Arckaringa Basin is a groundwater
system that is discrete from the Artesian Eromanga
Aquifer system that feeds the Great Artesian Basin
springs. No influence on these springs has been or
is expected to be detected.
All wellfields are located on nearby pastoral
stations. In the majority of cases, the pastoralists
draw water from a different, shallower and/
or discrete aquifer than that used by the mine
wellfield. OZ Minerals has a water monitoring
program to monitor water levels and quality in
previously agreed pastoral wells on neighbouring
stations. Surrounding groundwater sources are
closely monitored and results reported to relevant
stakeholders. It is important to note that aquifers
are localised within the Arckaringa Basin and do
As part of Prominent Hill’s water licence
requirements, quality and quantity thresholds
have been set on the water extraction. There
have been ongoing concerns that one area of the
wellfield, also utilised by neighbouring pastoralists,
is experiencing a reduction in water depth below
specified limits. OZ Minerals continues to invest
in determining a long-term water management
strategy and conducts investigations to better
understand the hydrogeology of the area.
It has been a focus of OZ Minerals to ensure
the efficient use of raw water by increasing the
recycling of water from the tailings storage facility
at Prominent Hill. Increased recovery has seen a
significant reduction in raw water consumption.
Carrapateena Water Management
At Carrapateena, a groundwater operational
monitoring network is currently implemented
to provide water level and water quality data.
Together with a numerical groundwater flow
modelling, we improve the understanding of
the regional groundwater system and optimise
wellfield management. These programs will be
updated and reviewed at least annually.
Water withdrawal
(ML)
Prominent Hill
Carrapateena
Total
Water discharge
(ML)
Prominent Hill
Carrapateena
Total
Surface
water
Groundwater
(mine dewatering)
Groundwater
(wellfield)
Rainwater/
Stormwater
Municipal
water supply
Total
recycled
% Total
recycled
0
0
0
465
0
465
5,200
43
5,243
0
0
0
0
1,222
0.08
0.08
0
1,222
22
0
21
Subsurface
Surface
Sewers
Land (dust
suppression)
Land
Treatment
facilities
Groundwater
0
0
0
0
0
0
0
0
0
51.8
37.6
89.4
0
2.5
2.5
1,222
0.09
1,222.09
0
4.4
4.4
6
1
0
2
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81
Environment
Waste
Minimising waste generation, optimising recycling and managing waste is key for
operations in remote locations.
Waste Rock and Tailings
OZ Minerals’ Waste Rock and Ore Standard defines
the requirements for the management of waste
rock and ore to prevent adverse environmental
impacts, re-handling of waste, promote beneficial
post-mining land use, and reduce post mining
rehabilitation and closure liability.
Assets must implement a waste rock and ore
tracking system and demonstrate that waste rock
has been properly characterised and routed to the
appropriate facility. A log of material types and
disposal locations must be kept.
Disposal of any solid or hazardous waste in the
waste rock disposal facility requires a scientifically
defensible study that can demonstrate the waste is
compatible with disposal in the waste rock disposal
facility, complies with laws and permits, and will not
compromise rehabilitation and closure success.
Stabilisation and/or progressive rehabilitation
activities must be conducted as soon as practicable.
Rehabilitation success criteria and objectives must
be established and monitored to validate agreed
closure completion criteria.
To prevent or minimise potential impacts associated
with waste rock and tailings disposal, a range of
strategies are implemented during the earliest
stages of project planning through operations to
closure. These include:
•
Geochemical characterisation of potentially
acid-forming (PAF) and non-acid forming
(NAF) materials;
•
•
•
•
•
Resource modelling;
Selective handling and encapsulation of waste
rock;
Disposal of tailings into specially designed and
engineered facilities;
Containment and treatment of mine waters to
meet regulatory discharge criteria; and
Linking operational planning to long-term
closure management.
Prominent Hill
Waste rock disposal facilities must be designed,
constructed and rehabilitated according to relevant
licence and statutory obligations. At the Prominent
Hill operation, waste is managed on site in an
integrated waste rock and tailings storage facility.
Over the reporting period Prominent Hill produced
15.4 million tonnes of waste rock, with no PAF
material being mined, and 8 million tonnes of
tailings. Most of the waste rock generated is placed
in rock dumps within the mining areas, with a
proportion of NAF rock used for the construction
of mine infrastructure, such as the tailings storage
facility and roads.
We encapsulate PAF rock within the integrated
NAF waste landform stockpiles and prevent surface
water runoff using physical control measures to
prevent impact to the environment.
To ensure our control measures are effective, we
conduct ongoing monitoring of surface water to
detect any potential changes in downstream surface
water quality from baseline values, including metal
concentrations and acidity.
In 2016, approximately 8.3 million tonnes of tailings
were produced. All tailings are contained within
the tailings storage facility. Water sampling is
conducted after heavy rainfall events at sites around
the tailings storage facility and surrounding waste
rock to verify proper containment of heavy metals
and acid-generating rock material.
Carrapateena
Construction of the Carrapateena decline has
begun with Australian company, PYBAR Mining
Services. PYBAR was awarded the contract to build
the 600 m deep and 7,500 m long decline with
associated underground infrastructure and surface
ventilation. Appropriate waste management is
required to minimise environmental impacts and
risks associated with waste disposal infrastructure.
To prevent or minimise the potential environmental
impacts associated with waste rock disposal, we
implement a range of strategies during project
development and operations. In addition, the group
standards for Waste Rock and Ore and Tailings
define the requirements for the management of
waste rock.
Mineral Waste
Overburden
(t)
Material moved
(t)
Total ore mined
(t)
Liquid fossil
fuels (kL)
Lubricants
(kL)
Explosives
(t)
Prominent Hill
27,812,491
44,948,296
17,135,805
52,232.1
857.4
7,077
Data reported to the Australian Government’s NGERS and/or the Australian Government’s NPI. Reporting period: July 2015 – June 2016.
General Waste
OZ Minerals’ Waste and Waste Water Standard
defines the requirements for minimising waste
generation, optimising recycling, and managing
hazardous wastes, non-hazardous wastes and
waste water.
Each standard must maintain a fit for purpose
waste management plan that describes controls
and processes for identifying potential waste
streams and segregating and disposing of
hazardous wastes and non-hazardous wastes
in compliance with statutory obligations. The
standard also defines the requirements for
landfill, onsite and offsite disposal, and sewage
waste water.
Prominent Hill has an onsite waste resource
recovery centre, which enables a significant
reduction in the amount of waste sent to landfill
and recycles stockpiled steel, cans, bottles and
other materials onsite. Recycling is undertaken
at Carrapateena and all non-mineral waste
generated is transported off site.
Non-mineral waste
(t)
Solid recycled
Liquid recycled
reused
Landfill
Incineration On-site storage
Carrapateena
Prominent Hill
Total
586
24
610
70,884
0
70,884
1,555
456
2,011
191
0
191
0
0
0
Hazardous
transported
134
0
134
Case Study: Commitment to Recycling
and Re-Use
Several worn-out steel dump truck trays at the Prominent Hill mine
were in need of disposal. Due to the sheer size of these trays it was
considered extremely difficult to move them off-site for recycling. Many
disposal options were considered. OZ Minerals, in conjunction with
THIESS Mining, organised for the worn out trays to be cut into smaller
pieces by SIMS Metal enabling transport off-site via Toll back loads for
recycling. This process has shown that even large items from site can be
disposed of in an environmentally sustainable way.
As part of OZ Minerals’ ore processing activities, lead cupelles are
generated. Over the years, the number of cupelles built up onsite.
Suitable disposal methods were investigated, such as off-site
encapsulation at a waste facility or reprocessing. The final decision was
made to re-process the cupelles at the Nyrstar Facility at Port Pirie in
South Australia, which allows for recovery of the lead from the cupelles
for recycling thereby negating the need for storage of toxic waste in
landfill. This process has now become the standard for Prominent Hill's
disposal of lead cupelles in the future.
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Environment
Land and Biodiversity
Understanding potential impacts to land and protecting biodiversity are essential
during all stages of the mine life cycle.
OZ Minerals’ Land and Biodiversity Standard
defines the company’s requirement for
protecting and managing land and biodiversity
conservation, and its requirement to minimise
any adverse acute or cumulative impacts.
Assets must maintain a fit-for-purpose
Biodiversity Management Plan to effectively
manage and monitor biodiversity, and
understand any potential impact to flora and
fauna throughout the mine life cycle. The plan
outlines the approach for our operations and
includes key objectives that address biodiversity
risks and the controls implemented by the asset
to protect flora and fauna, and specifically
how rare and endangered species and priority
conservation status species are protected.
Monitoring programs must include any adverse
biodiversity impacts and the effectiveness of
implemented control measures.
Unauthorised land clearances and stock
and wildlife mortalities must be reported in
accordance with incident reporting standards
and statutory requirements. Where mining
townships or accommodation villages are located
in the vicinity of the mine, asset procedures are
to be implemented to prohibit the unauthorised
collection of native species by employees and
unauthorised hunting or trapping, while access
to designated areas must be minimised.
Prominent Hill
Carrapateena
Annual flora and fauna monitoring surveys
continued at Carrapateena during the year
to develop an understanding of the existing
biodiversity. There are three IUCN species listed
within the area, two vulnerable species, the
Malleefowl and the Plains Rat, were identified
and the endangered, Pernatty Knob-tailed Gecko.
The monitoring results continue to indicate
mining activities will have minimal impact on the
surrounding natural environment, with the Plains
Rat the only species within the local area of the
proposed operations.
Prominent Hill is situated in the Stony Plains
Rangeland bioregion and is characterised by
gibber tablelands, flood plains, dune systems
and breakaway country. The mine area is
characterised by low open chenopod shrub
lands and low open woodlands, with occasional
breakaway areas. Prominent Hill experiences
extreme temperatures and periodic rainfall.
Prominent Hill is required to establish formal
management and monitoring plans in relation
to two specific bird species, the Chestnut-
breasted Whiteface and the Thick-billed
Grasswren (eastern subspecies). Both of these
species are listed on the International Union
for Conservation of Nature (IUCN) Red List of
Threatened Species. Due to the birds’ presence
in the mining area, OZ Minerals has established
a Significant Environmental Benefit (SEB) offset
area to enable the ongoing protection and
enhancement of habitat for the birds.
This parcel of land on Mount Eba Pastoral Lease
has been fenced, de-stocked, and has active
feral animal control. Flora and fauna monitoring
is undertaken twice a year during autumn and
spring to assist in further understanding habitat,
landscapes and species abundance. Prominent
Hill has expanded the monitoring program to
extend further from the SEB offset area to better
understand the benefits of the conservation
efforts.
Rehabilitation and Closure
Careful and proactive planning ensures that social and environmental impacts of
the impending closure of Prominent Hill Mine are mitigated.
To enable effective management and planning
for mine closure, OZ Minerals’ Rehabilitation
and Closure Standard defines the requirements
for rehabilitation and closure planning and the
management of long-term liabilities associated
with OZ Minerals’ assets.
Mine Closure Plan
All of OZ Minerals’ operations have a Mine
Closure Plan and a series of commitments. This
is a legislative requirement in South Australia
and more broadly in Australia. The plan includes
rehabilitation and closure completion criteria to
achieve the post-mining designated land use and
to minimise environmental liability. Provisions
are made for the estimated cost of rehabilitation,
decommissioning and restoration relating to
areas disturbed during the mine’s operation.
The potential impacts of closure are an ongoing
consideration in liaison with governments and
local communities. Consideration is also given to
supporting sustainable community development
initiatives, including the growth of local
businesses not related to mining.
Land Disturbance and
Rehabilitation
During the reporting year, only 0.096 ha of
land was disturbed at Prominent Hill, reflecting
the stable nature of the asset. OZ Minerals
has commenced the demobilisation of its open
pit fleet in line with the mine plan. As the pit
approaches its final years, the waste rock dumps
must be prepared for closure.
At the Carrapateena project, 60 ha of land was
disturbed for mining activities and resource
drilling. More than 10 per cent of this land was
rehabilitated in 2016.
Land management
Total landholding
Mine footprint
2016 Land disturbed
Land rehabilitated
(ha)
Prominent Hill
Carrapateena
11,401
1,070
2,045
121
0.096
60
0
6.7
Case Study: Offset Areas
In the development of the Prominent Hill project, OZ Minerals committed to the
establishment and management of a SEB offset area - a parcel of land, consisting of a
portion of the Mt Eba Pastoral Lease and the undisturbed areas within ML 6228, an area
of approximately 12,415 ha, minus project-related disturbances, was set aside. The two
objectives of the SEB offset area are the management of the area to support habitat by
managing threatening processes during Prominent Hill operations, and the restoration of
selected on-site areas, cleared to enable mining activities. OZ Minerals has an approved
Stage Two Significant Environmental Benefit Offset Area Management Plan to effectively
manage the SEB offset area during the mining life cycle. This management plan outlines
our strategy to meet the aims of the offset area including how we will effectively manage
threatening processes, for example through feral animal baiting and trapping programs,
weed control, and land clearance management.
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Environment
Environmental Compliance
As part of environmental management, OZ Minerals’ activities are governed by
conditions detailed in mining approvals, lease conditions and licences set out by
regulatory authorities.
OZ Minerals engages with regulatory bodies,
government agencies, communities and land
owners during the environmental approval and
permitting process to ensure the community
and government have actively participated
and understand the environmental, social and
economic implications of the project.
All environmental incidents and near misses are
reported through our incident reporting systems.
Investigations are undertaken to determine
the underlying cause in order to eliminate the
potential for failures and to apply effective
company-wide controls.
Significant environmental incidents are
defined as any occurrence within OZ Minerals’
operational control that has resulted in, or
had the potential to cause, at least moderate
environmental impact. In 2016, there were
no significant environmental incidents, spills
or discharges. OZ Minerals had no fines
or prosecutions relating to environmental
performance.
Environmental compliance
Number of significant spills
Total volume of significant spills (m3)
Monetary value of significant fines ($A)
0
0
0
Case Study: Carrapateena
Mining Lease Proposal
OZ Minerals is currently developing an exploration
decline under the conditions associated with a
Retention Lease as granted under the South Australian
Government's Mining Act 1971. OZ Minerals
will require a Mining Lease before development.
Environment and social studies are being undertaken
in preparation for the submission of the Mining
Lease Proposal. Discussions have commenced with
the Kokatha Aboriginal Corporation around project
configuration. OZ Minerals has also started and will
continue to undertake community consultation to
ensure the community is fully aware of the impacts
and benefits that will flow from the project.
87
Social
Social
Management Approach
Social performance is a fundamental pillar of our business and we strive to be
welcomed in the communities in which we operate.
Governance and Management
Systems
OZ Minerals' Governance Structure is shown
on page 17. The Board of Directors, the
Chairman, Chief Executive Officer and Executive
Committee are responsible for the supervision
and management of our strategy. The strategic
implementation of our social performance is
overseen by the Sustainability Committee of the
Board.
The Audit Committee assists the Board of
Directors in fulfilling its responsibilities with
respect to financial reporting and disclosure,
internal and external audit processes and,
together with the Sustainability Committee,
review the risk management processes.
OZ Minerals’ Environment and Community Policy
and the Ethics and Human Rights Policy set out
our commitments in these areas. The policies
are supported by performance and management
standards.
Environment and
Community Policy
The Environment and Community Policy sets
the intent for OZ Minerals to achieve sound
environmental outcomes whilst supporting the
creation of shared value for the communities in
which we operate. OZ Minerals commits to:
•
•
•
•
•
•
Integrating the principle of shared value
into the way we work ensuring our
standards and procedures foster a culture
that values mutually beneficial outcomes,
including for Aboriginal and Indigenous
communities and pastoralists;
Building trusting relationships by engaging
openly and honestly with our host
communities and other key stakeholders
throughout the lifecycle of our projects;
Considering the economic, social and
environmental needs of the communities in
which we operate;
Considering the views of stakeholders in
management decisions;
Encouraging economic prosperity in our
communities during and subsequent to
mining operations;
Embedding sustainable development
considerations as part of project planning
and decision making; and
• Monitoring, maintaining and improving,
where required, environment and
community risks through the use of robust
systems, governance and assurance
processes.
Ethics and Human Rights Policy
The Ethics and Human Rights Policy helps
protect the human rights of our stakeholders and
prevent human rights breaches from occurring at
OZ Minerals’ assets. OZ Minerals commits to:
•
•
•
•
Understanding, promoting and upholding
fundamental human rights within our
sphere of influence;
Recognising and respecting the diversity
of Aboriginal and Indigenous people and
acknowledging the interests they have in
the land, their history and cultural heritage;
Not employing forced, bonded or child
labour and supporting the elimination of
child, forced and compulsory labour; and
Ensuring all security contracts conform with
the Voluntary Principles on Security and
Human Rights.
Social Performance Standards
The Social Performance Standards describe the
minimum requirements of assets to manage
threats associated with specific activities or
tasks, and to identify opportunities that have
the potential to drive value creation for both
OZ Minerals and the communities in which we
operate and wish to be welcome.
Building and maintaining strong supportive
relationships and partnerships with local
people in the areas where we operate drives
value creation for both the business and
communities and is within our core strategy.
We seek to deliver long-term benefits to local
communities and other stakeholders by engaging
and collaborating with local communities,
understanding the social (and other) impacts of
our activities, and reducing the negative effects
of our activities.
89
Social
Community Engagement
OZ Minerals seeks to create opportunities for local communities to generate real
value from activities.
OZ Minerals has a long-term interest in the
relationships with local communities where
we operate. Our Stakeholder Engagement
Performance Standard defines the requirements
in relation to stakeholder engagement and
community consultation.
OZ Minerals engages with key community
groups and stakeholders who may potentially
be affected by the activities of the asset to
determine the risks and social impacts of those
activities. We consult and engage in good faith
with each key community group and stakeholder
in a transparent manner. This also means we
provide accurate and relevant information in a
timely manner, and anticipate and proactively
address community and stakeholder issues and
concerns.
Company assets have mechanisms in place to
capture complaints and grievances and address
them in a timely manner. OZ Minerals maintains
an Incident and Complaint Register. OZ Minerals’
assets are subject to a process to ensure major
communications and consultation activities
are monitored and reviewed to confirm their
effectiveness, and to promote personnel and
external stakeholder feedback.
Engagement Programs
All of our operations have community
engagement programs that target areas
close to OZ Minerals’ operations, and include
communication with local pastoralists and the
communities within the sphere of influence of
the operational and project activities. Prominent
Hill has an extensive engagement program with
communities and stakeholders throughout the
Far North and Upper Spencer Gulf regions of
South Australia. These include, but are not limited
to, the APY Lands, Oodnadatta and Port Augusta.
We regularly meet with the local community in
Coober Pedy and surrounding areas to discuss
our activities and how we can support the needs
of the community.
OZ Minerals and the wider Prominent Hill
workforce contributed to a range of local
and regional programs in 2016, including
a Community Adaptability Program to
support Coober Pedy, Coober Pedy School via
scholarships and donation of goods. OZ Minerals
is proud to have provided continued support
to the Remote and Isolated Children’s Exercise,
the Coober Pedy Football Club, and the various
Gymkhana and Race clubs within Prominent
Hill's sphere of influence.
Case Study – Remote and Isolated
Children’s Exercise
Remote and Isolated Children's Exercise (RICE)
has been providing support to children and
their families in the remote and isolated areas
of South Australia since 1976. Their range
of programs include health and wellbeing,
childcare, early childhood education, play days
and play sessions and a toy and resource library.
RICE has been a very important organisation
for pastoralists within the region surrounding
Prominent Hill. OZ Minerals has long been a
supporter of this program and again in 2016
provided a donation of $20,000, as well as
supporting RICE's 40th birthday celebrations
held in Port Augusta on 10 December.
Memberships
As a modern mining company, OZ Minerals is
committed to creating and sustaining a positive
culture where diversity is valued, encouraged
and promoted. It also has a strong sustainability
focus with significant contributions to people,
communities and the environment. OZ Minerals
is a member of numerous organisations,
including the Australian Mines and Metals
Association (AMMA) and the South Australian
Chamber of Mines and Energy (SACOME). OZ
Minerals is also represented on several South
Australian associations in which company
representatives hold positions on their
governance body. This includes the Minerals and
Energy Advisory Council and the Mining Industry
Participation Office.
Community Investment
We actively invest in the community through sponsorships, in-kind donations and
participation by OZ Minerals employees.
OZ Minerals Stakeholder Engagement Standard
sets out the requirements to align assets'
community investment decisions with the assets'
socioeconomic development plans.
Flying Doctors Service, the Remote and Isolated
Children’s Exercise and the Copper Sculpture
Award as part of the South Australian Living Arts
Festival.
Our preference is to support locally organised
initiatives that provide long-term benefits to
our host communities and are aligned with the
wishes of these communities. Our sponsorship
guidelines, available on our website, detail
our approach to investing in community
development.
OZ Minerals contributed to a broad range of local
and regional programs in 2016. In addition to
funding, OZ Minerals staff and contract partners
provide in-kind assistance through the donation
of time, expertise and resources for community
events and initiatives. OZ Minerals is proud to
have provided continued support to the Royal
Total sponsorship of local organisations
and programs for 2016 was $0.3 million.
In developing sponsorships and community
investment initiatives, OZ Minerals tries to avoid
creating dependency, preferring to support
organisations or projects achieving self-
sustaining outcomes.
For community support, initiatives and areas
located near our operations and projects are
given priority. Other geographic areas may be
considered as long as benefits to OZ Minerals’
stakeholders can be demonstrated.
Community investment
Community appeal
Health
Education
Industry1
Sports
Total
$
128,780
102,945
23,409
21,117
3,953
280,204
(1) The community investment category ‘Industry’ includes
sponsorships events and money paid to industry associations
to support various events and activities related to the mining
industry.
Community investment
Community appeal – 46%
Health – 37%
Education – 8%
Industry – 8%
Sport – 1%
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Social
Indigenous Peoples
Stable local level agreements with land-connected people throughout the life-of-
mine are fundamental to successful resource development.
A genuine partnership with land-connected
indigenous groups is built on trust, respect
and integrity. It allows us to build a common
understanding and language, identify
opportunities, learn from each other and work
towards shared goals.
A comprehensive understanding of the culture
and social structure of impacted communities
is required to ensure respectful, inclusive and
effective engagement. Each asset has dedicated
personnel to ensure regular liaison with Aboriginal
and Indigenous communities. The requirements
regarding engagement with Aboriginal groups are
set out in the Land-Connected Indigenous Peoples
Performance Standard. As part of this, each asset
must operate in accordance with the principles of
the UN Declaration of the Rights of Indigenous
Peoples (UNDRIP).
Prominent Hill
Prominent Hill is located on the traditional
lands of the Antakirinja Aboriginal community.
The Antakirinja Matu-Yankunytjatjara (AM-Y)
received determination in 2011 recognising native
title rights and interests. The AM-Y Aboriginal
Corporation (AMYAC) perpetual trust fund
has been established to assist the sustainable
use of production payments as agreed under
the Prominent Hill Part 9B Mining Agreement.
Production payments from Prominent Hill are paid
into the fund and distributed to the community in
areas such as education, cultural and community
development. Regular meetings are held with
representatives of this group in relation to the OZ
Minerals funded Antakirinja Education Scholarship
Fund. This fund is ongoing and is opened twice
a year to students to assist their studies. It is
designed to support future generations of the
AMYAC community.
Carrapateena Partnering Approach
In developing a Native Title Mining Agreement
for the Carrapateena project, OZ Minerals and
the Kokatha Aboriginal Corporation (KAC)
signed a Partnering Agreement. This agreement,
“Nganampa palyanku kanyintjaku”, translated
as “keeping the future good for all of us”,
determines the nature and values of how both
organisations will work together over life-of-mine
and beyond.
The journey of partnering has assisted the Kokatha
and OZ Minerals in identifying and agreeing on
what success will look like for both organisations
in the short and long term. The partnering
approach is based on principles of equality,
transparency and mutual benefit. It respects and
protects the rights of the Kokatha people and is
in line with the values of ‘Free prior and informed
consent’ (FPIC). It will be on this basis that the
relationship between the KAC and OZ Minerals
will continue throughout the life of the project.
(l-r): Andrew Cole, Managing Director and
CEO, OZ Minerals and Chris Larkin, Chairman,
Kokatha Aboriginal Corporation signing of the
Partnering Agreement at the opening of the
Tjati decline, Carrapateena
Awards
Premier’s Community Excellence Awards in Mining and
Energy – Social Inclusion Award:
OZ Minerals and Antakirinja Matu-Yankunytjatjara Aboriginal Corporation together for
establishing an innovative partnership with Aboriginal people, laying the foundation to
leverage long term business opportunities beyond the life of the Prominent Hill mine and
outside of the resource industry.
Cultural Heritage
OZ Minerals works in partnership with Aboriginal and Indigenous communities,
and consults with them regularly about the impacts and opportunities arising from
projects.
Kokatha people developed a cultural respect
training program. It is endorsed and supported
by OZ Minerals' executive team and is to be
undertaken by all OZ Minerals Carrapateena
employees and employees of contractors. It
includes awareness training on heritage and
artefact finds and working in areas of cultural
significance.
The Cultural Heritage Performance Standard
sets out the requirements for employees and
contractors to proactively collaborate with
relevant communities under national and local
laws to protect and manage cultural heritage in
the areas of their activities.
OZ Minerals adheres to all relevant legislative
Acts and regulations regarding local
communities, land and customary rights,
including those of Aboriginal people. Each
asset must implement a Cultural Heritage
Management System and work with relevant
community groups according to local cultural
norms to maintain a register of tangible cultural
heritage features and intangible cultural heritage
features and values. The assets must mitigate
unavoidable disturbance or destruction in
active collaboration with heritage custodians
and report as soon as possible any significant
incident involving disturbance of cultural heritage
to senior management, local custodians and
authorities.
Cultural Awareness Training
In 2016, cultural heritage and awareness training
was enhanced depending on each employee’s
role and responsibilities, and the likely exposure
to cultural heritage risks. We provide employees
and contractors training and information on
how to avoid damage to cultural heritage, along
with project obligations and requirements. The
Prominent Hill cross-cultural awareness training
programs are offered to all contractors and
employees and they are encouraged to attend.
OZ Minerals has a Native Title Mining Agreement
with the Kokatha people for Carrapateena. The
Case Study: Innovative Use of Technology to
Reduce Land Disturbance
The Carrapateena project requires the establishment of regional infrastructure in
areas with limited or no infrastructure to support the development and operations
of the project. These include, for example, access roads, power transmission assets,
communications assets, water assets and site infrastructure.
The OZ Minerals land access, approvals and projects team developed a collaborative
and participatory process of working with each stakeholder utilising high-resolution
aerial imagery. This approach allows us to expedite land access process in less time,
obtain higher confidence on all options being assessed and reduced land disturbance
on environment. It is in line with agreements we have with traditional owners and
pastoralists.
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Social
Ethics and Human Rights
Business ethics and corporate governance underpin every aspect of the way we
act. Our policies and standards are designed to ensure we operate with integrity
and undertake our business activities ethically.
Training
Asset induction training includes guidance that
raises awareness of human rights responsibilities
with senior management, employees and
contractors (particularly security forces and
human resources), and other stakeholders in
the asset’s sphere of influence. OZ Minerals
periodically provides training to employees
on topics covered within the Human Rights
Standards.
OZ Minerals’ internal governance is guided by
international guidelines, such as the UN Guiding
Principles on Business and Human Rights, United
Nations Universal Declaration on Human Rights,
Voluntary Principles on Security and Human
Rights (VP), International Labour Organisations
(ILO) Conventions and International Council
on Mining and Metals (ICMM) principles.
Expectations of OZ Minerals employees are
further reinforced through the Code of Conduct.
The Ethics and Human Rights Policy helps
protect the human rights of our stakeholders and
prevent human rights breaches from occurring at
OZ Minerals’ assets. OZ Minerals commits to:
•
•
•
•
Understanding, promoting and upholding
fundamental human rights within our
sphere of influence;
Recognising and respecting the diversity
of Aboriginal and Indigenous people and
acknowledging the interests they have in
the land, their history and cultural heritage;
Not employing forced, bonded or child
labour and supporting the elimination of
child, forced and compulsory labour; and
Ensuring all security contracts conform with
the Voluntary Principles on Security and
Human Rights.
Human Rights Performance
Standard
OZ Minerals’ Human Rights Performance
Standard defines OZ Minerals’ requirements
to respect human rights and articulate how
to identify potential human rights threats. OZ
Minerals adheres to all relevant legislative Acts
and regulations regarding local communities,
land and customary rights, including those of
Aboriginal people.
It is expected all assets have a system for
recording and investigating security and
human rights contraventions. Any identified or
reported contravention shall be reported to OZ
Minerals within 24 hours. OZ Minerals uses the
incident-cause-analysis method for all significant
incidents, including breaches of the Ethics and
Human Rights policy. All findings, learnings and
actions are reported across the business until
all have been addressed. Significant incidents
are reviewed by the Sustainability Committee
of the Board. OZ Minerals does not invest in
opportunities where there is a belief that the
Company’s standards cannot be met.
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Social
Socioeconomic Contributions
OZ Minerals understands the importance of generating economic value for its
stakeholders. Disciplined financial management and control systems, together with
a focus on creating value, are essential for long-term success.
The Company seeks to create sustainable
benefits for the local region, which is defined as
areas close to the operation where employees
and suppliers may be sourced. OZ Minerals
makes significant contributions to local, regional
and national economies directly through the
payment of taxes and royalties to governments,
as well as payments to the workforce and
suppliers.
Our operations preferentially purchase goods
and services locally wherever feasible. We
employ 1,302 people and many through our
supply chain. In 2016, OZ Minerals paid more
than $60.4 million in wages and benefits, and
spent $596.8 million on goods and services.
OZ Minerals contributed approximately $42.2
million in royalties to the Government of South
Australia. During the 2016 reporting period,
activities at Prominent Hill and Carrapateena
made significant contributions to local and
regional economies totalling $145.4 million.
Major contractors have requirements in their
agreements consistent with OZ Minerals’ Code of
Conduct, policies and standards.
Operationally, significant value is generated
through indirect employment and investments
in community development initiatives and
programs. For information on community support,
please see the ‘Community Engagement’ section
of this report.
OZ Minerals delivered a strong financial
performance in 2016 with revenue of $822.9
million and Net Profit After Tax, including
non-underlying items, of $107.8 million. The
operating discipline at Prominent Hill saw copper
guidance achieved for the second consecutive
year despite a major state-wide power outage
which resulted in 15 days of lost production. The
Prominent Hill mine life was extended to 2028
following a 40 per cent increase in underground
Ore Reserve and development of a new mine
plan. Copper production targets were lifted for
2018 and 2019.
A rigorous approach to capital discipline saw C1
costs of US 74.1 c/lb within guidance and remain
in the bottom cost quartile of global copper
producers. Strong operating cash flows generated
a cash balance of $655.7 million with no debt,
with annualised procurement costs savings of
more than $40 million delivered and $90.5
million returned to shareholders. The lift in cash
generation through 2016 saw the OZ Minerals
Board approve a fully franked final dividend
of 14 cents per share. An interim dividend of
six cents per share, unfranked, was also paid
bringing total dividends for 2016 to 20 cents per
share. The company’s robust financial position
and strong operating cash flows supported
growth objectives and allowed for shareholder
returns.
The growth pipeline continued to expand with six
exploration partnerships now in place. The West
Musgrave earn-in agreement was executed and
progressed to scoping study and Carrapateena
feasibility studies remain on schedule with
decline development at over 850 metres.
Value generated and distributed for year ended 31 December 2016
All amounts are presented in A$ millions for year ended 31 December 2016.
Revenues
Operations Employees
Payments to providers
of capital
Payments to
government
Community
investment
Region (a)
South
Australia
Jamaica
Other
Total OZ
Minerals
Revenue,
other
income and
financing
income (b)
Operating
expenses (c)
Employee
benefit
expenses(d)
Shareholders (e)
Providers
of funds (f)
Income
taxes paid (g)
Royalties (h)
Community
investments(i)
Economic
value
retained
843.5
(363.8)
(60.4)
(90.5)
(4.8)
(28.4)
(42.2)
(0.3)
1,443.9
(3.7)
(0.5)
3.7
0.5
843.5
(368.0)
(60.4)
(90.5)
(4.8)
(28.4)
(42.2)
(0.3)
1,438.1
Notes:
(a) Amounts are divided into the regions identified below based on where the segment is located
(i.e. Prominent Hill is located in South Australia). The regions include the following entities:
South Australia: Corporate Office, Prominent Hill Mine, Carrapateena; Overseas: Jamaica. The
entities located outside Australia are not defined as operating segments of OZ Minerals.
(b) Revenue includes sales adjusted for discounts, treatment charges, refining and distribution
costs, other income and financing income as disclosed in the income statement in the OZ
Minerals audited financial statements for the year ended 31 December 2016, as reconciled.
(c) Operating expenses include changes in inventories, raw materials, consumables and other
direct costs, contracting and consulting expenses, freight expenses and other expenses as
disclosed in the income statement of the OZ Minerals audited financial statements for the
year ended 31 December 2016.
(d) Employee benefit expenses of $60.4 million are as per the consolidated income statement of
the OZ Minerals audited financial statements for the year ended 31 December 2016.
(e) Payments to shareholders relates to dividend payments.
(f) Payments to providers of funds relates to financing expenses of $4.8 million as per the
income statement in the OZ Minerals audited financial statements for the year ended 31
December 2016.
(g) All organisation taxes (such as corporate, income, property) and related penalties paid at the
international, national, and local levels. This figure does not include deferred taxes. Report the
definition of segmentation used.
(h) Royalty expenses of $42.2 million as per the income statement in the OZ Minerals audited
financial statements for the year ended 31 December 2016.
(i) Community investments of $0.3 million includes voluntary contributions, sponsorships,
donations, education and training.
Overview revenues and other income. All
amounts in A$ millions for year ended 31
December 2016.
Revenue
Other Income
Financing income
Total
Overview operating expenses. All
amounts in A$ millions for year ended 31
December 2016.
Changes in inventories
Raw materials
Exploration and evaluation
Freight expenses
Net foreign exchange gain (losses)
Capital expenditure
Other expenses
Total
822.9
6.8
13.8
843.5
227.8
(313.7)
(29.3)
(52.9)
2.7
(125.4)
(73.0)
(363.8)
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Social
Local Procurement
OZ Minerals supports economic development in the surrounding communities in
which it operates.
OZ Minerals’ Local Enterprise Standard defines
the requirements for local employment and
enterprise opportunities to be proactively
provided to local communities, and in particular,
to relevant land-connected Indigenous groups.
We seek to preferentially purchase goods and
services locally, within the region or within the
state. National or international procurement
is only considered when local procurement is
not available or is not competitive. Local and
Indigenous peoples are encouraged to apply for
suitable positions and enterprise opportunities.
Local businesses are assisted through pre-
qualification processes and the Company’s
procurement standards, which outline a
consistent approach to procuring goods and
services. During the 2016 reporting period,
activities at Prominent Hill and Carrapateena
made significant contributions to local and
regional economies.
Prominent Hill activities dedicated $145.4 million
to South Australian regional and local suppliers
and contractors. A total of approximately $596.8
million was spent on goods and services. These
figures do not include wages and salaries paid to
major contractors or expenditure by contractors
in the local region.
The greatest supply impact is through the
contracting of mining and other services. Largest
material inputs include diesel fuel, explosives,
grinding media used in the processing plant and
cement used in the underground mine. These
materials are sourced from large, reputable
organisations with operations in Australia. Goods
and services spent on local, regional, state
provincial, national and international suppliers is
shown in the graph below.
The direct benefits from investments made by OZ
Minerals include improvements in infrastructure,
health, safety awareness, education and training,
as well as local business development.
Supplier
Local
Regional
South Australian
National
International
Total
Total spent A$
on suppliers
South Australian
National
A$ million
10.0
2.4
133.0
427.4
24.0
596.8
Percentage
2%
0.4%
22%
72%
4%
100%
Local
Regional
International
Combined Total
$596.8
million
Safety
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Safety
Management Approach
OZ Minerals is committed to high standards in safety for our employees,
contractors and the communities in which we operate.
OZ Minerals’ Executive Committee, together with
asset and line management, are committed to
and responsible for safety management. Aspects
of safety management are embedded as key
performance indicators and the remuneration of
the Managing Director and Executive Committee
is, inter alia, linked to safety performance.
OZ Minerals understands that mining activities
have the potential to impact the safety of people,
and all threats must be identified, evaluated and
managed to minimise all identified actual and
potential adverse impacts so far as is reasonably
practicable. More broadly, there is a continued
emphasis on developing a strong safety culture
and employing proactive initiatives. Safety data
is reported weekly to management, including the
Managing Director and Chief Executive Officer.
Internal audits against select company processes
and standards are conducted on an annual basis.
The Health and Safety Policy sets OZ Minerals’
intent to be an injury and occupational disease-
free workplace whilst achieving operational
excellence. OZ Minerals is committed to:
•
•
•
•
•
•
Developing a culture where our employees
and contractors are vigilant, aware of the
safety hazards around them, their personal
obligations and acting accordingly;
Encouraging our employees and contractors
to collaborate and share learnings to
proactively prevent incidents;
Learning from incidents and strive to
continually improve our health and safety
performance;
Training our leaders to proactively lead
the improvement of our health and safety
performance;
Applying fit-for-purpose systems for our
operating environment and conditions; and
Complying with relevant statutory
requirements and industry standards.
Health and Safety Policy
Safety Performance Standards
The Safety Performance Standards describe the
minimum requirements of assets to manage
threats associated with specific activities or
tasks that have the potential to adversely affect
the safety of our employees and contractors. By
delivering a program of threat-and-opportunity-
based safety management, we aim to protect
the safety of our employees, contractors,
communities and any other parties undertaking
work at our assets – without compromise.
Governance and Management
Systems
OZ Minerals' Governance Structure is shown
on pages 16 -18. The Board of Directors, the
Chairman, CEO and Executive Committee are
responsible for the supervision and management
of our strategy. The strategic implementation
of our safety performance is overseen by the
Sustainability Committee of the Board.
The Audit Committee assists the Board of
Directors in fulfilling its responsibilities with
respect to financial reporting and disclosure,
internal and external audit processes and,
together with the Sustainability Committee, the
review of the risk management processes.
Management is responsible for implementing
management systems across the business. We
monitor their application and effectiveness
through internal and external audits. Training
and competency is part of the continuous
improvement process and detailed in the
Performance Standard.
Safety Performance
A foundation element of the Company strategy is safety, which underpins activities
across the business.
Our target is to achieve an injury and
occupational disease-free workplace by ensuring
that hazards are identified and managed at
the source. All safety incidents are thoroughly
investigated, learnings shared and corrective
actions implemented.
While at work, employees and contractors must:
•
•
•
Take reasonable care of their own health
and safety;
Ensure their behaviour or oversights do not
adversely affect the health and safety of
others; and
Comply with any reasonable instruction
from the OZ Minerals' management team
to ensure, as a minimum requirement,
employees and the business fulfil
relevant health and safety legislation and
regulations.
Active engagement from senior leadership teams,
combined with activities focused on identifying
and eliminating causes of incidents, has resulted
in a reduction in the number of recordable
workplace injuries in many OZ Minerals
departments. Safety statistics are reported for
the entire workforce, including employees,
contractors and visitors working on OZ Minerals’
sites. It has also improved the safety and
reporting culture. Employees and contractors are
empowered to cease operations, if necessary, to
ensure the safety of the workforce.
Statistics are calculated per one million working
hours. In 2016, the total recordable injury
frequency rate (‘TRIFR’) per million hours worked
increased from 5.30 in 2015 to 6.80. An increase
in recordable injuries in the underground mine
resulted in this rise. While underground mining
activity increased, there was an overall decrease
in hours worked due to reduced activity in
surface mining operations. The reduction in
hours is related to a drop in the average daily
number of people onsite in 2016. The lost time
injury frequency rate (‘LTIFR’) per million hours
worked increased from 0.99 to 1.07. There were
no permanent or serious disabling injuries in
2016. We enhanced our safety programs and are
committed to preventing work-related accidents,
injuries and illnesses. Our key safety programs
include: Site Safety Acceleration Program, Critical
Risk Program, Byrnecut Under Ground Safety
Improvement Program, Thiess Safety Essential
Program and the SANO's Wellbeing, Health and
Injury Prevention Program. OZ Minerals' lead
indicators are monitored to reduce workplace
hazards and injuries. Incidents with potential or
actual consequences are internally rated level
one to five, assessing the impact on safety,
health, environment, community and financial
metrics. This classification enables identification
of significant incidents that warrant an in-depth
review and analysis. Significant incidents are
those deemed to have potential or actual
consequences rated as level four or above or,
actual consequences rated as level four or above
for injury and illness incidents and, level three
and above for all other incident types. Potential
and actual significant safety incidents are
thoroughly investigated using the incident-cause-
analysis method.
Significant incidents and incident trends are
comprehensively reviewed by the Sustainability
Committee of the Board and others, to
ensure lessons are learnt, approved processes
are complied with and additional controls
implemented where necessary.
Safety performance
Employee fatalities
Contractor fatalities
TRIFR (employees and
contractors)
LTIFR (employees and
contractors)
Significant safety incidents1
(1) As defined by OZ Minerals internal classification.
0
0
6.80
1.07
71
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Safety
Programs and Leadership
Leadership and culture are fundamental to not only safety performance, but overall
business performance.
OZ Minerals has a number of initiatives to
continue to mature our safety culture as part
of holistic safety management. Effective safety
management involves providing a safe working
environment with supportive processes and
systems, empowering the competent workforce
to raise safety issues before there is potential for
an incident, thoroughly investigating incidents
when they occur and implementing controls
to prevent the likelihood of reoccurrence using
sound risk management practices. OZ Minerals
is focused on developing strong leaders and
safety leadership across the Company and with
our contracting partners. All employees and
contractors are empowered to cease operations if
necessary to ensure the safety of the workforce.
In 2016, safety programs were enhanced to
improve performance by focusing on identifying
and analysing incidents with potential for serious
consequences. Identification of root causes and
effective controls to prevent or mitigate events
has increased the number of incidents being
self-reported. Each area of the asset has its
own set of lead indicators measured monthly.
Potential and actual significant safety incidents
are investigated using the incident-cause-
analysis method, and review of incidents to
ensure learnings from these events are shared
and implemented.
A component of the Prominent Hill Site Safety
Acceleration program sees one Senior Leader
from each major company on site collaborate to
establish a common set of beliefs around safety,
and to set the standard and leadership intent.
As a part of risk management assessments, all
assets evaluate risks relevant to OZ Minerals’
Safety Performance Standards. Assets must
identify the critical controls used to manage
material risks, assess their adequacy, assign
accountability and responsibilities for their
implementation, and verify their effectiveness
as part of their critical control management.
Periodically, this verification is also conducted by
external experts.
Case Study: Critical
and Material Risk
Management
The Prominent Hill critical and material risk
management program focused on prevention of
fatalities and significant business disruptions at the
asset. Engagement sessions to identify the risks
were undertaken, and each risk was workshopped
by employees and contractors across the site to
produce a “Bowtie” risks analysis of each risk.
These Bowtie analyses identify contributing factors
that lead to a critical or material risk event and
the controls that are in place (preventative and
mitigating). Critical controls are being refined
and the critical control standards will allow
ongoing engagement of major contractors in the
assessment of compliance.
Contractor Management
OZ Minerals seeks to maintain long-term partnerships that develop mutual benefits
and repeatable performance.
OZ Minerals works with contractors and suppliers
to deliver projects. We rely in part on the
capability of contractors and suppliers who help
us to carry out our operations. Our management
system includes the requirements and practices
for working with contractors and suppliers.
Qualification and Performance
Major contractors have requirements in their
agreements consistent with the OZ Minerals'
Code of Conduct, policies and standards.
They must adhere to OZ Minerals’ values and
exhibit behaviour that ensures the safety of the
workforce.
All contractors are subject to a pre-qualification
process. Contractors may be comprehensively
evaluated against criteria including safety, health,
environment and community aspects as well risk
management, internal auditing processes and
employee management. Contractors may also
be assessed on their processes when evaluating
potential third party contract services.
Contractors are required to complete site
inductions to develop a clear understanding of
the requirements of working for the business.
All high-value, high-risk contractors must submit
a safety, health, environment and community
management plan that outlines the operational
controls in place to manage significant risks.
There are minimum performance criteria (safety
and environment) applied to contractors, plus
performance criteria (including operating
performance and site management) developed
and applied to each contract. Onsite contractors
must have an OZ Minerals' representative
managing their contract. This provides a direct
opportunity to maintain ongoing engagement
with respect to management.
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Safety
Training and Emergency
Preparedness
Trained and prepared teams are essential in effective operations and
emergency situations.
trained to respond to a number of incidents,
including injuries, fires, mass casualty, heights
rescue and vehicle rescue. They are also able to
respond to incidents in the local community such
as Coober Pedy. At the Carrapateena project,
the Emergency Response Team is coordinated by
our mining contractor PYBAR and includes OZ
Minerals employees.
OZ Minerals offers a wide range of development
opportunities, including formal programs,
technical and compliance training, online
learning and mentoring. This year, the OZ
Minerals workforce has undergone 12,709
hours of employee training, with the majority
of training aimed at our employees based at
Prominent Hill.
assets, environment or long-term prospects
and reputation. Sites each have a specific crisis
management plan that outlines the response to
be initiated in the event of a crisis.
Training events are regularly undertaken, with
the Prominent Hill Management Team and the
Corporate Crisis Management Team completing
one training simulation in 2016.
Corporate Crisis Management Team
Emergency Response Team
OZ Minerals’ crisis management plan outlines
the roles, responsibilities and processes that
the Corporate Crisis Management Team would
follow in the event of a crisis. The team includes
representatives covering operations, legal,
commercial, safety, environment, community,
media and government relations aspects of a
crisis event. OZ Minerals defines a crisis as an
event that seriously threatens people, operations,
OZ Minerals coordinates the emergency response
for Prominent Hill. The Emergency Response
Team comprise full-time emergency service
officers and full-time nurses. It also comprises
a large group of volunteers, which includes
employees and contractors working at Prominent
Hill. The team members volunteer their own time
for training and practice and are also on standby
when they are on site. The team members are
Case Study: South Australian Mine
Rescue Competition
In November, OZ Minerals participated in the annual South
Australian Mines Rescue Competition hosted by the South Australian
Chamber of Mines and Energy (SACOME). The competition invites
participation by mining emergency response teams to compete
against each other in a range of activities. OZ Minerals was
category-winner in rope rescue, team skills and breathing apparatus.
The Mines Rescue Competition is an opportunity for mine
rescue teams across the State to hone their skills and share their
knowledge with other emergency responders. It also strengthens
the relationships between the emergency response teams, giving
greater confidence in the ability to offer mutual aid in the event of
a serious emergency.
Safety and Technology
OZ Minerals believes that through innovative technology solutions, a step change
in safety performance can occur.
OZ Minerals completed the Carrapateena
pre-feasibility study during 2016. A focus in
this study is a new generation copper mine
of interconnected people, equipment and
operations featuring seamless communications
throughout.
Incorporation of latest proven technologies
will allow remote monitoring and control,
autonomous operations and new possibilities for
risk reduction, safety improvement, productivity
enhancement, process optimisation and
equipment utilisation that will come from the
next wave of technology.
For example, all personnel, mobile equipment
and key fixed plant will be digitally tagged and
have advanced communications technology
to allow transmission of current operating
conditions and locations. This access to data
and the enabled level of control will improve
safety as personnel and equipment monitoring
will enable a reduced interaction risk. There
will also be instantaneous monitoring of
the environment to provide improved work
conditions and monitoring of lone workers.
Reliable communications and equipment location
information will enable an increased reliance
on remote and autonomous operations to
significantly reduce personnel exposure hazard
and operational downtime. Other benefits
include improved safety environment, higher
productivity and an improved unit cost.
Awards
The Statewide Super Innovation in Resources Award:
Awarded for the Hydromet (Concentrate Treatment Plant) technology that uses a new
flowsheet arrangement to upgrade iron ore copper gold minerals concentrates and remove
impurities, for a high grade copper product that will also substantially reduce export
costs. The innovation has positive implications for the Carrapateena project, together with
potential application for other copper developers.
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Case Study: South Australian Mine
Rescue Competition
Health and
Wellbeing
Health & Wellbeing
Management
Approach
The health and wellbeing of our employees and local community is a priority for
OZ Minerals.
Integrating diversity and inclusion into the
way we work;
Health and Wellbeing
Performance Standards
•
•
•
Developing an inclusive work environment
regardless of age, gender, race, national
or ethnic origin, cultural background,
experience, social group, marital status,
religion, language, political beliefs, sexual
orientation and physical ability; and
Providing appropriate levels of training,
development and mentoring to ensure our
employees and contractors understand and
promote a diverse and inclusive workplace.
Ethics and Human Rights Policy
The Ethics and Human Rights Policy helps
protect the human rights of our stakeholders and
prevent human rights breaches. OZ Minerals is
committed to:
•
•
•
•
Respecting the right of our employees and
contractors to freedom of association and
collective bargaining;
Fostering and maintaining a work
environment that is free from harassment
and unlawful discrimination;
Not tolerating any reprisals, discrimination,
harassment, intimidation or victimisation
against any person suspected of making a
report of unacceptable conduct; and
Conducting appropriate due diligence
before engagement to ensure third party
agents and contractors operate with strong
ethical and moral standards.
The Health and Wellbeing Performance Standards
describe the minimum requirements of OZ
Minerals assets to manage threats associated
with specific activities or tasks, identify
opportunities that have the potential to drive
value creation for OZ Minerals and to protect and
promote the health, safety and wellbeing of our
employees and contractors, and the sustainability
of the workplace.
Governance and Management
Systems
OZ Minerals' Governance Structure is shown
on pages 16 -18. The Board of Directors, the
Chairman, CEO and Executive Committee are
responsible for the supervision and management
of our strategy. The strategic implementation
of our health and wellbeing performance is
overseen by the Sustainability Committee of the
Board.
The Audit Committee assists the Board of
Directors in fulfilling its responsibilities with
respect to financial reporting and disclosure,
internal and external audit processes and,
together with the Sustainability Committee, the
review of risk management processes.
Management is responsible for implementing
management systems across the business. We
monitor their application and effectiveness
through internal and external audits. Training
and competency is part of the continuous
improvement process and detailed in the
Performance Standard.
OZ Minerals is committed to high standards of
health and wellbeing among our employees
and contractors, and is focused on leadership,
a supportive workplace culture, building
capabilities, implementing prevention controls
and promoting the return to work of affected
individuals. OZ Minerals has three policies
that guide our approach towards health and
wellbeing.
Health and Safety Policy
The Health and Safety Policy demonstrates
a commitment to strive to be an injury and
occupational disease free workplace whilst
achieving operational excellence. OZ Minerals is
committed to:
•
•
•
•
Developing a culture where our employees
and contractors are aware of the safety
hazards around them and their personal
obligations, and act accordingly;
Learning from incidents and striving to
continually improve our health and safety
performance;
Training our employees and contractors to
proactively identify and manage health and
safety risks; and
Training our leaders to proactively lead
the improvement of our health and safety
performance.
Diversity and Inclusion Policy
The Diversity and Inclusion Policy fosters a culture
that values individual differences and further
leverages these to deliver optimal outcomes for
OZ Minerals. We are committed to:
Left: The Prominent Hill village offers health and
fitness sport facilities for our teams at Prominent
Hill, including a 25-metre swimming pool (photo)
and a cardio and weight gymnasium.
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Health & Wellbeing
Workforce
Engagement
One of our principles of how we work together is to build a culture of respect that
enables our people to succeed.
OZ Minerals’ company strategy sets out
the principles of how we work together. By
demonstrating these principles, we enable
growth, innovation and collaboration as
we take further steps to become a modern
mining company. The interrelation between
physical, mental, emotional and social health
on the overall wellbeing of our employees and
contractors provides the platform for programs
to support improved engagement and alignment
across the organisation.
All employees have performance indicators that
are linked to the company strategy. OZ Minerals
offers an array of benefits to our employees.
These include performance based incentive plans,
career development opportunities, paid parental
leave and health and wellbeing services such as
health insurance, medical check-ups and health
education programs.
During 2016, a targeted campaign was
undertaken to ensure long-term employees of
OZ Minerals took annual leave, which saw the
average accrued number of annual leave days
owing to employees at the end of the year
reduce by 25 per cent over the course of the year.
A strong workplace culture is a key driver in
the health and wellbeing of employees. During
2016, OZ Minerals focused on alignment of
the organisation to the company strategy. This
campaign helped build a shared vision and
sense of community across the organisation.
With the introduction of Teamgage - an online
survey tool - OZ Minerals will be able to monitor
and measure strategic alignment and cultural
development.
Case Study: OZ Connect, Technology for
Collaboration
In 2016, OZ Minerals completed the first stage of the OZ Connect project, which saw the
roll out of new hardware devices, upgrades to the latest Office 365 suite of programs and
a transition to cloud server operation. This was the first step in the Company’s journey,
not only to become agile and lean in our business processes, but to improve the ability for
employees to collaborate and share ideas across the organisation wherever they may be
working. The introduction of Skype for business, yammer and external social media platforms
such as LinkedIn and Facebook has not only improved the ability for employees to be
engaged across assets, but for employees to communicate externally with family and friends.
Case Study: Family Days
This year saw the much-loved return of the Prominent Hill and Carrapateena family days
onsite. Family days are organised to gain a better understanding of site life, conditions and
the environment in which family members work. Prominent Hill is a 24-hour/365-day FIFO
operation, so employees will be onsite when workers in other industries are at home. In
recognition of this, 150 family members and partners this year had the opportunity to come
to the site and share Christmas Day celebrations. The day included trips out to the mine site
with the opportunity to see a mining truck, sing Christmas carols, enjoy a special Christmas
menu at the mess, and receive a visit from Santa.
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Health & Wellbeing
Diversity and
Inclusion
Fostering a diverse and inclusive workforce results in a better workplace for
employees and a better organisation overall.
Women comprise 20 per cent of the workforce
directly employed by OZ Minerals. Some
individual contributors and functional leadership
areas have more than 27 per cent female
representation. OZ Minerals offers competitive
remuneration for employees, reflective of the
type of job, years of experience and the length of
time employees have held the position. Earnings
are reviewed annually by gender and job band
level to provide assurance that employees’
remuneration remains equitable and in line with
market trends.
All employees are entitled to parental leave. In
2016, seven female employees took parental
leave and four returned to work after their
Diversity chart
parental leave ended. A retention rate of 57 per
cent was maintained after 12 months.
With regards to labour relations, 31.7 per cent
of the total workforce is covered by collective
bargaining agreements.
Inclusion for us means to bring together
workforce diversity as a source of strength, which
helps us to innovate and do things differently.
We agree that it is not only about creating
visible differences in the workforce but, most
importantly, seeking the strategic advantage
that comes from incorporating a wide variety of
capabilities, new ideas and insights in problem
solving and decision making.
Workforce Profile
At the end of 2016, the workforce, including
contractors, stood at 1,302. OZ Minerals
directly employs 303 people. 75 per cent of our
workforce lives in South Australia.
As the open pit at Prominent Hill gets deeper
and the amount of waste rock relative to the
amount of ore continues to decrease, the space
in which the equipment can move is reducing.
This means that less equipment and people are
required for mining by OZ Minerals open pit
mining contractor, Thiess. As demobilisations
of fleets occur, OZ Minerals has kept workers
updated throughout the process.
Profile 2016
Full time
Part time
Fixed term
Casual
Employees
Contractors
Workforce
Region
SA
M
216
F
47
M
0
F
5
M
20
F
6
M
5
F
4
Total
M
303
889
F
110
Total
999
New employees 2016
Age group <36
Age group 36-55
Age group >55
Region
SA
M
10
F
7
M
15
F
11
M
3
F
1
Turnover 2016
Age group <36
Age group 36-55
Age group >55
Region
SA
Victoria
M%
8%
F%
2%
100%
100%
M%
12%
100%
F%
29%
100%
M%
7%
100%
F%
13%
100%
Total
1,302
Total
47
Total
11%
100%
Employee diversity
at OZ Minerals
Under 30 years old
30-50 years old
Over 50 years old
Female
Indigenous
%
100
80
60
40
20
0
Business and
Functional Leadership
Department Managers
Superintendents
/ Senior Specialists
Tertiary / Supervisor
Individual contributors
Awards
Awards
Women in Resources:
OZ Minerals has been nationally recognised with Jasmine Richards, our now Environment
and Community Superintendent at Prominent Hill, being announced as the winner of
the ‘Exceptional Young Woman in Australian Resources Award’ at the National Women in
Resources Awards ceremony.
Industry Collaboration Award / Australian Training Awards:
OZ Minerals, along with representatives from TAFE SA and Thiess, were awarded the
“Industry Collaboration Award” at the SA Training Awards. We developed accredited
training for industry-based competencies to upskill OZ Minerals’ Prominent Hill mine team
to broaden their employability beyond the mine’s operation. The Partnerships, People and
Production training program links the skills and experience obtained through on-the-job
training with a nationally accredited qualification that supports the transfer of skills across
industries and sectors to meet future skills and labour demands.
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New employees 2016
Age group <36
Age group 36-55
Age group >55
Total
Turnover 2016
Age group <36
Age group 36-55
Age group >55
Total
Health & Wellbeing
Business Ethics
OZ Minerals’ Board of Directors is committed to fostering a culture of compliance,
ethical behaviour and good corporate governance.
opportunity program, ethics and conduct
program, as well as an anti-harassment and
bullying program. Each program includes
awareness training based on site-specific needs.
Employee Assistance Program
Mental Health is one of the main health risks
that continues to be a concern across the
mining industry. OZ Minerals offers an employee
assistance program (EAP) for professional,
confidential counselling to all employees and
contractors and their immediate family members,
at no cost. The EAP is provided through a
leading global health and wellness company and
can help address work and/or personal issues
through a network of accredited counsellors.
OZ Minerals has a variety of programs to
promote a culture of compliance and ethical
business. The Code of Conduct defines our
corporate guidelines and establishes procedures
that allow the reporting of policy or business-
related violations.
Code of Conduct
OZ Minerals’ Code of Conduct applies standards
for appropriate ethical and professional
behaviour. The Code of Conduct applies to and
is mandatory for all our employees, directors,
officers, and contractors of OZ Minerals and its
subsidiaries. The Code of Conduct outlines the
requirement for a wide range of business related
situations, including:
•
•
•
•
•
•
•
•
•
Compliance with the law;
Protection of OZ Minerals’ interests;
Conflict of interest;
Gifts, entertainment and gratuities;
Professional behaviour and fair dealing;
Health and safety;
Community and environment;
Reporting non-compliance; and
Anti-bribery and corruption.
Whistleblower and Reporting
Violations
The Code of Conduct, the highest order of
corporate governance, outlines the importance
of - and OZ Minerals’ commitment to -
maintaining an open working environment
in which employees and contractors are able
to report instances of unethical, unlawful or
undesirable conduct without fear of intimidation
or reprisal. OZ Minerals has appointed STOPline
as the disclosure line for concerns relating to
unacceptable conduct. STOPline ensures best
practice and the highest level of independence,
as well as impartiality and confidentiality in the
receipt and management of concerns relating to
unacceptable conduct. STOPline offers a simple
and highly confidential solution to the difficult
issues of ethics, compliance, risk management
and corporate governance.
Ethical Conduct Training Courses
Our mandatory online training courses reinforce
our Code of Conduct and the information in our
policies. We provide training and education on
key legal and ethical risk areas. OZ Minerals'
employees enrol in online learning courses
that include OZ Minerals’ equal employment
Health and Wellbeing
Programs
We want to provide a great place for our employees to work, succeed and grow as
individuals.
OZ Minerals seeks to make a positive impact on
employees’ health and wellbeing, both at work
and at home. A series of programs are in place to
promote, maintain and enhance a healthy lifestyle.
Fitness for Work
OZ Minerals conducts a fitness-for-work program,
including a wide range of activities and education
in fatigue management, employee assistance
programs, role-based assessments, ergonomic
assessments, fitness, and drug and alcohol programs.
The intent of all programs is to provide employees
with the necessary education and information to
self-manage their own fitness-for-work. OZ Minerals
has a zero alcohol and drug policy at all operations.
Medical Programs
All OZ Minerals sites are supported by onsite
trained medical staff. At Prominent Hill, there are
also two health and lifestyle coordinators who run
gym sessions and fitness programs. Doctors run a
clinic on site once a month, and a physiotherapist
is available on site once a week to assess work and
non-work practices.
Due to the location of sites and the risk of exposure
to heat stress, employees are regularly tested
for adequate hydration. Additional medical and
occupational exposure management programs
include, but are not limited to, audiometric testing,
inhalable dust monitoring, diesel particulate
monitoring and wet bulb thermometer works.
These programs are focused on ensuring employees
are not subject to occupational exposures above
recognised and accepted industry standards, and to
ensure appropriate provision of personal protective
equipment is provided and used.
Rehabilitation and Return
to Work
OZ Minerals maintains a rehabilitation and return to
work program. There has been one workplace claim
in 2016 and three employees have returned to work
following continued support for rehabilitation efforts.
Case Study: Skin Screening Assessments
Skin Cancer Screening conducted for OZ Minerals Prominent Hill saw 124 staff participate, with an average age of
38.8 years. Of the 124 staff screened, there were eight referred for a follow up and no staff required an urgent follow
up. This equates to approximately 6.4 per cent of staff requiring further examination or management of skin incidents.
This program demonstrates OZ Minerals’ proactive commitment to the general health and wellbeing of our employees.
Case Study: SANO’s Wellbeing Health
and Injury Prevention Program
SANO Health, in partnership with OZ Minerals, sends physiotherapists and exercise physiologists to site every three weeks.
They are working directly with the Prominent Hill medical and emergency services team to improve the overall health and
wellbeing of the site, as well as assisting to reduce injury and absenteeism rates. As part of their onsite education sessions,
they have been able to reach all work groups and contractors and explain the health risk assessments in detail, the effects of
living a sedentary lifestyle, the importance of nutrition and hydration, as well as sleep and recovery advice.
There have been more than 150 participants in the program, with assessments including blood analysis and an online health
survey. As part of reducing injury rates onsite, all groups complete a Daily Injury Prevention routine. Videos are created by the
representative, demonstrated and then given to the crew to perform each day. While onsite the SANO Health representatives
provide time for one-on-one meetings, as well as individual programs based on each individual’s requirements.
113
Assurance Statement
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent Limited Assurance Report to the
Management and Directors of OZ Minerals Limited
(‘OZ Minerals’) in relation to the 2016
Sustainability Report
To the Management and Directors of OZ Minerals:
We have carried out a limited assurance engagement in order to
state whether anything has come to our attention that causes us
to believe that the subject matter detailed below (‘Subject Matter’),
and as presented in the 2016 Sustainability Report (‘the Report’),
has not been reported and presented fairly, in all material
respects, in accordance with the criteria (‘Criteria’) below.
Subject Matter
The Subject Matter for our limited assurance engagement
included:
► Material non-financial sustainability disclosures in OZ
Minerals’ 2016 Sustainability Report listed in Table 1
Table 1: Selected Material Topics
Assurance Practitioner’s Responsibility
Our responsibility is to express a limited assurance conclusion on
the Subject Matter based on our assurance engagement
conducted in accordance with the Australian Auditing and
Assurance Standards Board Australian Standard on Assurance
Engagements Other Than Audits or Reviews of Historical
Financial Information (‘ASAE 3000’)] and the terms of reference
for this engagement as agreed with OZ Minerals.
Our procedures were designed to obtain a limited level of
assurance on which to base our conclusion, and, as such, do not
provide all of the evidence that would be required to provide a
reasonable level of assurance. The procedures performed depend
on the assurance practitioner’s judgement including the risk of
material misstatement of the Subject Matter, whether due to fraud
or error. While we considered the effectiveness of management’s
internal controls when determining the nature and extent of our
procedures, our assurance engagement was not designed to
provide assurance on internal controls.
Our procedures did not include testing controls or performing
procedures relating to checking aggregation or calculation of data
within IT systems, which would have been performed under a
reasonable assurance engagement.
Selected Material Topics
GRI Standard
Energy and Emissions
302 and 305
We believe that the assurance evidence we have obtained is
sufficient and appropriate to provide a basis for our limited
assurance conclusions.
Local Communities
Occupational Health and Safety
413
403
► Disclosures associated with alignment to the GRI Reporting
Principles for defining sustainability content of stakeholder
inclusiveness, sustainability context, materiality and
completeness
► Disclosures associated with alignment to the GRI Reporting
Principles for defining report quality of accuracy, balance,
clarity, comparability, reliability and timeliness.
The Subject Matter did not include:
► Data sets, statements, information, systems or approaches
other than the Selected Material Topics and related
disclosures
► Management’s forward looking statements
► Any comparisons made against historical data.
Criteria
The following criteria have been applied:
Summary of Procedures Undertaken
Our procedures included, but were not limited to:
► Conducting interviews with key personnel to understand the
process for collecting, collating and reporting information on
the Selected Material Topics during the reporting period
► Checking that the calculation criteria have been applied in
accordance with the methodologies outlined in the Criteria
► Undertaking analytical review procedures to support the
reasonableness of the data
► Identifying and evaluating assumptions supporting
calculations
► Considering, on a sample basis, underlying source
information to check the accuracy of the data.
Use of our Limited Assurance Engagement Report
We disclaim any assumption of responsibility for any reliance on
this assurance report, or on the Subject Matter to which it relates,
to any persons other than management and the Directors of OZ
Minerals or for any purpose other than that for which it was
prepared.
► Company-specific definitions that are publically disclosed
Independence and Quality Control
► The Global Reporting Initiative’s (GRI) Reporting Principles as
defined in the GRI 101: Foundation 2016 Standard
► Definitions as per selected GRI Standards related to the
material sustainability topics.
Management’s Responsibility
The management of OZ Minerals is responsible for the
preparation and fair presentation of the Subject Matter in
accordance with the Criteria, and is also responsible for the
selection of methods used in the Criteria. No conclusion is
expressed as to whether the selected methods are appropriate for
the purpose described above. Further, OZ Minerals’ management
is responsible for establishing and maintaining internal controls
relevant to the preparation and presentation of the Subject Matter
that is free from material misstatement, whether due to fraud or
error; selecting and applying appropriate criteria; maintaining
adequate records and making estimates that are reasonable in
the circumstances.
In conducting our assurance engagement, we have met the
independence requirements of the APES 110 Code of Ethics for
Professional Accountants. We have the required competencies
and experience to conduct this assurance engagement.
Limited Assurance Conclusion
Based on the limited assurance procedures conducted, nothing
has come to our attention that causes us to believe that the
Subject Matter for the year ended 31 December 2016, have not
been reported and presented fairly, in all material respects, in
accordance with the Criteria.
Ernst & Young
Melbourne, Australia
16 March 2017
Terence Jeyaretnam
Partner
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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115
Resources and
Reserves 2016
OZ Minerals’ Mineral Resources and Ore Reserves
The 2016 Mineral Resources and Ore Reserves of OZ Minerals are summarised in the table below along with the 2015 Ore Reserves and Mineral Resources
for comparison.
Tonnes
Mt
Cu%
2016
Au
g/t
Ag
g/t
Cu
kt
Au
Moz
Ag
Moz
Tonnes
Mt
Cu%
Resources
Prominent Hill
Carrapateena
Khamsin
Total
Reserves
Prominent Hill
Carrapateena
Total
172
134
0
307
75
70
145
1.0
1.5
0.0
1.2
1.0
1.8
1.4
0.7
0.6
0.0
0.6
0.6
0.7
0.7
2.7
1,770
6.5 1,970
0.0
0
4.4 3,740
3.0
8.4
740
1,300
5.6 2,040
3.7
2.6
0
6.3
1.4
1.7
3.1
15
28
0
43
7.1
19
26
179
800
202
1,180
73
270
343
1.0
0.8
0.6
0.8
1.0
0.9
0.9
2015
Ag
g/t
2.6
3.3
1.7
2.9
2.9
4.5
4.2
Au
g/t
0.7
0.3
0.1
0.3
0.6
0.4
0.4
Cu
kt
Au
Moz
Ag
Moz
1,800
6,300
1,100
3.9
8.4
0.9
15
84
11
9,200
13.2
110
720
2,500
3,220
1.4
3.5
4.9
7.0
39
46
Table subject to rounding errors.
Information in the table above was drawn from the following:
Deposit
Prominent Hill
Prominent Hill
Carrapateena
Carrapateena
Khamsin
Prominent Hill
Prominent Hill
Carrapateena
Carrapateena
Mineral Resources 2015
Mineral Resources 2016
Mineral Resources 2013
Mineral Resources 2016
Mineral Resources 2015
Ore Reserves 2015
Ore Reserves 2016
Ore Reserves 2014
Ore Reserves 2016
Estimate date
30 June 2015
1 July 2016
30 June 2013
17 October 2016
23 March 2015
30 June 2015
1 July 2016
15 August 2014
20 October 2016
Release date
4 November 2015
15 November 2016
28 November 2013
7 November 2016
26 May 2015
4 November 2015
15 November 2016
18 August 2014
7 November 2016
All Mineral Resources and Ore Reserves are estimates. The Mineral Resource and Ore Reserve statements and their accompanying explanatory notes can be
viewed in full at: www.ozminerals.com/operations/resources--reserves.html.
Prominent Hill 2016 Mineral Resources and Ore Reserves
The Prominent Hill Mineral Resources and Ore Reserves remain robust with the majority of changes due to mining depletion.
The Prominent Hill Mineral Resource as at 1 July 2016 has been estimated at 172 million tonnes of copper-gold mineralisation grading 1.0 percent copper,
0.7 grams per tonne gold and 2.7 grams per tonne silver. The Mineral Resource contains 2% fewer copper tonnes and 5% fewer gold ounces than the
previous Mineral Resource estimate.
Open Pit Mineral Resources
•
The Open Pit Mineral Resource decreased mainly due to mining depletion.
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Resources and Reserves 2016
Ankata Mineral Resources
The Ankata Mineral Resource decreased mainly due to mining depletion.
•
Malu Underground Mineral Resources
The Malu Underground Mineral Resource increased with depletion more than offset by success in drilling.
•
Kalaya Mineral Resources
There is no current exploration or mining at Kalaya. There was a small change in the Mineral Resource due to a change of cut-off grade.
•
Stockpiles
•
Copper ore stockpiles to 30 June 2016 increased from 3 million tonnes to 7 million tonnes and gold ore stockpiles increased from 11 million tonnes to
13 million tonnes.
Copper Mineral Resources at Prominent Hill - July 2016
Category
Open Pit (1) – 0.25% Cu cut-off
Measured
Indicated
Inferred
Total
Malu (2) – $60 NSR cut-off
Measured
Indicated
Inferred
Total
Kalaya (3) – $60 NSR cut-off
Measured
Indicated
Inferred
Total
Ankata (4) – $60 NSR cut-off
Measured
Indicated
Inferred
Total
Surface Stocks
Measured
Total
Measured
Indicated
Inferred
Total
Tonnes
(Mt)
10
10
0
20
22
26
34
82
0
1
30
31
7
0
0
8
7
46
37
64
148
Cu
(%)
1.2
1.1
0.8
1.1
1.4
1.1
1.1
1.2
0.0
1.1
1.0
1.0
2.2
1.0
1.2
2.1
Au
(g/t)
Ag
(g/t)
0.5
0.6
0.4
0.6
0.5
0.7
0.6
0.6
0.0
0.5
0.5
0.5
0.4
0.6
0.1
0.4
3.6
2.5
2.5
3.1
3.6
2.8
3.0
3.1
0.0
2.0
1.9
1.9
4.3
1.0
3.0
4.2
Cu
(kt)
120
100
2
220
310
290
390
990
0
14
310
320
160
1
5
170
Au
(Moz)
Ag
(Moz)
0.2
0.2
0.0
0.4
0.3
0.6
0.7
1.6
0.0
0.0
0.5
0.5
0.1
0.0
0.0
0.1
1.2
0.8
0.0
1.9
2.5
2.4
3.3
8.2
0.0
0.1
1.8
1.9
1.0
0.0
0.0
1.1
0.7
0.4
2.4
52
0.1
0.5
1.4
1.1
1.1
1.2
0.5
0.7
0.6
0.6
3.5
2.7
2.5
2.9
640
410
700
1,750
0.7
0.8
1.2
2.6
5.2
3.2
5.2
13.6
Table subject to rounding errors. (1) Within the final pit design. (2) Outside the final pit design and east of 55300mE. (3) Outside the final pit design and west of 55300mE (excluding Ankata Mineral
Resource estimate). (4) Ankata Mineral Resource estimate.
Gold Mineral Resources at Prominent Hill - July 2016
Cu
(%)
0.0
0.1
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.1
0.1
0.0
0.0
0.0
0.0
Au
(g/t)
Ag
(g/t)
Cu
(kt)
Au
(Moz)
Ag
(Moz)
1.2
1.0
1.2
1.0
0.0
2.6
2.1
2.4
0.0
0.0
2.0
2.0
0.0
0.0
0.0
0.0
1.7
1.3
1.0
1.3
0.0
0.9
0.8
0.9
0.0
0.0
0.6
0.6
0.0
0.0
0.0
0.0
0
1
0
1
0
0
0
1
0
0
3
3
0
0
0
0
0.0
0.1
0.0
0.1
0.0
0.2
0.1
0.3
0.0
0.0
0.3
0.3
0.0
0.0
0.0
0.0
0.0
0.1
0.0
0.1
0.0
0.1
0.0
0.1
0.0
0.0
0.1
0.1
0.0
0.0
0.0
0.0
Category
Tonnes
(Mt)
0
2
0
2
0
2
2
4
0
0
5
5
0
0
0
0
Open Pit (5) – 0.5 g/t Au cut-off Below 0.25% Cu
Measured
Indicated
Inferred
Total
Malu (6) – $60 NSR cut-off
Measured
Indicated
Inferred
Total
Kalaya (7) – $60 NSR cut-off
Measured
Indicated
Inferred
Total
Ankata (8) – $60 NSR cut-off
Measured
Indicated
Inferred
Total
Surface Stocks
Measured
Total
Measured
Indicated
Inferred
Total
13
0.1
0.7
2.3
14
0.3
1.0
13
4
7
25
0.1
0.0
0.0
0.1
0.7
1.8
2.0
1.3
2.3
1.1
0.6
1.6
14
2
3
19
0.3
0.2
0.5
1.0
1.0
0.2
0.1
1.3
Table subject rounding errors. (5) Within the final pit design. (6) Outside the final pit design and east of 55300mE. (7) Outside the final pit design and west of 55300mE (excluding Ankata Mineral
Resource estimate). (8) Ankata Mineral Resource estimate.
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Resources and Reserves 2016
Prominent Hill Ore Reserves
The Ore Reserves at 1 July 2016 were estimated to be 75 million tonnes at 1.0 percent copper and 0.6 grams per tonne gold for 740 thousand tonnes of
contained copper and 1.4 million ounces of contained gold. The 2016 Ore Reserve contains 3% more copper tonnes than the previous Mineral Resource
estimate.
Open Pit Ore Reserves
The Ore Reserves decreased due to mining.
•
Ankata Ore Reserves
The Ore Reserves decreased due to mining.
•
Malu Underground Ore Reserves
•
The Ore Reserves increased due to drilling success, design review and a change in cut-off grade despite mining depletion.
Summary of the Ore Reserves at Prominent Hill - July 2016
Category
Open Pit
Proved
Probable
Total
Ankata
Proved
Probable
Total
Malu / Kalaya
Proved
Probable
Total
Stockpiles
Proved
Surface Stocks
Measured
Tonnes
(Mt)
10
12
22
6
0
6
13
14
27
Cu
(%)
1.1
0.8
0.9
2.1
0.9
2.0
1.5
1.1
1.3
Au
(g/t)
0.5
0.7
0.6
0.4
0.7
0.4
0.5
0.8
0.6
Ag
(g/t)
3.6
2.3
2.9
3.9
0.6
3.9
3.8
2.8
3.3
Cu
(kt)
110
92
200
120
0
120
200
160
350
Au
(Moz)
Ag
(Moz)
0.2
0.2
0.4
0.1
0.0
0.1
0.2
0.3
0.5
1.2
0.9
2
0.8
0.0
0.8
1.6
1.2
2.8
20
0.3
0.6
2.3
66
0.4
1.5
Prominent Hill all mining areas
Proved
Probable
Total
Table subject to rounding errors.
49
25
75
1.0
1.0
1.0
0.5
0.7
0.6
3.2
2.6
3.0
490
250
740
0.8
0.6
1.4
5.0
2.1
7.1
Material changes in the Prominent Hill Mineral Resources and Ore Reserves
Statement.
OZ Minerals is not aware of anything that materially affects the information contained in the Prominent Hill Mineral Resources and Ore Reserves Statement,
1 July 2016 other than changes due to depletion since 1 July 2016. Depletion for the six months to 31 December 2016 amounts to approximately 4.7
million tonnes at 1.4% Cu, 0.5 g/t Au and 3.8 g/t Ag.
Competent Persons’ Statements Prominent Hill Mineral Resources & Ore Reserves
The information set out in these tables is a summary of information relating to Prominent Hill Mineral Resources and Ore Reserves set out in the document,
Prominent Hill Mineral Resources and Ore Reserves Statements and Explanatory Notes as at 1 July 2016, which was released to the market on 15 November
2016 and is available at www.ozminerals.com/operations/resources--reserves.html.
The information in this report that relates to Mineral Resources is based on and fairly represents information and supporting documentation compiled by
Colin Lollo, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM Membership No. 225331). Colin Lollo is
a full time employee of OZ Minerals Limited. He is a shareholder in OZ Minerals Limited and is entitled to participate in the OZ Minerals Performance Rights
Plan.
Colin Lollo BSc (Geology) has over 19 years of relevant experience as a geologist including nine years in Iron-Oxide-Copper-Gold style deposits.
Colin Lollo has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’ (JORC 2012). Colin Lollo consents to the inclusion in the report of the matters based on his information in the form and
context in which they appear.
The Mineral Resource estimate has been reported in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).
The information in this report that relates to the open pit Ore Reserves is based on and fairly represents information and supporting documentation
compiled by Michael Wood BEng (Min), a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM Membership
No. 225408).
Michael Wood is a full time employee of OZ Minerals Limited. Michael Wood is a shareholder in OZ Minerals Limited and is entitled to participate in the OZ
Minerals Performance Rights plan.
Michael Wood has over 10 years of experience as a mining engineer including five years in Iron Oxide Copper Gold style deposits. He has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activities being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the
JORC Code). Michael Wood consents to the inclusion in the report of the matters based on his information in the form and context in which they appear.
The information in this report that relates to the underground Ore Reserves is based on and fairly represents information and supporting documentation
compiled by Luke Sandery BEng (Min), a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM Membership
No. 212082).
Luke Sandery is a full time employee of OZ Minerals Limited. Luke Sandery is a shareholder in OZ Minerals Limited and is entitled to participate in the OZ
Minerals Performance Rights plan.
Luke Sandery has over 10 years of experience as a mining engineer including five years in Iron Oxide Copper Gold style deposits. He has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activities being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the JORC Code. Luke Sandery consents to the inclusion in the report of the matters based on his
information in the form and context in which they appear.
The Ore Reserve estimates have been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).
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Carrapateena Mineral Resources and Ore Reserves and Khamsin Mineral Resources
The complete Carrapateena Mineral Resource and Ore Reserve statements can be found at: www.ozminerals.com/operations/resources-reserves.html.
Carrapateena Mineral Resources
There have been four Mineral Resources estimated for Carrapateena by OZ Minerals. These are:
Year
2013
2015
2016
2016
Classification
Tonnes (Mt)
Cu %
Estimate Date
Release Date
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
356
444
800
55
6
61
126
7
133
61
65
8
134
1.0
0.6
0.8
2.4
2.5
2.4
1.5
1.0
1.5
1.4
1.6
0.8
1.5
30 June 2013
28 November 2013
25 September 2015
6 October 2015
17 October 2016
7 November 2016
18 November 2016
9 December 2016
Table subject to rounding errors. (1) Based on 0.3 percent copper cut-off grade
The 2013 Mineral Resource estimate was included in OZ Minerals’ total Mineral Resource statement in the 2015 Annual Report despite the declaration
of the 2015 Mineral Resource. This was done because the Carrapateena Ore Reserve current at that time (but now superseded) was based on the 2013
Mineral Resource estimate.
The 2015 Mineral Resource estimate was to form the basis of a high grade sub-level open stoping mine. The scoping study conducted in 2016 confirmed
that the best mining method for Carrapateena was sub-level caving. Consequently, on 7th November 2016 the 2015 Mineral Resource estimate was
superseded by a Mineral Resource estimate more appropriate to the sub-level caving mining method. It was this Mineral Resource estimate on which the
current Ore Reserve estimate is based. The Ore Reserve was one of the primary outputs of the Prefeasibility Study conducted in 2016.
A diamond drilling program was conducted in parallel with the Prefeasibility Study to upgrade some of the Mineral Resource to Measured status. On 9th
December 2016 a new Mineral Resource was released which incorporated the results of the additional drilling. Timing was such that it was not possible to
incorporate the new Mineral Resource estimate in the Prefeasibility Study.
Carrapateena Mineral Resources – 18 November 2016 (1)
Classification
Measured
Indicated
Inferred
Total
Tonnes
(Mt)
61
65
8
134
Cu
(%)
1.4
1.6
0.8
1.5
Au
(g/t)
0.6
0.6
0.4
0.6
Ag
(g/t)
6.3
7.0
3.5
6.5
Cu
(Mt)
880
1,030
60
1,970
Au
(Moz)
1.2
1.3
0.1
2.6
Ag
(Moz)
12.4
14.7
0.9
27.9
Table subject to rounding errors. (1) All material, whether mineralised or not, contained in a reasonable prospects shape designed at a cut-off of A$70/t NSR
Khamsin Mineral Resources
The Khamsin Iron Oxide Copper Gold (IOCG) deposit is located 10 kilometres north-west of Carrapateena. Khamsin was discovered in late 2012.
The initial Mineral Resource for Khamsin was based on 30 holes (including eight wedged holes) drilled since discovery and is summarised in the table below.
Holes were diamond drill holes spaced approximately 100 metres apart. The assessment of the prospects for extraction of the Khamsin Mineral Resource
were deemed reasonable with the accompanying economies of scale, when the Carrapateena deposit was designed as a block cave and forecast to be
processed at 12 Mtpa. However with recent developments at Carrapateena now focusing on a 4 Mtpa processing plant, OZ Minerals has taken the decision
to re-assess the Khamsin target and consequently a Mineral Resource will no longer be stated.
Carrapateena Ore Reserves
A Pre-Feasibility Study for Carrapateena based on mining by sub-level caving was completed in 2016 and demonstrated a positive economic outcome at
which time an Ore Reserve was declared. The Ore Reserve estimate was based on the Mineral Resource estimate as at 17 October 2016.
Carrapateena Ore Reserves as at 20 October 2016
Classification
Proved
Probable
Total
Tonnes
(Mt)
0
70
70
Cu
(%)
0.0
1.8
1.8
Au
(g/t)
0.0
0.7
0.7
Ag
(g/t)
0.0
8.4
8.4
Cu
(Mt)
0
1,300
1,300
Au
(Moz)
0
1.7
1.7
Ag
(Moz)
0
19
19
Table subject to rounding errors. (1) Based on $100 NSR cut-off grade.
Material changes in Carrapateena Mineral Resources and Ore Reserves and
Khamsin Mineral Resources
OZ Minerals confirms that it is not aware of any new information or data that would materially affect the Carrapateena Mineral Resource estimate as at
18 November 2016 or Carrapateena Ore Reserve estimate as at 20 October 2016.
For the reasons stated above a Mineral Resource will no longer be quoted for Khamsin.
Competent Persons’ Statements
Carrapateena Mineral Resources and Ore Reserve and Khamsin Mineral Resource
The information set out in these tables is a summary of information relating to Carrapateena Mineral Resources and Ore Reserves set out in the documents,
Carrapateena Project Mineral Resource, released on 9 December 2016; and Carrapateena Ore Reserve Statements and Explanatory Notes released on 7
November 2016 and are available at www.ozminerals.com/operations/resources-reserves.html.
The information in this report that relates to Mineral Resources is based on information compiled by Stuart Masters, a Competent Person who is a Member
of The Australasian Institute of Mining and Metallurgy (108430) and a Member of the Australian Institute of Geoscientists (5683).
Stuart Masters BSc (Geology), CFSG, has over 30 years of relevant and continuous experience as a geologist including 11 years in Iron-Oxide-Copper-Gold
style deposits. Stuart Masters has visited site on ten occasions since OZ Minerals acquired the project including three times since the 2013 Mineral Resource
was reported and once since the 2015 Mineral Resource was originally reported.
Stuart Masters is a full time employee of CS 2 Pty Ltd and has no interest in, and is entirely independent of, OZ Minerals. Stuart Masters has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a
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Resources and Reserves 2016
Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC
2012). Stuart Masters consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Stuart Masters
CS-2 Pty Ltd.
The information in this report that relates to Carrapateena Ore Reserves is based on and fairly represents information and supporting documentation
compiled by Justin Taylor BEng (Min), a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AUSIMM Membership
No. 307796).
Justin Taylor is a full time employee of OZ Minerals Limited. Justin Taylor is a shareholder in OZ Minerals Limited and is entitled to participate in the OZ
Minerals Performance Rights plan.
Justin Taylor BEng (Min) has over 30 years of experience as a mining engineer including nine years in Iron-Oxide-Copper-Gold style deposits. He has
sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activities being undertaken to qualify
as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’
(JORC 2012). Justin Taylor consents to the inclusion in the report of the matters based on his information in the form and context in which they appear.
The Ore Reserve estimate has been compiled in accordance with the guidelines defined in the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’ (The JORC Code, 2012 Edition).
Governance arrangements
OZ Minerals has a longstanding Mineral Resource and Ore Reserve Policy, which establishes company-wide consistency, rigour and discipline in the
preparation and reporting of Mineral Resources and Ore Reserves in accordance with industry best practice. The policy sets out:
•
•
•
•
Reporting requirements.
Review and approval requirements.
Company standards.
Accountabilities in relation to the assumptions and estimates used for Mineral Resource and Ore Reserve calculations; review, implementation and
compliance with the policy; and delivery of Mineral Resource and Ore Reserve estimates and findings to the Board.
Updates to Mineral Resource and Ore Reserve estimates compiled during 2016 were completed in accordance with the guiding principles contained within
the policy, suitably modified to meet current company structures, delegated authorities and estimate requirements.
This included:
•
•
•
Reporting in compliance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(JORC Code 2012 Edition).
Suitably qualified and experienced Competent Persons.
All Mineral Resource and Ore Reserve estimates being subject to internal and external review and independent review by suitably qualified
practitioners, inclusive of the Competent Persons.
•
Approval by the Board of the Mineral Resources and Ore Reserves estimates prior to release to the market.
Consolidated Financial
Statements
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Group Performance
1 Operating Segments
2 Earnings per share
3 Income tax
4 Dividends
Net Cash and Capital Employed
5 Inventories
6 Operating cash flows
7 Property, Plant and Equipment
8 Lease receivable
9 Exploration assets - Carrapateena
10 Provisions
11 Capital expenditure commitments
Contributed Equity
12 Issued capital
13 Share-based payments
Risk Management
14 Financial risk management
15 Contingencies
16 Litigation settlement expense
Group Structure & Other Information
17 Parent entity disclosures
18 Deed of cross guarantee
19 Key management personnel
20 Remuneration of auditors
21 New accounting standards
Directors’ Declaration
Independent Auditor’s Report
Report on the Remuneration Report
126
127
128
129
130
131
132
132
135
135
137
138
138
140
141
144
145
146
147
148
148
149
151
151
159
159
160
160
162
164
165
165
167
168
169
125
Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration under Section 307C
of the Corporations Act 2001
To: the Directors of OZ Minerals Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 31 December 2016 there have been:
(a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Paul Cenko
Partner
Adelaide
23 February 2017
KPMG, an Australian partnership and a member firm of
the KPMG network of independent member firms
affiliated with KPMG International Cooperative ('KPMG
International'), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
49
Finance
Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration under Section 307C
of the Corporations Act 2001
To: the Directors of OZ Minerals Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 31 December 2016 there have been:
(a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Paul Cenko
Partner
Adelaide
23 February 2017
Consolidated Statement of
Consolidated Statement of
Consolidated Statement of
Comprehensive Income
For the year ended 31 December 2016
Notes
Revenue
Net foreign exchange gains
Other income
Changes in inventories of ore and concentrate
For the year ended 31 December 2016
Consumables and other direct costs
Revenue
Employee benefit expenses
Net foreign exchange gains
Exploration and evaluation expenses
Other income
Freight expenses
Changes in inventories of ore and concentrate
Royalties expense
Consumables and other direct costs
Depreciation expense
Employee benefit expenses
Restructuring expenses – employee benefits
Exploration and evaluation expenses
Legal costs associated with Class Action
Freight expenses
Other expenses
Royalties expense
Profit before net financing income and income tax
Depreciation expense
Financing income
Restructuring expenses – employee benefits
Financing expenses
Legal costs associated with Class Action
Net financing income
Other expenses
Profit before income tax
Profit before net financing income and income tax
Income tax expense
Financing income
Profit for the year attributable to equity holders of OZ Minerals
Financing expenses
Other comprehensive loss
Net financing income
Items that will not be reclassified subsequently to Income Statement
Profit before income tax
Change in fair value of investments in equity securities, net of tax
Income tax expense
Items that may be reclassified to Income Statement
Profit for the year attributable to equity holders of OZ Minerals
Net gains/(losses) on cash flow hedges, net of tax
Other comprehensive loss
Other comprehensive gain/(loss) for the year, net of tax
Items that will not be reclassified subsequently to Income Statement
Total comprehensive income for the year attributable to equity holders of
OZ Minerals
Change in fair value of investments in equity securities, net of tax
Basic and diluted earnings per share
Items that may be reclassified to Income Statement
Basic and diluted earnings per share
Net gains/(losses) on cash flow hedges, net of tax
Basic and diluted earnings per share
Other comprehensive gain/(loss) for the year, net of tax
1
Notes
1
7
16
7
16
3
14
3
14
2
Comprehensive Income
Total comprehensive income for the year attributable to equity holders of
OZ Minerals
Basic and diluted earnings per share
Basic and diluted earnings per share
Basic and diluted earnings per share
2
35.7
Cents
Cents
2016
$m
822.9
2.7
6.8
227.8
2016
$m
(313.7)
822.9
(60.4)
2.7
(29.3)
6.8
(52.9)
227.8
(42.2)
(313.7)
(361.5)
(60.4)
–
(29.3)
(37.9)
(52.9)
(35.1)
(42.2)
127.2
(361.5)
13.8
–
(4.8)
(37.9)
9.0
(35.1)
136.2
127.2
(28.4)
13.8
107.8
(4.8)
9.0
136.2
(10.3)
(28.4)
107.8
3.6
(6.7)
101.1
(10.3)
3.6
35.7
(6.7)
101.1
2015
$m
879.4
33.2
5.9
79.8
2015
$m
(259.0)
879.4
(63.9)
33.2
(39.5)
5.9
(54.1)
79.8
(47.9)
(259.0)
(285.1)
(63.9)
(7.6)
(39.5)
(13.4)
(54.1)
(41.0)
(47.9)
186.8
(285.1)
7.6
(7.6)
(4.7)
(13.4)
2.9
(41.0)
189.7
186.8
(59.5)
7.6
130.2
(4.7)
2.9
189.7
(18.5)
(59.5)
130.2
–
(18.5)
111.7
(18.5)
Cents
–
42.9
(18.5)
111.7
Cents
42.9
KPMG, an Australian partnership and a member firm of
the KPMG network of independent member firms
affiliated with KPMG International Cooperative ('KPMG
Liability limited by a scheme approved under
International'), a Swiss entity.
Professional Standards Legislation.
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.
Comprehensive Income
50
49
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.
50
127
Annual and Sustainability Report 2016
Consolidated Statement of
Consolidated Statement of
Changes in Equity
Changes in Equity
Consolidated Balance Sheet
For the year ended 31 December 2016
Notes
Issued
capital
$m
Retained
earnings
$m
Cash
flow
hedge
reserve
$m
Treasury
shares
$m
Total
equity
$m
2,058.9
285.6
–
(0.6)
2,343.9
Balance as at 1 January 2016
Total comprehensive income for the year
Profit for the year
Other comprehensive gain/(loss)
Total comprehensive income for the year
Transactions with owners, recorded directly in
equity
Dividends
Share-based payment transactions, net of income tax
Share buy-back
Purchase of treasury shares
Exercise of performance rights
Total transactions with owners
Balance as at 31 December 2016
For the year ended 31 December 2015
–
–
–
–
–
(29.9)
–
–
(29.9)
2,029.0
107.8
(10.3)
97.5
(60.6)
6.9
–
–
(5.6)
(59.3)
323.8
4
13
12
Balance as at 1 January 2015
2,058.9
190.2
Total comprehensive income for the year
Profit for the year
Other comprehensive loss
Total comprehensive income for the year
Transactions with owners, recorded directly in
equity
Dividends
Share-based payment transactions, net of income tax
4
13
Purchase of treasury shares
Exercise of performance rights
Total transactions with owners
Balance as at 31 December 2015
–
–
–
–
–
–
–
–
2,058.9
130.2
(18.5)
111.7
(18.2)
4.4
–
(2.5)
(16.3)
285.6
–
3.6
3.6
–
–
–
–
–
–
3.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(7.1)
5.6
(1.5)
(2.1)
–
–
–
–
–
–
(3.1)
2.5
(0.6)
(0.6)
107.8
(6.7)
101.1
(60.6)
6.9
(29.9)
(7.1)
–
(90.7)
2,354.3
2,249.1
130.2
(18.5)
111.7
(18.2)
4.4
(3.1)
–
(16.9)
2,343.9
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
Total equity attributable to equity holders of OZ Minerals Limited
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
51
52
As at 31 December 2016
Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Prepayments
Assets held for sale
Total current assets
Non-current assets
Inventories
Investments in equity securities
Derivative financial instruments
Exploration assets - Carrapateena
Lease receivable
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade payables and accruals
Other payables
Current tax provision
Employee benefits
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Treasury shares
Notes
2016
$m
5
9
5
14
14
9
8
7
3
10
14
3
10
12
1,686.3
2,630.6
655.7
69.4
7.8
197.1
4.9
9.4
944.3
360.0
18.2
5.1
284.9
27.5
990.6
74.4
3.0
69.0
9.0
8.3
11.1
174.8
63.5
2.0
36.0
101.5
276.3
2,354.3
2,029.0
3.6
323.8
(2.1)
2,354.3
2015
$m
552.5
91.4
7.2
143.2
4.9
–
799.2
186.6
31.8
–
252.2
34.8
1,261.8
1,767.2
2,566.4
63.4
1.7
–
9.2
8.6
–
82.9
102.6
3.6
33.4
139.6
222.5
2,343.9
2,058.9
–
285.6
(0.6)
2,343.9
Finance
Consolidated Balance Sheet
Consolidated Balance Sheet
As at 31 December 2016
Notes
Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Prepayments
Assets held for sale
Total current assets
Non-current assets
Inventories
Investments in equity securities
Derivative financial instruments
Exploration assets - Carrapateena
Lease receivable
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade payables and accruals
Other payables
Current tax provision
Employee benefits
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Treasury shares
5
9
5
14
14
9
8
7
3
10
14
3
10
12
Total equity attributable to equity holders of OZ Minerals Limited
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
52
2016
$m
655.7
69.4
7.8
197.1
4.9
9.4
944.3
360.0
18.2
5.1
284.9
27.5
990.6
1,686.3
2,630.6
74.4
3.0
69.0
9.0
8.3
11.1
174.8
63.5
2.0
36.0
101.5
276.3
2,354.3
2,029.0
3.6
323.8
(2.1)
2,354.3
2015
$m
552.5
91.4
7.2
143.2
4.9
–
799.2
186.6
31.8
–
252.2
34.8
1,261.8
1,767.2
2,566.4
63.4
1.7
–
9.2
8.6
–
82.9
102.6
3.6
33.4
139.6
222.5
2,343.9
2,058.9
–
285.6
(0.6)
2,343.9
129
Annual and Sustainability Report 2016
Consolidated Statement
Consolidated Statement
Consolidated Statement
of Cash Flows
of Cash Flows
of Cash Flows
For the year ended 31 December 2016
For the year ended 31 December 2016
Cash flows from operating activities
Receipts from customers
Cash flows from operating activities
Payments to suppliers and employees
Receipts from customers
Payments for exploration and evaluation
Payments to suppliers and employees
Financing costs
Payments for exploration and evaluation
Interest received
Financing costs
Interest received
Net cash inflows from operating activities
Net cash inflows from operating activities
Cash flows from investing activities
Payment for property, plant and equipment
Cash flows from investing activities
Payment for Carrapateena evaluation expenditure
Payment for property, plant and equipment
Proceeds from disposal of investments
Payment for Carrapateena evaluation expenditure
Net proceeds from sale of pre-commissioning Malu UG ore concentrates
Proceeds from disposal of investments
Dividends received
Net proceeds from sale of pre-commissioning Malu UG ore concentrates
Dividends received
Net cash outflows from investing activities
Net cash outflows from investing activities
Cash flows from financing activities
Dividends paid to shareholders
Cash flows from financing activities
Payments for share buy-back
Dividends paid to shareholders
Payments for acquisition of treasury shares
Payments for share buy-back
Payments for acquisition of treasury shares
Net cash outflows from financing activities
Net cash outflows from financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at beginning of the year
Net increase/(decrease) in cash held
Notes
Notes
6
6
9
14
9
14
4
12
4
12
Effects of exchange rate changes on foreign currency denominated cash balances
Cash and cash equivalents at beginning of the year
Effects of exchange rate changes on foreign currency denominated cash balances
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of the year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
2016
$m
2016
$m
874.0
(529.9)
874.0
(29.3)
(529.9)
(2.0)
(29.3)
11.3
(2.0)
11.3
324.1
324.1
(99.8)
(25.6)
(99.8)
3.3
(25.6)
–
3.3
–
–
–
(122.1)
(122.1)
(60.6)
(29.9)
(60.6)
(7.1)
(29.9)
(7.1)
(97.6)
(97.6)
104.4
552.5
104.4
(1.2)
552.5
(1.2)
655.7
655.7
2015
$m
2015
$m
929.6
(463.0)
929.6
(39.5)
(463.0)
(2.8)
(39.5)
5.5
(2.8)
5.5
429.8
429.8
(251.4)
–
(251.4)
126.5
–
46.4
126.5
1.0
46.4
1.0
(77.5)
(77.5)
(18.2)
–
(18.2)
(3.1)
–
(3.1)
(21.3)
(21.3)
331.0
218.5
331.0
3.0
218.5
3.0
552.5
552.5
53
53
Finance
Consolidated Statement
Consolidated Statement
of Cash Flows
of Cash Flows
For the year ended 31 December 2016
For the year ended 31 December 2016
Cash flows from operating activities
Receipts from customers
Cash flows from operating activities
Payments to suppliers and employees
Receipts from customers
Payments for exploration and evaluation
Payments to suppliers and employees
Financing costs
Payments for exploration and evaluation
Interest received
Financing costs
Interest received
Net cash inflows from operating activities
Net cash inflows from operating activities
Cash flows from investing activities
Payment for property, plant and equipment
Cash flows from investing activities
Payment for Carrapateena evaluation expenditure
Payment for property, plant and equipment
Proceeds from disposal of investments
Payment for Carrapateena evaluation expenditure
Dividends received
Net cash outflows from investing activities
Net cash outflows from investing activities
Cash flows from financing activities
Dividends paid to shareholders
Cash flows from financing activities
Payments for share buy-back
Dividends paid to shareholders
Payments for acquisition of treasury shares
Payments for share buy-back
Payments for acquisition of treasury shares
Net cash outflows from financing activities
Net cash outflows from financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at beginning of the year
Net increase/(decrease) in cash held
Net proceeds from sale of pre-commissioning Malu UG ore concentrates
Proceeds from disposal of investments
Dividends received
Net proceeds from sale of pre-commissioning Malu UG ore concentrates
Effects of exchange rate changes on foreign currency denominated cash balances
Cash and cash equivalents at beginning of the year
Effects of exchange rate changes on foreign currency denominated cash balances
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of the year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
Notes
Notes
6
6
9
14
9
14
4
12
4
12
2016
$m
2016
$m
874.0
(529.9)
874.0
(529.9)
(29.3)
(29.3)
(2.0)
11.3
(2.0)
324.1
11.3
324.1
(99.8)
(25.6)
(99.8)
(25.6)
3.3
3.3
–
–
–
(122.1)
–
(122.1)
(60.6)
(29.9)
(60.6)
(29.9)
(7.1)
(97.6)
(7.1)
(97.6)
104.4
552.5
104.4
552.5
(1.2)
655.7
(1.2)
655.7
2015
$m
2015
$m
929.6
(463.0)
929.6
(463.0)
(39.5)
(39.5)
(2.8)
(2.8)
5.5
429.8
5.5
429.8
(251.4)
(251.4)
–
126.5
–
126.5
46.4
46.4
1.0
(77.5)
1.0
(77.5)
(18.2)
(18.2)
–
(3.1)
–
(21.3)
(3.1)
(21.3)
331.0
218.5
331.0
218.5
3.0
552.5
3.0
552.5
53
53
Directors’ Report
issued by the Australian Securities and Investments Commission.
issued by the Australian Securities and Investments Commission.
issued by the Australian Securities and Investments Commission.
issued by the Australian Securities and Investments Commission.
issued by the Australian Securities and Investments Commission.
Directors’ Report
Directors’ Report
Notes to the Consolidated Financial
Notes to the Consolidated Financial
Notes to the Consolidated Financial
Notes to the Consolidated Financial
Notes to the Consolidated Financial
Notes to the Consolidated Financial
Statements
Statements
Statements
Statements
Statements
Statements
Directors’ Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Introduction
Introduction
Introduction
Introduction
Introduction
Operational and Financial Review
positioned for growth.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
The principal business activities of OZ Minerals Limited (OZ Minerals or the Company) and its controlled entities (collectively the ‘Consolidated Entity’) were the
The principal business activities of OZ Minerals Limited (OZ Minerals or the Company) and its controlled entities (collectively the ‘Consolidated Entity’) were the
The principal business activities of OZ Minerals Limited (OZ Minerals or the Company) and its controlled entities (collectively the ‘Consolidated Entity’) were the
The principal business activities of OZ Minerals Limited (OZ Minerals or the Company) and its controlled entities (collectively the ‘Consolidated Entity’) were the
The principal business activities of OZ Minerals Limited (OZ Minerals or the Company) and its controlled entities (collectively the ‘Consolidated Entity’) were the
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
mining and processing of ore containing copper, gold and silver, undertaking exploration activities and development of mining projects.
mining and processing of ore containing copper, gold and silver, undertaking exploration activities and development of mining projects.
mining and processing of ore containing copper, gold and silver, undertaking exploration activities and development of mining projects.
mining and processing of ore containing copper, gold and silver, undertaking exploration activities and development of mining projects.
mining and processing of ore containing copper, gold and silver, undertaking exploration activities and development of mining projects.
positioned for growth.
copper deposits at Carrapateena.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
positioned for growth.
The company is incorporated and domiciled in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. OZ Minerals
The company is incorporated and domiciled in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. OZ Minerals
The company is incorporated and domiciled in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. OZ Minerals
The company is incorporated and domiciled in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. OZ Minerals
The company is incorporated and domiciled in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. OZ Minerals
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Operational and Financial Review
registered office is Level 1, 162 Greenhill Road, Parkside, 5063, South Australia, Australia.
registered office is Level 1, 162 Greenhill Road, Parkside, 5063, South Australia, Australia.
registered office is Level 1, 162 Greenhill Road, Parkside, 5063, South Australia, Australia.
registered office is Level 1, 162 Greenhill Road, Parkside, 5063, South Australia, Australia.
registered office is Level 1, 162 Greenhill Road, Parkside, 5063, South Australia, Australia.
copper deposits at Carrapateena.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2016:
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2016:
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2016:
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2016:
The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2016:
Operational and Financial Review
• include general purpose Financial Statements prepared by a for profit entity in accordance with Australian Accounting Standards (‘AASBs’) and the
• include general purpose Financial Statements prepared by a for profit entity in accordance with Australian Accounting Standards (‘AASBs’) and the
• include general purpose Financial Statements prepared by a for profit entity in accordance with Australian Accounting Standards (‘AASBs’) and the
• include general purpose Financial Statements prepared by a for profit entity in accordance with Australian Accounting Standards (‘AASBs’) and the
• include general purpose Financial Statements prepared by a for profit entity in accordance with Australian Accounting Standards (‘AASBs’) and the
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
commitment to operating discipline. Highlights for Prominent Hill were:
Corporations Act 2001, and comply with International Financial Reporting Standards (‘IFRS’)
Corporations Act 2001, and comply with International Financial Reporting Standards (‘IFRS’)
Corporations Act 2001, and comply with International Financial Reporting Standards (‘IFRS’)
Corporations Act 2001, and comply with International Financial Reporting Standards (‘IFRS’)
Corporations Act 2001, and comply with International Financial Reporting Standards (‘IFRS’)
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• are presented in Australian dollars which is also the functional currency of the Company and all its controlled entities
• are presented in Australian dollars which is also the functional currency of the Company and all its controlled entities
• are presented in Australian dollars which is also the functional currency of the Company and all its controlled entities
• are presented in Australian dollars which is also the functional currency of the Company and all its controlled entities
• are presented in Australian dollars which is also the functional currency of the Company and all its controlled entities
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
copper deposits at Carrapateena.
• have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise stated, in accordance with Instrument 2016/191,
• have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise stated, in accordance with Instrument 2016/191,
• have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise stated, in accordance with Instrument 2016/191,
• have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise stated, in accordance with Instrument 2016/191,
• have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise stated, in accordance with Instrument 2016/191,
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Copper guidance achieved for 2016 and for the second consecutive year;
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
copper deposits at Carrapateena.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
The Consolidated Financial Statements have been prepared on a going concern basis and under the historical cost convention, except for the following items
The Consolidated Financial Statements have been prepared on a going concern basis and under the historical cost convention, except for the following items
The Consolidated Financial Statements have been prepared on a going concern basis and under the historical cost convention, except for the following items
The Consolidated Financial Statements have been prepared on a going concern basis and under the historical cost convention, except for the following items
The Consolidated Financial Statements have been prepared on a going concern basis and under the historical cost convention, except for the following items
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
of the project is currently underway with a number of milestones achieved in 2016:
commitment to operating discipline. Highlights for Prominent Hill were:
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
which are measured at fair value, or otherwise, in accordance with the provisions of applicable accounting standards:
which are measured at fair value, or otherwise, in accordance with the provisions of applicable accounting standards:
which are measured at fair value, or otherwise, in accordance with the provisions of applicable accounting standards:
which are measured at fair value, or otherwise, in accordance with the provisions of applicable accounting standards:
which are measured at fair value, or otherwise, in accordance with the provisions of applicable accounting standards:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• financial instruments, including trade receivables
• financial instruments, including trade receivables
• financial instruments, including trade receivables
• financial instruments, including trade receivables
• financial instruments, including trade receivables
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
commitment to operating discipline. Highlights for Prominent Hill were:
• Successful completion of the PFS with robust financials and short payback period;
• Copper guidance achieved for 2016 and for the second consecutive year;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the project is currently underway with a number of milestones achieved in 2016:
• investments in equity securities
• investments in equity securities
• investments in equity securities
• investments in equity securities
• investments in equity securities
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Construction commenced on the Tjati decline; and
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• derivative financial instruments
• derivative financial instruments
• derivative financial instruments
• derivative financial instruments
• derivative financial instruments
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• items of inventory and property, plant and equipment which have been written down in accordance with applicable accounting standards.
• items of inventory and property, plant and equipment which have been written down in accordance with applicable accounting standards.
• items of inventory and property, plant and equipment which have been written down in accordance with applicable accounting standards.
• items of inventory and property, plant and equipment which have been written down in accordance with applicable accounting standards.
• items of inventory and property, plant and equipment which have been written down in accordance with applicable accounting standards.
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Other than the final dividend for the year ended 31 December 2016, discussed in Note 4, no events have occurred subsequent to reporting date which have
Other than the final dividend for the year ended 31 December 2016, discussed in Note 4, no events have occurred subsequent to reporting date which have
Other than the final dividend for the year ended 31 December 2016, discussed in Note 4, no events have occurred subsequent to reporting date which have
Other than the final dividend for the year ended 31 December 2016, discussed in Note 4, no events have occurred subsequent to reporting date which have
Other than the final dividend for the year ended 31 December 2016, discussed in Note 4, no events have occurred subsequent to reporting date which have
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
of the project is currently underway with a number of milestones achieved in 2016:
significantly affected or may significantly affect the Consolidated Entity’s operations or results in future years.
significantly affected or may significantly affect the Consolidated Entity’s operations or results in future years.
significantly affected or may significantly affect the Consolidated Entity’s operations or results in future years.
significantly affected or may significantly affect the Consolidated Entity’s operations or results in future years.
significantly affected or may significantly affect the Consolidated Entity’s operations or results in future years.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
companies which provides exploration expertise in specific geologies and locations.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Successful completion of the PFS with robust financials and short payback period;
companies which provides exploration expertise in specific geologies and locations.
• Construction commenced on the Tjati decline; and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Australian and Northern Territory borders.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
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12
12
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Performance
Group Performance
1 Operating Segments
1 Operating Segments
Segment
Prominent Hill
Segment
Principal activities
Prominent Hill
Carrapateena
Mining and processing ore containing copper, gold and silver from the Prominent Hill Mine, a combined open pit and
Principal activities
underground mine located in the Gawler Craton of South Australia. The Prominent Hill Mine generates revenue from the
sale of concentrate products containing copper, gold and silver to customers in Asia, Europe and Australia.
Mining and processing ore containing copper, gold and silver from the Prominent Hill Mine, a combined open pit and
underground mine located in the Gawler Craton of South Australia. The Prominent Hill Mine generates revenue from the
Exploration, evaluation and long lead item development associated with the Carrapateena project located in South
sale of concentrate products containing copper, gold and silver to customers in Asia, Europe and Australia.
Australia.
Exploration, evaluation and long lead item development associated with the Carrapateena project located in South
Exploration and evaluation activities associated with other projects and include interests in Chile and exploration
Australia.
arrangements with Minotaur Exploration Ltd, Cassini Resources Limited, Toro Energy Limited, and Corporate Development
activities.
Exploration and evaluation activities associated with other projects and include interests in Chile and exploration
arrangements with Minotaur Exploration Ltd, Cassini Resources Limited, Toro Energy Limited, and Corporate Development
Other corporate activities include the Consolidated Entity’s group office (which includes all corporate expenses that cannot
activities.
be directly attributed to the operation of the Consolidated Entity’s operating segments), other investments in equity
securities and cash balances.
Other corporate activities include the Consolidated Entity’s group office (which includes all corporate expenses that cannot
be directly attributed to the operation of the Consolidated Entity’s operating segments), other investments in equity
securities and cash balances.
Carrapateena
Exploration &
Development
Exploration &
Development
Corporate
(corporate activities)
Corporate
(corporate activities)
Recognition and measurement of revenue
Recognition and measurement of revenue
Revenue from sale of concentrates is recognised upon transfer of risks and rewards to the customer when the price is fixed or determinable, no further
processing is required, the quantity and quality of the goods has been determined with reasonable accuracy, and collectability is probable. This is generally when
Revenue from sale of concentrates is recognised upon transfer of risks and rewards to the customer when the price is fixed or determinable, no further
the concentrates are loaded on to the vessel at the port of shipment or in the case of domestic sales when the concentrates are delivered to the customer’s
processing is required, the quantity and quality of the goods has been determined with reasonable accuracy, and collectability is probable. This is generally when
premises.
the concentrates are loaded on to the vessel at the port of shipment or in the case of domestic sales when the concentrates are delivered to the customer’s
Measurement of sales revenue is based on the most recently determined estimate of product specifications with a subsequent adjustment made to revenue upon
premises.
final determination of metal content in concentrates by customer. These adjustments are typically insignificant relative to the total sales value.
Measurement of sales revenue is based on the most recently determined estimate of product specifications with a subsequent adjustment made to revenue upon
The terms of concentrate sales contracts contain provisional pricing arrangements. The commodity price for metal in concentrate is based on prevailing prices at
final determination of metal content in concentrates by customer. These adjustments are typically insignificant relative to the total sales value.
the time of shipment to the customer. Adjustments to the commodity price occur based on movements in quoted market prices up to the date of final
The terms of concentrate sales contracts contain provisional pricing arrangements. The commodity price for metal in concentrate is based on prevailing prices at
settlement. Receivables arising from sales contracts are initially recognised at fair value, with subsequent changes in fair value recognised in the Income
the time of shipment to the customer. Adjustments to the commodity price occur based on movements in quoted market prices up to the date of final
Statement in each period until final settlement, as an adjustment to revenue. Changes in fair value over the quotation period and up until final settlement are
settlement. Receivables arising from sales contracts are initially recognised at fair value, with subsequent changes in fair value recognised in the Income
estimated by reference to forward market prices.
Statement in each period until final settlement, as an adjustment to revenue. Changes in fair value over the quotation period and up until final settlement are
Revenue is reported net of treatment and refining charges, other commercial costs, pricing adjustments, and gains/losses from copper derivative contracts.
estimated by reference to forward market prices.
Revenue is reported net of treatment and refining charges, other commercial costs, pricing adjustments, and gains/losses from copper derivative contracts.
Net Revenue by geographical region
Net Revenue by geographical region
10.4
118.1
10.4
118.1
438.7
438.7
5.5
82.6
5.5
82.6
326.5
326.5
2016 Asia
2015 Asia
16.3
16.3
1.5
58.3
1.5
58.3
600
500
600
400
500
300
400
200
300
100
200
0
100
0
)
m
$
(
s
e
)
m
t
a
$
r
t
(
n
s
e
e
c
t
n
a
o
r
t
c
n
e
f
o
c
n
s
o
e
c
l
a
f
s
o
m
s
e
o
l
r
a
f
s
e
m
u
n
o
e
r
v
f
e
e
R
u
n
e
v
e
R
Silver
Silver
Gold
Gold
Copper
Copper
3.8
45.9
3.8
45.9
200.7
200.7
2.0
41.3
2.0
171.1
41.3
3.7
43.8
3.7
132.1
43.8
2016 Europe 2015 Europe
171.1
2016 Australia 2015 Australia
132.1
2016 Asia
2015 Asia
2016 Europe 2015 Europe
2016 Australia 2015 Australia
55
55
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Perfomance
Group Perfomance
Notes to the Consolidated Financial Statements
Group Perfomance
Revenue information presented on the previous page is based on the location of the customer’s operations. Major customers who individually accounted for
more than ten per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per cent).
Revenue information presented on the previous page is based on the location of the customer’s operations. Major customers who individually accounted for
more than ten per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per cent).
Segment Result: Underlying EBITDA, Underlying EBIT and Underlying NPAT are used internally by management to assess performance of the business, make
decisions on allocating resources and assess operational management.
Segment Result: Underlying EBITDA, Underlying EBIT and Underlying NPAT are used internally by management to assess performance of the business, make
31 December 2016
decisions on allocating resources and assess operational management.
Revenue information presented on the previous page is based on the location of the customer’s operations. Major customers who individually accounted for
Prominent Hill
Exploration &
Carrapateena
Corporate
Consolidated
more than ten per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per cent).
31 December 2016
Prominent Hill
Exploration &
Carrapateena
Corporate
Consolidated
Segment Result: Underlying EBITDA, Underlying EBIT and Underlying NPAT are used internally by management to assess performance of the business, make
–
–
Revenue – Copper
725.1
–
725.1
decisions on allocating resources and assess operational management.
Revenue – Gold and Silver
Revenue – Copper
197.0
725.1
Prominent Hill
Carrapateena
Corporate
–
–
$m
Consolidated
(99.2)
197.0
Development
Development
$m
$m
Exploration &
Development
–
–
$m
31 December 2016
Treatment and refining charges1
Revenue – Gold and Silver
Treatment and refining charges1
Net Revenue
Revenue – Copper
Net Revenue
Mining
Revenue – Gold and Silver
Processing
Mining
Treatment and refining charges1
Transport
Processing
Net Revenue
Site general and administration
Transport
Mining
Royalties
Site general and administration
Processing
Deferred waste adjustment
Royalties
Transport
Inventory adjustment
Deferred waste adjustment
Site general and administration
Inventory adjustment
Cost of goods sold
Royalties
Cost of goods sold
Corporate general and administration
Deferred waste adjustment
Exploration and other income/(expenses)
Corporate general and administration
Inventory adjustment
Net realisable value adjustments
Exploration and other income/(expenses)
Cost of goods sold
Foreign exchange gain/(loss)
Net realisable value adjustments
Corporate general and administration
Foreign exchange gain/(loss)
Underlying EBITDA
Exploration and other income/(expenses)
Underlying EBITDA
Depreciation of PPE
Net realisable value adjustments
Capitalised depreciation into inventory
Depreciation of PPE
Foreign exchange gain/(loss)
Capitalised depreciation into inventory
Net Depreciation
Underlying EBITDA
Net Depreciation
Underlying EBIT
Depreciation of PPE
Underlying EBIT
Net finance income
Capitalised depreciation into inventory
Income tax expense
Net finance income
Net Depreciation
Income tax expense
Underlying Net Profit after tax
Underlying EBIT
Underlying Net Profit after tax
Non underlying items net of tax2
$m
$m
(99.2)
197.0
$m
(99.2)
822.9
725.1
(296.2)
822.9
197.0
(296.2)
(91.3)
(99.2)
(52.9)
(91.3)
822.9
(19.7)
(52.9)
(296.2)
(42.2)
(19.7)
(91.3)
(42.2)
36.6
(52.9)
85.4
36.6
(19.7)
(380.3)
85.4
(42.2)
(380.3)
(10.5)
36.6
(10.5)
0.7
85.4
(10.5)
0.7
(380.3)
(10.5)
(4.1)
(10.5)
418.2
(4.1)
(356.5)
418.2
0.7
(10.5)
(356.5)
152.8
(4.1)
(203.7)
152.8
418.2
(203.7)
214.5
(356.5)
214.5
152.8
(203.7)
214.5
$m
$m
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(12.9)
–
–
(12.9)
–
–
(12.9)
–
–
(12.9)
(12.9)
(3.1)
–
(3.1)
–
–
–
(3.1)
(12.9)
(16.0)
(3.1)
(3.1)
(16.0)
–
(3.1)
(16.0)
$m
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(25.7)
–
–
–
(25.7)
4.3
–
–
4.3
–
–
6.8
(25.7)
(14.6)
6.8
(14.6)
(1.9)
4.3
–
–
(1.9)
6.8
(1.9)
–
(14.6)
(16.5)
(1.9)
(1.9)
(16.5)
–
(1.9)
(16.5)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.5)
–
(16.4)
(0.5)
(16.4)
–
–
–
–
–
(0.5)
(16.9)
–
(16.4)
(16.9)
–
(16.9)
(16.9)
–
(16.9)
–
(16.9)
$m
$m
197.0
725.1
$m
(99.2)
822.9
725.1
(296.2)
822.9
197.0
(296.2)
(91.3)
(99.2)
(52.9)
(91.3)
822.9
(19.7)
(52.9)
(296.2)
(42.2)
(19.7)
(91.3)
(42.2)
36.6
(52.9)
85.4
36.6
(19.7)
(380.3)
85.4
(42.2)
(380.3)
(36.7)
36.6
(24.3)
(36.7)
85.4
(10.5)
(24.3)
(380.3)
(10.5)
2.7
(36.7)
373.8
2.7
(24.3)
373.8
(361.5)
(10.5)
(361.5)
152.8
2.7
(208.7)
152.8
373.8
(208.7)
165.1
(361.5)
165.1
9.0
152.8
(39.8)
9.0
(208.7)
(39.8)
134.3
165.1
134.3
(26.5)
9.0
(26.5)
107.8
(39.8)
107.8
134.3
(26.5)
107.8
Net finance income
Non underlying items net of tax2
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Income tax expense
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Underlying Net Profit after tax
Non underlying items net of tax2
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
1 Treatment and refining charges includes other commercial costs
1 Treatment and refining charges includes other commercial costs
2 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
2 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
1 Treatment and refining charges includes other commercial costs
2 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
56
56
56
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Perfomance
Group Perfomance
Notes to the Consolidated Financial Statements
Group Perfomance
Group Performance
Group Performance
1 Operating Segments
1 Operating Segments
Segment
Principal activities
Prominent Hill
Segment
Prominent Hill
Carrapateena
Carrapateena
Exploration &
Development
Exploration &
Development
Corporate
(corporate activities)
Corporate
(corporate activities)
Australia.
Australia.
Mining and processing ore containing copper, gold and silver from the Prominent Hill Mine, a combined open pit and
underground mine located in the Gawler Craton of South Australia. The Prominent Hill Mine generates revenue from the
Principal activities
sale of concentrate products containing copper, gold and silver to customers in Asia, Europe and Australia.
Mining and processing ore containing copper, gold and silver from the Prominent Hill Mine, a combined open pit and
underground mine located in the Gawler Craton of South Australia. The Prominent Hill Mine generates revenue from the
Exploration, evaluation and long lead item development associated with the Carrapateena project located in South
sale of concentrate products containing copper, gold and silver to customers in Asia, Europe and Australia.
Exploration, evaluation and long lead item development associated with the Carrapateena project located in South
Exploration and evaluation activities associated with other projects and include interests in Chile and exploration
arrangements with Minotaur Exploration Ltd, Cassini Resources Limited, Toro Energy Limited, and Corporate Development
activities.
Exploration and evaluation activities associated with other projects and include interests in Chile and exploration
activities.
arrangements with Minotaur Exploration Ltd, Cassini Resources Limited, Toro Energy Limited, and Corporate Development
Other corporate activities include the Consolidated Entity’s group office (which includes all corporate expenses that cannot
be directly attributed to the operation of the Consolidated Entity’s operating segments), other investments in equity
securities and cash balances.
Other corporate activities include the Consolidated Entity’s group office (which includes all corporate expenses that cannot
be directly attributed to the operation of the Consolidated Entity’s operating segments), other investments in equity
Recognition and measurement of revenue
securities and cash balances.
Revenue from sale of concentrates is recognised upon transfer of risks and rewards to the customer when the price is fixed or determinable, no further
Recognition and measurement of revenue
processing is required, the quantity and quality of the goods has been determined with reasonable accuracy, and collectability is probable. This is generally when
Revenue from sale of concentrates is recognised upon transfer of risks and rewards to the customer when the price is fixed or determinable, no further
the concentrates are loaded on to the vessel at the port of shipment or in the case of domestic sales when the concentrates are delivered to the customer’s
processing is required, the quantity and quality of the goods has been determined with reasonable accuracy, and collectability is probable. This is generally when
the concentrates are loaded on to the vessel at the port of shipment or in the case of domestic sales when the concentrates are delivered to the customer’s
Measurement of sales revenue is based on the most recently determined estimate of product specifications with a subsequent adjustment made to revenue upon
premises.
premises.
final determination of metal content in concentrates by customer. These adjustments are typically insignificant relative to the total sales value.
Measurement of sales revenue is based on the most recently determined estimate of product specifications with a subsequent adjustment made to revenue upon
The terms of concentrate sales contracts contain provisional pricing arrangements. The commodity price for metal in concentrate is based on prevailing prices at
final determination of metal content in concentrates by customer. These adjustments are typically insignificant relative to the total sales value.
the time of shipment to the customer. Adjustments to the commodity price occur based on movements in quoted market prices up to the date of final
The terms of concentrate sales contracts contain provisional pricing arrangements. The commodity price for metal in concentrate is based on prevailing prices at
settlement. Receivables arising from sales contracts are initially recognised at fair value, with subsequent changes in fair value recognised in the Income
the time of shipment to the customer. Adjustments to the commodity price occur based on movements in quoted market prices up to the date of final
Statement in each period until final settlement, as an adjustment to revenue. Changes in fair value over the quotation period and up until final settlement are
settlement. Receivables arising from sales contracts are initially recognised at fair value, with subsequent changes in fair value recognised in the Income
estimated by reference to forward market prices.
Statement in each period until final settlement, as an adjustment to revenue. Changes in fair value over the quotation period and up until final settlement are
Revenue is reported net of treatment and refining charges, other commercial costs, pricing adjustments, and gains/losses from copper derivative contracts.
estimated by reference to forward market prices.
Revenue is reported net of treatment and refining charges, other commercial costs, pricing adjustments, and gains/losses from copper derivative contracts.
Net Revenue by geographical region
Net Revenue by geographical region
10.4
118.1
10.4
118.1
438.7
438.7
5.5
82.6
5.5
82.6
326.5
326.5
600
500
600
400
500
300
400
200
300
100
200
100
0
0
)
m
$
(
s
)
e
t
m
a
$
r
t
(
n
s
e
e
c
t
n
a
r
o
t
c
n
f
e
o
c
n
s
o
e
l
c
a
f
s
o
m
s
e
o
l
r
a
f
s
e
u
m
n
o
e
r
f
v
e
e
R
u
n
e
v
e
R
16.3
16.3
1.5
58.3
1.5
58.3
2.0
41.3
2.0
171.1
41.3
171.1
55
55
2016 Asia
2015 Asia
2016 Europe 2015 Europe
2016 Australia 2015 Australia
132.1
2016 Asia
2015 Asia
2016 Europe 2015 Europe
2016 Australia 2015 Australia
Silver
Silver
Gold
Gold
Copper
Copper
3.7
43.8
3.7
132.1
43.8
3.8
45.9
3.8
45.9
200.7
200.7
Revenue information presented on the previous page is based on the location of the customer’s operations. Major customers who individually accounted for
more than ten per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per cent).
Revenue information presented on the previous page is based on the location of the customer’s operations. Major customers who individually accounted for
more than ten per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per cent).
Segment Result: Underlying EBITDA, Underlying EBIT and Underlying NPAT are used internally by management to assess performance of the business, make
decisions on allocating resources and assess operational management.
Segment Result: Underlying EBITDA, Underlying EBIT and Underlying NPAT are used internally by management to assess performance of the business, make
decisions on allocating resources and assess operational management.
Exploration &
31 December 2016
Revenue information presented on the previous page is based on the location of the customer’s operations. Major customers who individually accounted for
Development
more than ten per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per cent).
Exploration &
31 December 2016
$m
Development
–
$m
–
–
Exploration &
–
–
Development
–
–
$m
–
–
–
Segment Result: Underlying EBITDA, Underlying EBIT and Underlying NPAT are used internally by management to assess performance of the business, make
Revenue – Copper
decisions on allocating resources and assess operational management.
Revenue – Gold and Silver
Revenue – Copper
31 December 2016
Treatment and refining charges1
Revenue – Gold and Silver
Prominent Hill
$m
Prominent Hill
$m
725.1
197.0
725.1
Prominent Hill
(99.2)
197.0
$m
(99.2)
822.9
Carrapateena
$m
Carrapateena
$m
–
–
–
Carrapateena
–
–
$m
–
–
Corporate
$m
Corporate
$m
–
–
–
Corporate
–
–
$m
–
–
Treatment and refining charges1
Net Revenue
–
–
–
–
–
–
Consolidated
$m
Consolidated
$m
725.1
197.0
725.1
Consolidated
(99.2)
197.0
$m
(99.2)
822.9
725.1
822.9
(296.2)
Revenue – Copper
Net Revenue
Mining
Revenue – Gold and Silver
Processing
Mining
Treatment and refining charges1
Transport
Processing
Net Revenue
Site general and administration
Transport
Mining
Royalties
Site general and administration
Processing
Deferred waste adjustment
Royalties
Transport
Inventory adjustment
Deferred waste adjustment
Site general and administration
Inventory adjustment
Cost of goods sold
Royalties
Cost of goods sold
Corporate general and administration
Deferred waste adjustment
Exploration and other income/(expenses)
Corporate general and administration
Inventory adjustment
Net realisable value adjustments
Exploration and other income/(expenses)
Cost of goods sold
Foreign exchange gain/(loss)
Net realisable value adjustments
Corporate general and administration
Foreign exchange gain/(loss)
Underlying EBITDA
Exploration and other income/(expenses)
Underlying EBITDA
Depreciation of PPE
Net realisable value adjustments
Capitalised depreciation into inventory
Depreciation of PPE
Foreign exchange gain/(loss)
Capitalised depreciation into inventory
Net Depreciation
Underlying EBITDA
Net Depreciation
Underlying EBIT
Depreciation of PPE
Underlying EBIT
Net finance income
Capitalised depreciation into inventory
Income tax expense
Net finance income
Net Depreciation
Income tax expense
Underlying Net Profit after tax
725.1
822.9
(296.2)
197.0
(91.3)
(296.2)
(99.2)
(52.9)
(91.3)
822.9
(19.7)
(52.9)
(296.2)
(42.2)
(19.7)
(91.3)
36.6
(42.2)
(52.9)
85.4
36.6
(19.7)
85.4
(380.3)
(42.2)
(380.3)
(10.5)
36.6
0.7
(10.5)
85.4
(10.5)
0.7
(380.3)
(4.1)
(10.5)
(10.5)
(4.1)
418.2
0.7
418.2
(356.5)
(10.5)
152.8
(356.5)
(4.1)
152.8
(203.7)
418.2
(203.7)
214.5
(356.5)
214.5
152.8
(203.7)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(12.9)
–
–
–
(12.9)
–
–
–
–
–
(12.9)
(12.9)
(12.9)
(3.1)
–
–
(3.1)
–
–
(3.1)
(12.9)
(3.1)
(16.0)
(3.1)
(16.0)
–
(3.1)
(16.0)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.5)
–
(16.4)
(0.5)
–
–
(16.4)
–
–
–
–
(0.5)
(16.9)
(16.4)
(16.9)
–
–
–
–
–
–
–
(16.9)
–
(16.9)
–
(16.9)
–
–
(16.9)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(25.7)
–
4.3
(25.7)
–
–
4.3
–
–
6.8
(25.7)
6.8
(14.6)
4.3
(14.6)
(1.9)
–
–
(1.9)
6.8
–
(1.9)
(14.6)
(1.9)
(16.5)
(1.9)
(16.5)
–
(1.9)
(16.5)
Underlying EBIT
Non underlying items net of tax2
Underlying Net Profit after tax
Net finance income
Non underlying items net of tax2
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Income tax expense
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
214.5
Underlying Net Profit after tax
Non underlying items net of tax2
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
1 Treatment and refining charges includes other commercial costs
1 Treatment and refining charges includes other commercial costs
2 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
2 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
1 Treatment and refining charges includes other commercial costs
56
2 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
56
56
197.0
(91.3)
(296.2)
(99.2)
(52.9)
(91.3)
822.9
(19.7)
(52.9)
(296.2)
(42.2)
(19.7)
(91.3)
36.6
(42.2)
(52.9)
85.4
36.6
(19.7)
85.4
(380.3)
(42.2)
(380.3)
(36.7)
36.6
(24.3)
(36.7)
85.4
(10.5)
(24.3)
(380.3)
2.7
(10.5)
(36.7)
2.7
373.8
(24.3)
373.8
(361.5)
(10.5)
152.8
(361.5)
2.7
152.8
(208.7)
373.8
(208.7)
165.1
(361.5)
165.1
9.0
152.8
(39.8)
9.0
(208.7)
(39.8)
134.3
165.1
134.3
(26.5)
9.0
(26.5)
107.8
(39.8)
107.8
134.3
(26.5)
107.8
133
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Group Perfomance
Corporate
$m
Corporate
$m
–
Consolidated
$m
Consolidated
$m
794.5
–
–
–
–
182.0
794.5
(97.1)
182.0
–
–
Corporate
$m
–
–
879.4
(97.1)
Consolidated
$m
(351.7)
879.4
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Perfomance
Group Perfomance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Perfomance
Group Performance
31 December 2015
31 December 2015
Revenue – Copper
Revenue – Gold and Silver
Revenue – Copper
Treatment and refining charges
Revenue – Gold and Silver
Net Revenue
Treatment and refining charges
31 December 2015
Mining
Net Revenue
Prominent Hill
$m
Prominent Hill
$m
794.5
Carrapateena
$m
Carrapateena
$m
–
182.0
794.5
(97.1)
182.0
–
–
–
–
879.4
(97.1)
Prominent Hill
$m
(351.7)
879.4
–
–
Carrapateena
$m
–
–
(87.0)
(351.7)
794.5
(54.1)
(87.0)
182.0
(23.3)
(54.1)
(97.1)
(47.9)
(23.3)
879.4
148.1
(47.9)
(351.7)
34.2
148.1
(87.0)
(381.7)
34.2
(54.1)
(14.2)
(381.7)
(23.3)
(1.5)
(14.2)
(47.9)
(3.0)
(1.5)
148.1
(4.4)
(3.0)
34.2
12.5
(4.4)
(381.7)
487.1
12.5
(14.2)
(281.5)
487.1
(1.5)
50.0
(281.5)
(3.0)
(231.5)
50.0
(4.4)
255.6
(231.5)
12.5
Processing
Mining
Revenue – Copper
Transport
Processing
Revenue – Gold and Silver
Site general and administration
Transport
Treatment and refining charges
Royalties
Site general and administration
Net Revenue
Deferred waste adjustment
Royalties
Mining
Inventory adjustment
Deferred waste adjustment
Processing
Cost of goods sold
Inventory adjustment
Transport
Corporate general and administration
Cost of goods sold
Site general and administration
Exploration and other income/(expenses)
Corporate general and administration
Royalties
Restructuring costs
Exploration and other income/(expenses)
Deferred waste adjustment
Net realisable value adjustments
Restructuring costs
Inventory adjustment
Foreign exchange gain
Net realisable value adjustments
Cost of goods sold
Underlying EBITDA
Foreign exchange gain
Corporate general and administration
Depreciation of PPE
Underlying EBITDA
Exploration and other income/(expenses)
Capitalised depreciation into inventory
Depreciation of PPE
Restructuring costs
Net Depreciation
Capitalised depreciation into inventory
Net realisable value adjustments
Underlying EBIT
Net Depreciation
Foreign exchange gain
Net finance income
Underlying EBIT
Underlying EBITDA
Income tax expense
Net finance income
Depreciation of PPE
Underlying Net Profit after tax
Income tax expense
Capitalised depreciation into inventory
Non underlying items net of tax1
Underlying Net Profit after tax
Net Depreciation
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Non underlying items net of tax1
Underlying EBIT
255.6
487.1
(281.5)
(231.5)
255.6
50.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(29.9)
–
–
–
(29.9)
–
–
–
–
–
–
–
(29.9)
–
–
(0.8)
(29.9)
(29.9)
–
(0.8)
–
(0.8)
–
–
(30.7)
(0.8)
–
(30.7)
(29.9)
(0.8)
–
(0.8)
(30.7)
Exploration &
Development
Exploration &
$m
Development
–
$m
–
–
–
–
–
–
Exploration &
Development
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1.3)
–
–
(9.6)
(1.3)
–
–
(9.6)
–
–
–
–
–
–
–
(10.9)
–
(1.3)
–
(10.9)
(9.6)
–
–
–
–
–
–
(10.9)
–
–
(10.9)
(10.9)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(27.5)
–
–
–
(27.5)
–
(4.6)
–
–
–
(4.6)
–
20.7
–
–
(11.4)
20.7
(27.5)
(2.8)
(11.4)
–
–
(2.8)
(4.6)
(2.8)
–
–
(14.2)
(2.8)
20.7
(14.2)
(11.4)
(2.8)
–
(2.8)
(87.0)
(351.7)
794.5
(54.1)
(87.0)
182.0
(23.3)
(54.1)
(97.1)
(47.9)
(23.3)
879.4
148.1
(47.9)
(351.7)
34.2
148.1
(87.0)
(381.7)
34.2
(54.1)
(43.0)
(381.7)
(23.3)
(41.0)
(43.0)
(47.9)
(7.6)
(41.0)
148.1
(4.4)
(7.6)
34.2
33.2
(4.4)
(381.7)
434.9
33.2
(43.0)
(285.1)
434.9
(41.0)
50.0
(285.1)
(7.6)
(235.1)
50.0
(4.4)
199.8
(235.1)
33.2
2.9
199.8
434.9
(63.1)
2.9
(285.1)
139.6
(63.1)
50.0
(9.4)
139.6
(235.1)
130.2
(9.4)
199.8
(10.9)
(14.2)
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Net finance income
Income tax expense
The above Segment Note for the year ended 31 December 2015 has been restated to reflect changes in line with segment information reported for 2016, and
reflects the manner in which information is reported internally.
The above Segment Note for the year ended 31 December 2015 has been restated to reflect changes in line with segment information reported for 2016, and
reflects the manner in which information is reported internally.
Underlying Net Profit after tax
130.2
2.9
(63.1)
139.6
Non underlying items net of tax1
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
(9.4)
130.2
The above Segment Note for the year ended 31 December 2015 has been restated to reflect changes in line with segment information reported for 2016, and
reflects the manner in which information is reported internally.
1 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
1 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
1 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
57
57
57
58
2 Earnings per share
Basic and diluted earnings per share – cents
Basic and diluted earnings per share
Profit after tax
share
2016
35.7
2015
42.9
107.8
130.2
Reconciliation of earnings used in calculating basic and diluted earnings per share – $ millions
Weighted average number of ordinary shares on issue used in the calculation of basic earnings per
301,740,328
303,433,159
Basic earnings per share is calculated by dividing the profit attributable to equity holders of OZ Minerals Limited, by the weighted average number of ordinary
shares outstanding during the financial year. The weighted average is determined by the total number of shares on issue less treasury shares held by the
Company throughout the period.
Diluted earnings per share adjusts the amounts used in the determination of basic earnings per share to take into account dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Income tax expense comprises current and deferred tax. Current and deferred tax expenses are recognised in Other Comprehensive Income or directly in equity is
3 Income tax
as appropriate.
Recoverability of deferred tax assets
the determination is made.
periods.
Tax consolidation
tax consolidated group.
The Consolidated Entity is subject to income taxes of Australia and jurisdictions where it has foreign operations. Significant judgement is required in the
application of income tax legislation to determine the provision for income taxes. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain, and for which provisions are based on estimated amounts. Where the final tax outcome
of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provision in the period in which
Assumptions about the generation of future taxable profits influence the ability of the Consolidated Entity to recognise (or continue to recognise) deferred tax
assets. Taxable profit estimates are based on estimated future production and sales volumes, commodity prices, foreign exchange rates, operating costs,
restoration costs and capital expenditure. A change in these assumptions may impact the amount of deferred tax assets recognised in the balance sheet in future
OZ Minerals Limited and its wholly-owned Australian controlled entities are part of a tax consolidated group. OZ Minerals Limited is the head company of the
Income tax expense in the Income Statement
Current income tax (expense)/benefit
Deferred income tax (expense)/benefit
Income tax (expense)/benefit
2016
$m
(69.0)
40.6
(28.4)
2015
$m
–
(59.5)
(59.5)
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Perfomance
Group Perfomance
Notes to the Consolidated Financial Statements
Group Perfomance
Net Revenue
Treatment and refining charges
31 December 2015
Prominent Hill
(97.1)
879.4
Carrapateena
Corporate
–
–
Consolidated
(97.1)
879.4
Prominent Hill
Carrapateena
Corporate
Consolidated
Prominent Hill
Carrapateena
Corporate
Consolidated
31 December 2015
31 December 2015
Revenue – Copper
Revenue – Gold and Silver
Revenue – Copper
Treatment and refining charges
Revenue – Gold and Silver
Mining
Net Revenue
Processing
Mining
Revenue – Copper
Transport
Processing
Revenue – Gold and Silver
Transport
Site general and administration
Treatment and refining charges
Royalties
Site general and administration
Net Revenue
Deferred waste adjustment
Royalties
Mining
Inventory adjustment
Deferred waste adjustment
Processing
Cost of goods sold
Inventory adjustment
Transport
Corporate general and administration
Cost of goods sold
Site general and administration
Exploration and other income/(expenses)
Corporate general and administration
Royalties
Restructuring costs
Exploration and other income/(expenses)
Deferred waste adjustment
Net realisable value adjustments
Restructuring costs
Inventory adjustment
Foreign exchange gain
Net realisable value adjustments
Cost of goods sold
Underlying EBITDA
Foreign exchange gain
Corporate general and administration
Depreciation of PPE
Underlying EBITDA
Exploration and other income/(expenses)
Capitalised depreciation into inventory
Depreciation of PPE
Restructuring costs
Net Depreciation
Capitalised depreciation into inventory
Net realisable value adjustments
Underlying EBIT
Net Depreciation
Foreign exchange gain
Net finance income
Underlying EBIT
Underlying EBITDA
Income tax expense
Net finance income
Depreciation of PPE
Income tax expense
Underlying Net Profit after tax
Capitalised depreciation into inventory
Non underlying items net of tax1
Underlying Net Profit after tax
Net Depreciation
$m
$m
794.5
182.0
794.5
(97.1)
182.0
$m
(351.7)
879.4
(87.0)
(351.7)
794.5
(54.1)
(87.0)
182.0
(23.3)
(54.1)
(97.1)
(47.9)
(23.3)
879.4
148.1
(47.9)
(351.7)
34.2
148.1
(87.0)
(381.7)
34.2
(54.1)
(381.7)
(14.2)
(23.3)
(1.5)
(14.2)
(47.9)
(3.0)
(1.5)
148.1
(4.4)
(3.0)
34.2
12.5
(4.4)
(381.7)
487.1
12.5
(14.2)
(281.5)
487.1
(1.5)
50.0
(281.5)
(3.0)
(231.5)
50.0
(4.4)
255.6
(231.5)
12.5
255.6
487.1
(281.5)
50.0
(231.5)
$m
$m
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(29.9)
–
–
(29.9)
–
–
(29.9)
–
(0.8)
(29.9)
(29.9)
(0.8)
–
–
(0.8)
–
–
(30.7)
(0.8)
–
(30.7)
(29.9)
(0.8)
–
(0.8)
Exploration &
Development
Exploration &
$m
Development
–
$m
Exploration &
Development
–
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1.3)
–
–
(9.6)
(1.3)
–
(9.6)
–
–
(10.9)
–
(1.3)
(10.9)
(9.6)
–
(10.9)
–
–
(10.9)
(10.9)
$m
$m
–
$m
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(27.5)
–
–
(27.5)
–
–
(4.6)
–
–
(4.6)
–
–
20.7
–
–
(11.4)
20.7
(27.5)
(2.8)
(11.4)
–
–
(2.8)
(4.6)
(2.8)
–
–
(14.2)
(2.8)
20.7
(14.2)
(11.4)
(2.8)
–
(2.8)
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Non underlying items net of tax1
Underlying EBIT
255.6
(30.7)
(10.9)
(14.2)
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
Net finance income
The above Segment Note for the year ended 31 December 2015 has been restated to reflect changes in line with segment information reported for 2016, and
130.2
2.9
reflects the manner in which information is reported internally.
Income tax expense
The above Segment Note for the year ended 31 December 2015 has been restated to reflect changes in line with segment information reported for 2016, and
reflects the manner in which information is reported internally.
Underlying Net Profit after tax
Non underlying items net of tax1
Net Profit for the year attributable to equity holders of OZ Minerals Ltd
The above Segment Note for the year ended 31 December 2015 has been restated to reflect changes in line with segment information reported for 2016, and
reflects the manner in which information is reported internally.
$m
$m
794.5
182.0
794.5
(97.1)
182.0
$m
(351.7)
879.4
(87.0)
(351.7)
794.5
(54.1)
(87.0)
182.0
(23.3)
(54.1)
(97.1)
(47.9)
(23.3)
879.4
148.1
(47.9)
(351.7)
34.2
148.1
(87.0)
(381.7)
34.2
(54.1)
(381.7)
(43.0)
(23.3)
(41.0)
(43.0)
(47.9)
(7.6)
(41.0)
148.1
(4.4)
(7.6)
34.2
33.2
(4.4)
(381.7)
434.9
33.2
(43.0)
(285.1)
434.9
(41.0)
50.0
(285.1)
(7.6)
(235.1)
50.0
(4.4)
199.8
(235.1)
33.2
2.9
199.8
434.9
(63.1)
2.9
(285.1)
139.6
(63.1)
50.0
(9.4)
139.6
(235.1)
130.2
(9.4)
199.8
(63.1)
139.6
(9.4)
130.2
1 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
1 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
1 Non underlying items net of tax include the legal costs associated with the Class Action. Refer to Note 16 for further discussion.
57
57
57
Notes to the Consolidated Financial Statements
Group Perfomance
2 Earnings per share
Basic and diluted earnings per share – cents
Basic and diluted earnings per share
Reconciliation of earnings used in calculating basic and diluted earnings per share – $ millions
Profit after tax
Weighted average number of ordinary shares on issue used in the calculation of basic earnings per
share
2016
35.7
2015
42.9
107.8
130.2
301,740,328
303,433,159
Basic earnings per share is calculated by dividing the profit attributable to equity holders of OZ Minerals Limited, by the weighted average number of ordinary
shares outstanding during the financial year. The weighted average is determined by the total number of shares on issue less treasury shares held by the
Company throughout the period.
Diluted earnings per share adjusts the amounts used in the determination of basic earnings per share to take into account dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
3 Income tax
Income tax expense comprises current and deferred tax. Current and deferred tax expenses are recognised in Other Comprehensive Income or directly in equity is
as appropriate.
Recoverability of deferred tax assets
The Consolidated Entity is subject to income taxes of Australia and jurisdictions where it has foreign operations. Significant judgement is required in the
application of income tax legislation to determine the provision for income taxes. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain, and for which provisions are based on estimated amounts. Where the final tax outcome
of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provision in the period in which
the determination is made.
Assumptions about the generation of future taxable profits influence the ability of the Consolidated Entity to recognise (or continue to recognise) deferred tax
assets. Taxable profit estimates are based on estimated future production and sales volumes, commodity prices, foreign exchange rates, operating costs,
restoration costs and capital expenditure. A change in these assumptions may impact the amount of deferred tax assets recognised in the balance sheet in future
periods.
Tax consolidation
OZ Minerals Limited and its wholly-owned Australian controlled entities are part of a tax consolidated group. OZ Minerals Limited is the head company of the
tax consolidated group.
Income tax expense in the Income Statement
Current income tax (expense)/benefit
Deferred income tax (expense)/benefit
Income tax (expense)/benefit
58
2016
$m
(69.0)
40.6
(28.4)
2015
$m
–
(59.5)
(59.5)
135
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Perfomance
Group Performance
Notes to the Consolidated Financial Statements
Group Perfomance
Reconciliation of income tax expense to pre-tax profit
Unrecognised tax losses
Profit before income tax
Income tax expense at the Australian tax rate of 30 per cent
Adjustments:
Non-deductible expenditure
Revision for prior periods
Recognition of previously unrecognised tax losses
Income tax expense
Deferred tax assets and liabilities
During the year, $13.6 million of restricted tax losses were recognised in the Balance Sheet. Restricted tax losses of $178.1 million tax effected (2015: $191.4
million tax effected) remain unrecognised in the Balance Sheet at 31 December 2016, after adjusting for $0.3 million that was previously assessed as non-
recoverable. Capital tax losses of $592.5 million tax effected (2015: $592.5 million tax effected) remain unrecognised in the Balance Sheet at 31 December
2016
$m
136.2
(40.9)
(2.1)
1.0
13.6
(28.4)
2015
$m
189.7
(56.9)
(2.1)
(0.5)
–
(59.5)
Recognition and measurement of income taxes
2016.
Current tax
payable in respect of previous years.
Deferred tax
The tax currently payable is based on taxable profit for the year, using rates enacted or substantively enacted at reporting date, and any adjustments to tax
Opening
balance
$m
Recognised in
Income
Statement
$m
Recognised in
Equity
Closing balance
$m
$m
2016
Unrestricted tax losses and offsets
Restricted tax losses
Property plant and equipment
Inventories
Provisions and accruals
Derivative Financial Instruments
Other
8.3
49.0
(170.6)
(4.8)
10.5
–
5.0
(8.3)
0.5
35.0
–
0.7
3.3
9.4
Net deferred tax liabilities
(102.6)
40.6
2015
Unrestricted tax losses and offsets
Restricted tax losses
Property plant and equipment
Inventories
Provisions and accruals
Other
74.7
54.4
(179.5)
(5.3)
10.1
2.5
(66.4)
(5.4)
8.9
0.5
0.4
2.5
Net deferred tax liabilities
(43.1)
(59.5)
–
–
–
–
–
(1.5)
–
(1.5)
–
–
–
–
–
–
–
–
49.5
(135.6)
(4.8)
11.2
1.8
14.4
(63.5)
8.3
49.0
(170.6)
(4.8)
10.5
5.0
(102.6)
Recognised restricted tax losses are subject to an available fraction which limits the amount of these losses that can be utilised each year and may only be
utilised after unrestricted tax losses are utilised. Recognised unrestricted tax losses and tax offsets have no restrictions, and under current legislation, do not
have an expiry date.
59
60
Deferred tax assets and liabilities are determined using the balance sheet method which calculates temporary differences based on the difference between the
carrying amount of the Consolidated Entity’s assets and liabilities in the balance sheet and their associated tax bases.
Deferred tax assets and liabilities are not recognised for temporary differences arising from investments in subsidiaries where the consolidated entity is able to
control the reversal of the temporary differences, and it is probable they will not reverse in the foreseeable future. Deferred tax assets are recognised, to the
extent that it is probable that future taxable income will be available to utilise them.
The carrying amount of deferred tax assets is reviewed at the end of each reporting date and adjusted based on estimates of future taxable income and or
capital gains against which the deferred tax asset could be utilised.
Deferred tax assets and liabilities are measured at the tax rates applicable to each jurisdiction which are expected to apply in the period when the assets are
realised or liabilities discharged and are offset where they relate to the same tax authority and there is a legally enforceable right to offset.
4 Dividends
Since the end of the financial year, the Board of Directors has resolved to pay a fully franked dividend of 14.0 cents per share, to be paid on 24 March 2017.
The record date for entitlement to this dividend is 10 March 2017. The financial impact of the dividend amounting to $41.8 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2016, and will be recognised in subsequent Consolidated Financial Statements.
The details in relation to dividends announced or paid since 1 January 2015 are set out below:
Record date
Date of payment
Unfranked
cents per share(a)
Fully franked
cents per share
Total dividends $m
10 March 2017
9 September 2016
24 February 2016
24 March 2017
23 September 2016
10 March 2016
10 September 2015
24 September 2015
–
6
14
6
(a) For Australian income tax purposes, all unfranked dividends were declared to be conduit foreign income
14
–
–
–
41.8
18.1
42.5
18.2
Finance
Notes to the Consolidated Financial Statements
Group Perfomance
Notes to the Consolidated Financial Statements
Group Perfomance
Reconciliation of income tax expense to pre-tax profit
Unrecognised tax losses
Income tax expense at the Australian tax rate of 30 per cent
Profit before income tax
Adjustments:
Non-deductible expenditure
Revision for prior periods
Recognition of previously unrecognised tax losses
Income tax expense
Deferred tax assets and liabilities
2016
Unrestricted tax losses and offsets
Restricted tax losses
Property plant and equipment
Inventories
Provisions and accruals
Derivative Financial Instruments
Other
2015
Unrestricted tax losses and offsets
Restricted tax losses
Property plant and equipment
Inventories
Provisions and accruals
Other
Recognised in
Recognised in
Closing balance
Opening
balance
$m
Income
Statement
$m
Equity
$m
2016
$m
136.2
(40.9)
(2.1)
1.0
13.6
(28.4)
(1.5)
–
–
–
–
–
–
–
–
–
–
–
–
–
2015
$m
189.7
(56.9)
(2.1)
(0.5)
–
(59.5)
$m
–
49.5
(135.6)
(4.8)
11.2
1.8
14.4
(63.5)
8.3
49.0
(170.6)
(4.8)
10.5
5.0
(102.6)
8.3
49.0
(170.6)
(4.8)
10.5
–
5.0
74.7
54.4
(179.5)
(5.3)
10.1
2.5
(8.3)
0.5
35.0
–
0.7
3.3
9.4
(66.4)
(5.4)
8.9
0.5
0.4
2.5
Net deferred tax liabilities
(43.1)
(59.5)
Recognised restricted tax losses are subject to an available fraction which limits the amount of these losses that can be utilised each year and may only be
utilised after unrestricted tax losses are utilised. Recognised unrestricted tax losses and tax offsets have no restrictions, and under current legislation, do not
have an expiry date.
During the year, $13.6 million of restricted tax losses were recognised in the Balance Sheet. Restricted tax losses of $178.1 million tax effected (2015: $191.4
million tax effected) remain unrecognised in the Balance Sheet at 31 December 2016, after adjusting for $0.3 million that was previously assessed as non-
recoverable. Capital tax losses of $592.5 million tax effected (2015: $592.5 million tax effected) remain unrecognised in the Balance Sheet at 31 December
2016.
Recognition and measurement of income taxes
Current tax
The tax currently payable is based on taxable profit for the year, using rates enacted or substantively enacted at reporting date, and any adjustments to tax
payable in respect of previous years.
Deferred tax
Deferred tax assets and liabilities are determined using the balance sheet method which calculates temporary differences based on the difference between the
carrying amount of the Consolidated Entity’s assets and liabilities in the balance sheet and their associated tax bases.
Deferred tax assets and liabilities are not recognised for temporary differences arising from investments in subsidiaries where the consolidated entity is able to
control the reversal of the temporary differences, and it is probable they will not reverse in the foreseeable future. Deferred tax assets are recognised, to the
extent that it is probable that future taxable income will be available to utilise them.
The carrying amount of deferred tax assets is reviewed at the end of each reporting date and adjusted based on estimates of future taxable income and or
capital gains against which the deferred tax asset could be utilised.
Deferred tax assets and liabilities are measured at the tax rates applicable to each jurisdiction which are expected to apply in the period when the assets are
realised or liabilities discharged and are offset where they relate to the same tax authority and there is a legally enforceable right to offset.
4 Dividends
Since the end of the financial year, the Board of Directors has resolved to pay a fully franked dividend of 14.0 cents per share, to be paid on 24 March 2017.
The record date for entitlement to this dividend is 10 March 2017. The financial impact of the dividend amounting to $41.8 million has not been recognised in
the Consolidated Financial Statements for the year ended 31 December 2016, and will be recognised in subsequent Consolidated Financial Statements.
The details in relation to dividends announced or paid since 1 January 2015 are set out below:
Net deferred tax liabilities
(102.6)
40.6
(1.5)
Record date
Date of payment
10 March 2017
9 September 2016
24 February 2016
24 March 2017
23 September 2016
10 March 2016
10 September 2015
24 September 2015
Unfranked
cents per share(a)
–
6
14
6
Fully franked
cents per share
Total dividends $m
14
–
–
–
41.8
18.1
42.5
18.2
(a) For Australian income tax purposes, all unfranked dividends were declared to be conduit foreign income
59
60
137
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
5 Inventories
Net realisable value of inventories
Inventories are recognised at the lower of cost and net realisable value (‘NRV’).
Net realisable value of ore is based on the estimated amount expected to be received when the ore is processed and sold, less incremental costs to convert
the ore to concentrate and selling costs. The computation of net realisable value for stockpiles involves significant judgements and estimates in relation to
future ore blend rates, timing of processing, processing costs, commodity prices, foreign exchange rates, discount rates and the ultimate timing of sale of
concentrates produced. A change in any of these critical assumptions will alter the estimated net realisable value and may therefore impact the carrying value
of inventories.
250
200
)
m
$
(
l
e
u
a
V
y
r
o
t
n
e
v
n
I
150
100
50
0
48.2
28.9
Concentrates at
cost
228.6
A net realisable value inventory adjustment to reduce the value of inventory of $10.5 million in respect of low grade gold ore stockpiles was recognised in
127.7
131.4
109.8
92.6
76.8
Ore stockpile
(Current) at cost
Ore stockpile
(Non Current) at
cost
Ore stockpile
(Non Current) at
NRV
2016
2015
21.2
21.7
Stores and
consumables at
cost
61
62
Concentrates – at cost
Ore Stockpile – at cost
Stores and consumables – at cost
Inventories – current
Ore Stockpile – non-current at cost
Ore Stockpile – non-current at net realisable value
Inventories – non-current
Total Inventories
2016 (2015: $4.4 million).
2016
$m
48.2
127.7
21.2
197.1
228.6
131.4
360.0
557.1
2015
$m
28.9
92.6
21.7
143.2
76.8
109.8
186.6
329.8
Recognition and measurement of inventories
Inventory is valued at the lower of cost incurred in bringing product to its present location and condition and net realisable value.
Costs are assigned to individual items of inventory on the basis of weighted average costs. Cost comprises direct materials and labour, and a proportion of
overhead expenditure directly related to the production of inventories. Expenditure directly related to the production of inventories includes processing costs,
transportation costs to the point of sale, and depreciation of plant and equipment and mining property and development assets, the latter of which includes
deferred stripping assets and mine rehabilitation costs incurred in the mining process.
Net realisable value is calculated by estimating the value that is expected to be realised upon sale of concentrate after deducting estimated costs of
processing, and selling costs. This estimation is based on assumptions of future prices and costs, as well as expected future ore blend rates and timing of
Inventories expected to be processed or sold within twelve months after balance date are classified as current assets, all other inventories are classified as
processing.
non-current.
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
5 Inventories
Net realisable value of inventories
Inventories are recognised at the lower of cost and net realisable value (‘NRV’).
Net realisable value of ore is based on the estimated amount expected to be received when the ore is processed and sold, less incremental costs to convert
the ore to concentrate and selling costs. The computation of net realisable value for stockpiles involves significant judgements and estimates in relation to
future ore blend rates, timing of processing, processing costs, commodity prices, foreign exchange rates, discount rates and the ultimate timing of sale of
Concentrates – at cost
Ore Stockpile – at cost
Stores and consumables – at cost
Inventories – current
Ore Stockpile – non-current at cost
concentrates produced. A change in any of these critical assumptions will alter the estimated net realisable value and may therefore impact the carrying value
Ore Stockpile – non-current at net realisable value
Inventories – non-current
Total Inventories
2016
$m
48.2
127.7
21.2
197.1
228.6
131.4
360.0
557.1
2015
$m
28.9
92.6
21.7
143.2
76.8
109.8
186.6
329.8
A net realisable value inventory adjustment to reduce the value of inventory of $10.5 million in respect of low grade gold ore stockpiles was recognised in
2016 (2015: $4.4 million).
Recognition and measurement of inventories
Inventory is valued at the lower of cost incurred in bringing product to its present location and condition and net realisable value.
Costs are assigned to individual items of inventory on the basis of weighted average costs. Cost comprises direct materials and labour, and a proportion of
overhead expenditure directly related to the production of inventories. Expenditure directly related to the production of inventories includes processing costs,
transportation costs to the point of sale, and depreciation of plant and equipment and mining property and development assets, the latter of which includes
deferred stripping assets and mine rehabilitation costs incurred in the mining process.
Net realisable value is calculated by estimating the value that is expected to be realised upon sale of concentrate after deducting estimated costs of
processing, and selling costs. This estimation is based on assumptions of future prices and costs, as well as expected future ore blend rates and timing of
processing.
Inventories expected to be processed or sold within twelve months after balance date are classified as current assets, all other inventories are classified as
non-current.
of inventories.
250
200
)
m
$
(
e
u
l
a
V
y
r
o
t
n
e
v
n
I
150
100
50
0
48.2
28.9
Concentrates at
cost
228.6
127.7
131.4
109.8
92.6
76.8
Ore stockpile
Ore stockpile
Ore stockpile
(Current) at cost
(Non Current) at
(Non Current) at
cost
NRV
2016
2015
21.2
21.7
Stores and
consumables at
cost
61
62
139
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
6 Operating cash flows
The Consolidated Entity’s operating cash flow reconciled to profit after tax is as follows:
7 Property, Plant and Equipment
Profit after tax for the year
Adjustments for:
Depreciation
Lease amortisation
FX gain/(loss) on cash balances
Dividends classified as investing activities
Share based payments
Other items
Change in assets and liabilities:
Trade and other receivables
Prepayments
Inventories
Trade and other payables
Provision for employee benefits
Provision for demobilisation and other provisions
Net current and deferred tax liability
Net cash inflow from operating activities
2016
$m
107.8
2015
$m
130.2
361.5
285.1
7.3
1.2
–
6.9
9.6
25.9
–
(227.3)
5.2
(1.8)
(0.7)
28.5
324.1
7.4
(3.1)
(1.0)
3.6
3.4
29.2
1.1
(76.4)
(11.6)
(1.4)
3.8
59.5
429.8
Recognition and measurement of cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents comprise short-term and highly liquid cash deposits that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of change in value. For the purposes of the Consolidated Statement of Cash Flows, cash
includes cash on hand, demand deposits and cash equivalents.
63
Plant and
Mine property
Freehold land
Capital work
equipment
and
and buildings
in progress
Total
$m
$m
development
$m
$m
1,139.6
1,621.2
Accumulated depreciation and impairment losses
(794.6)
(1,063.6)
Closing carrying amount
345.0
557.6
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Transfer of Tunnel Boring Machine to Assets held for sale
Depreciation expense
Closing carrying amount
389.6
9.4
–
(54.0)
345.0
774.5
82.1
–
(299.0)
557.6
Plant and
Mine property
Freehold land
Capital work
equipment
and
and buildings
in progress
$m
development
$m
2016
At cost
2015
At cost
$m
21.2
–
21.2
22.2
8.4
(9.4)
–
21.2
$m
22.2
–
22.2
(103.7)
7.9
–
–
–
–
2,969.3
(1,978.7)
990.6
1,261.8
99.7
(9.4)
(361.5)
990.6
Total
$m
2,879.0
(1,617.2)
1,261.8
250.8
(9.8)
9.8
(46.4)
10.7
(285.1)
118.0
1,331.8
22.2
1,261.8
187.3
(120.5)
66.8
75.5
(0.2)
–
(8.5)
66.8
187.5
(112.0)
75.5
87.5
1.2
–
–
–
–
(13.2)
75.5
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Disposals – at cost
Accumulated depreciation on disposals
Malu underground pre commissioning revenue adjustment
Increase in mine rehabilitation asset – Note 10
Depreciation expense
Closing carrying amount
Recognition and measurement of property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items and costs incurred in bringing assets into use.
Mine property and development assets include costs transferred from exploration and evaluation assets once technical feasibility and commercial viability of
an area of interest are demonstrable. After transfer, all subsequent expenditures to develop the mine to the production phase which are considered to benefit
mining operations in future periods are capitalised.
The proceeds from sale of any concentrate produced from ore extracted and processed as part of development of the asset prior to being deemed ready for
use, less any further processing and selling costs incurred, is deducted from the cost of the asset.
$m
1,539.1
(764.6)
774.5
685.8
335.8
–
–
(54.3)
10.7
(203.5)
774.5
1,130.2
(740.6)
389.6
440.5
17.5
(9.8)
9.8
–
–
(68.4)
389.6
64
Finance
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
7 Property, Plant and Equipment
2016
At cost
Plant and
equipment
$m
Mine property
and
development
$m
1,139.6
1,621.2
Accumulated depreciation and impairment losses
(794.6)
(1,063.6)
Closing carrying amount
345.0
557.6
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Transfer of Tunnel Boring Machine to Assets held for sale
Depreciation expense
Closing carrying amount
389.6
9.4
–
(54.0)
345.0
774.5
82.1
–
(299.0)
557.6
Freehold land
and buildings
$m
Capital work
in progress
$m
187.3
(120.5)
66.8
75.5
(0.2)
–
(8.5)
66.8
21.2
–
21.2
22.2
8.4
(9.4)
–
21.2
6 Operating cash flows
The Consolidated Entity’s operating cash flow reconciled to profit after tax is as follows:
Profit after tax for the year
Adjustments for:
Depreciation
Lease amortisation
FX gain/(loss) on cash balances
Dividends classified as investing activities
Share based payments
Other items
Change in assets and liabilities:
Trade and other receivables
Prepayments
Inventories
Trade and other payables
Provision for employee benefits
Provision for demobilisation and other provisions
Net current and deferred tax liability
Net cash inflow from operating activities
361.5
285.1
2016
$m
107.8
7.3
1.2
–
6.9
9.6
25.9
–
(227.3)
5.2
(1.8)
(0.7)
28.5
324.1
2015
$m
130.2
7.4
(3.1)
(1.0)
3.6
3.4
29.2
1.1
(76.4)
(11.6)
(1.4)
3.8
59.5
429.8
Recognition and measurement of cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents comprise short-term and highly liquid cash deposits that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of change in value. For the purposes of the Consolidated Statement of Cash Flows, cash
includes cash on hand, demand deposits and cash equivalents.
Plant and
equipment
$m
Mine property
and
development
$m
Freehold land
and buildings
$m
Capital work
in progress
$m
2015
At cost
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Disposals – at cost
Accumulated depreciation on disposals
Malu underground pre commissioning revenue adjustment
Increase in mine rehabilitation asset – Note 10
Depreciation expense
Closing carrying amount
1,130.2
(740.6)
389.6
440.5
17.5
(9.8)
9.8
–
–
(68.4)
389.6
1,539.1
(764.6)
774.5
685.8
335.8
–
–
(54.3)
10.7
(203.5)
774.5
187.5
(112.0)
75.5
87.5
1.2
–
–
–
–
(13.2)
75.5
22.2
–
22.2
2,879.0
(1,617.2)
1,261.8
118.0
1,331.8
(103.7)
–
–
7.9
–
–
250.8
(9.8)
9.8
(46.4)
10.7
(285.1)
22.2
1,261.8
Total
$m
2,969.3
(1,978.7)
990.6
1,261.8
99.7
(9.4)
(361.5)
990.6
Total
$m
Recognition and measurement of property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items and costs incurred in bringing assets into use.
Mine property and development assets include costs transferred from exploration and evaluation assets once technical feasibility and commercial viability of
an area of interest are demonstrable. After transfer, all subsequent expenditures to develop the mine to the production phase which are considered to benefit
mining operations in future periods are capitalised.
The proceeds from sale of any concentrate produced from ore extracted and processed as part of development of the asset prior to being deemed ready for
use, less any further processing and selling costs incurred, is deducted from the cost of the asset.
141
63
64
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
7 Property, Plant and Equipment
2016
At cost
2015
At cost
Accumulated depreciation and impairment losses
(794.6)
(1,063.6)
Closing carrying amount
345.0
557.6
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Transfer of Tunnel Boring Machine to Assets held for sale
Depreciation expense
Closing carrying amount
389.6
9.4
–
(54.0)
345.0
774.5
82.1
–
(299.0)
557.6
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Disposals – at cost
Accumulated depreciation on disposals
Malu underground pre commissioning revenue adjustment
Increase in mine rehabilitation asset – Note 10
1,130.2
(740.6)
389.6
440.5
17.5
(9.8)
9.8
–
–
$m
1,539.1
(764.6)
774.5
685.8
335.8
–
–
(54.3)
10.7
Plant and
Mine property
Freehold land
Capital work
equipment
and
and buildings
in progress
Total
$m
$m
development
$m
$m
1,139.6
1,621.2
Plant and
Mine property
Freehold land
Capital work
equipment
and
and buildings
in progress
$m
development
$m
$m
21.2
–
21.2
22.2
8.4
(9.4)
–
21.2
$m
22.2
–
22.2
(103.7)
–
–
7.9
–
–
2,969.3
(1,978.7)
990.6
1,261.8
99.7
(9.4)
(361.5)
990.6
Total
$m
2,879.0
(1,617.2)
1,261.8
250.8
(9.8)
9.8
(46.4)
10.7
(285.1)
118.0
1,331.8
22.2
1,261.8
187.3
(120.5)
66.8
75.5
(0.2)
–
(8.5)
66.8
187.5
(112.0)
75.5
87.5
1.2
–
–
–
–
(13.2)
75.5
Depreciation expense
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Closing carrying amount
Net Cash and Capital Employed
Net Cash and Capital Employed
Recognition and measurement of property, plant and equipment
(203.5)
(68.4)
774.5
389.6
Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items and costs incurred in bringing assets into use.
Mine property and development assets include costs transferred from exploration and evaluation assets once technical feasibility and commercial viability of
an area of interest are demonstrable. After transfer, all subsequent expenditures to develop the mine to the production phase which are considered to benefit
mining operations in future periods are capitalised.
The proceeds from sale of any concentrate produced from ore extracted and processed as part of development of the asset prior to being deemed ready for
use, less any further processing and selling costs incurred, is deducted from the cost of the asset.
The present value of the expected cost of decommissioning an asset after its use is included in the cost of the respective asset if the recognition criteria for a
provision are met.
64
Property Plant and Equipment is tested for impairment when there is an indication of impairment. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash inflows. An impairment loss is recognised for the amount by which the asset or
Directors’ Report
CGU carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to dispose and value in use.
Assets that have been impaired are reviewed for possible reversal of impairment at each reporting date.
Value in use is the net amount expected to be recovered through cash flows arising from continued use and subsequent disposal of an asset (or group of
assets). In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
Directors’ Report
assessments of the time value of money and risks specific to the asset.
The asset’s fair value less costs to dispose is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between
knowledgeable, willing parties, less the estimated costs of disposal.
Directors’ Report
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
appropriate resource valuation multiple to the contained copper equivalent within these resources.
Operational and Financial Review
Recoverability of assets
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
The Consolidated Entity undertook a review of the carrying value of the Prominent Hill CGU and determined that no adjustment to the carrying value was
positioned for growth.
necessary. The recoverable amount was estimated on the basis of Fair Value Less Cost to Dispose and based upon an internal discounted cash flow for
Operational and Financial Review
presently approved mine plans and an estimate of the value of resources known to exist but not yet included in mine plans. The latter was estimated from
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
independent publically available information for recent transactions involving comparable resources. No value was ascribed to exploration potential associated
copper deposits at Carrapateena.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operational and Financial Review
with the CGU despite the prospectivity of the region.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
Significant estimates and judgements are made in estimating the recoverable amount including future cash flows, commodity prices, foreign exchange rates,
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
costs and mine plans. Key areas of judgement and assumptions include the following:
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
copper deposits at Carrapateena.
• Future cash flows are based on latest internal budgets and forecasts which reflect expectations of the volume and grade of ore to be mined and
positioned for growth.
• Copper guidance achieved for 2016 and for the second consecutive year;
processed, mine plans, sales, short and long term commodity prices and exchange rates, operating and capital costs and operational assumptions. These
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
estimates are based on past experience, current market conditions and expectation of future changes to the market in which the CGU operates.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Commodity price and exchange rate assumptions were based on consensus of independent industry analysts and commentators.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
commitment to operating discipline. Highlights for Prominent Hill were:
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Mineral resources not modelled in Board approved budgets are included in the assessment of fair value less cost to dispose based on the application of an
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
commitment to operating discipline. Highlights for Prominent Hill were:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the project is currently underway with a number of milestones achieved in 2016:
• Discount rate applied to the cash flows which would be applied by a market participant in considering the value of the CGU and is reflective of current
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Successful completion of the PFS with robust financials and short payback period;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Construction commenced on the Tjati decline; and
The valuation is sensitive to such assumptions which are subject to change as a result of changing economic and operational conditions. As a result, changes
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
in key assumptions will alter the estimate of recoverable amount and consequently it could in the absence of other factors require a change to the carrying
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
of the project is currently underway with a number of milestones achieved in 2016:
value of assets associated with the Prominent Hill CGU in the future.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
location of the facility.
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Construction commenced on the Tjati decline; and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
companies which provides exploration expertise in specific geologies and locations.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
location of the facility.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
Australian and Northern Territory borders.
market conditions. A real post-tax discount rate of 9.5 per cent (2015: 9.5 per cent) was used in 2016.
65
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
12
12
12
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
The depreciation methods adopted by the Consolidated Entity are provided in the table below:
Category
Freehold land
Depreciation method
Not depreciated
Buildings and other infrastructure
Straight line over life of mine
Short term plant and equipment
Straight line over life of asset
Processing plant
Units of ore milled over mining inventory
Mine property and development
Units of ore extracted over mining inventory applicable to the development
Depreciation of assets commences when the assets are ready for their intended use. The depreciation of mine property and development commences when
the mine is commissioned or deemed ready for use.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each reporting period and adjusted
prospectively, if appropriate. Where depreciation rates are changed, the net written down value of the asset is depreciated from the date of the change in
accordance with the new depreciation rate, with the change accounted for as a change in accounting estimate.
During 2016, the useful life of mine property and development and processing plant assets were reassessed and are now based on mining inventory, which
includes both resources and reserves. This more closely aligns benefits received by the assets from their use.
Ore reserves and resources estimates
The estimated quantities of economically recoverable reserves and resources are based upon interpretations of geological and geophysical models and require
assumptions to be made regarding exchange rates, commodity prices, future capital requirements and future operating performance.
Changes in reported reserves and resources estimates can impact the carrying value of property, plant and equipment including deferred mining expenditure,
intangible assets, capitalised exploration, provisions for mine rehabilitation, restoration and dismantling obligations, recognition of deferred tax assets, as well
as the amount of depreciation charged to the Income Statement.
Changes in the carrying value of the assets may arise principally through changes in the income that can be economically generated from each project.
Changes in depreciation expense may arise through a change in the useful life over which property, plant and equipment is depreciated.
66
Finance
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Plant and
Mine property
Freehold land
Capital work
equipment
and
and buildings
in progress
Total
$m
$m
development
$m
$m
1,139.6
1,621.2
7 Property, Plant and Equipment
2016
At cost
2015
At cost
Accumulated depreciation and impairment losses
(794.6)
(1,063.6)
Closing carrying amount
345.0
557.6
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Transfer of Tunnel Boring Machine to Assets held for sale
Depreciation expense
Closing carrying amount
389.6
9.4
–
(54.0)
345.0
774.5
82.1
–
(299.0)
557.6
Accumulated depreciation and impairment losses
Closing carrying amount
Reconciliation of carrying amounts
Opening carrying amount
Additions and transfers including deferred mining
Disposals – at cost
Accumulated depreciation on disposals
Malu underground pre commissioning revenue adjustment
Increase in mine rehabilitation asset – Note 10
Depreciation expense
1,130.2
(740.6)
389.6
440.5
17.5
(9.8)
9.8
–
–
(68.4)
389.6
$m
1,539.1
(764.6)
774.5
685.8
335.8
–
–
(54.3)
10.7
(203.5)
774.5
$m
21.2
–
21.2
22.2
8.4
(9.4)
–
21.2
$m
22.2
–
22.2
(103.7)
7.9
–
–
–
–
2,969.3
(1,978.7)
990.6
1,261.8
99.7
(9.4)
(361.5)
990.6
Total
$m
2,879.0
(1,617.2)
1,261.8
250.8
(9.8)
9.8
(46.4)
10.7
(285.1)
118.0
1,331.8
187.3
(120.5)
66.8
75.5
(0.2)
–
(8.5)
66.8
187.5
(112.0)
75.5
87.5
1.2
–
–
–
–
(13.2)
75.5
Plant and
Mine property
Freehold land
Capital work
equipment
and
and buildings
in progress
$m
development
$m
Closing carrying amount
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Recognition and measurement of property, plant and equipment
22.2
1,261.8
Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items and costs incurred in bringing assets into use.
Mine property and development assets include costs transferred from exploration and evaluation assets once technical feasibility and commercial viability of
an area of interest are demonstrable. After transfer, all subsequent expenditures to develop the mine to the production phase which are considered to benefit
mining operations in future periods are capitalised.
grouped at the lowest levels for which there are separately identifiable cash inflows. An impairment loss is recognised for the amount by which the asset or
CGU carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to dispose and value in use.
Assets that have been impaired are reviewed for possible reversal of impairment at each reporting date.
Value in use is the net amount expected to be recovered through cash flows arising from continued use and subsequent disposal of an asset (or group of
assets). In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and risks specific to the asset.
The asset’s fair value less costs to dispose is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between
knowledgeable, willing parties, less the estimated costs of disposal.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
Recoverability of assets
The Consolidated Entity undertook a review of the carrying value of the Prominent Hill CGU and determined that no adjustment to the carrying value was
necessary. The recoverable amount was estimated on the basis of Fair Value Less Cost to Dispose and based upon an internal discounted cash flow for
presently approved mine plans and an estimate of the value of resources known to exist but not yet included in mine plans. The latter was estimated from
independent publically available information for recent transactions involving comparable resources. No value was ascribed to exploration potential associated
with the CGU despite the prospectivity of the region.
Significant estimates and judgements are made in estimating the recoverable amount including future cash flows, commodity prices, foreign exchange rates,
costs and mine plans. Key areas of judgement and assumptions include the following:
• Future cash flows are based on latest internal budgets and forecasts which reflect expectations of the volume and grade of ore to be mined and
processed, mine plans, sales, short and long term commodity prices and exchange rates, operating and capital costs and operational assumptions. These
estimates are based on past experience, current market conditions and expectation of future changes to the market in which the CGU operates.
Commodity price and exchange rate assumptions were based on consensus of independent industry analysts and commentators.
• Mineral resources not modelled in Board approved budgets are included in the assessment of fair value less cost to dispose based on the application of an
appropriate resource valuation multiple to the contained copper equivalent within these resources.
• Discount rate applied to the cash flows which would be applied by a market participant in considering the value of the CGU and is reflective of current
market conditions. A real post-tax discount rate of 9.5 per cent (2015: 9.5 per cent) was used in 2016.
The valuation is sensitive to such assumptions which are subject to change as a result of changing economic and operational conditions. As a result, changes
in key assumptions will alter the estimate of recoverable amount and consequently it could in the absence of other factors require a change to the carrying
value of assets associated with the Prominent Hill CGU in the future.
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
The proceeds from sale of any concentrate produced from ore extracted and processed as part of development of the asset prior to being deemed ready for
The depreciation methods adopted by the Consolidated Entity are provided in the table below:
use, less any further processing and selling costs incurred, is deducted from the cost of the asset.
The present value of the expected cost of decommissioning an asset after its use is included in the cost of the respective asset if the recognition criteria for a
provision are met.
64
Category
Freehold land
Depreciation method
Not depreciated
Property Plant and Equipment is tested for impairment when there is an indication of impairment. For the purposes of assessing impairment, assets are
Buildings and other infrastructure
Straight line over life of mine
Short term plant and equipment
Straight line over life of asset
Processing plant
Units of ore milled over mining inventory
Mine property and development
Units of ore extracted over mining inventory applicable to the development
Depreciation of assets commences when the assets are ready for their intended use. The depreciation of mine property and development commences when
the mine is commissioned or deemed ready for use.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each reporting period and adjusted
prospectively, if appropriate. Where depreciation rates are changed, the net written down value of the asset is depreciated from the date of the change in
accordance with the new depreciation rate, with the change accounted for as a change in accounting estimate.
During 2016, the useful life of mine property and development and processing plant assets were reassessed and are now based on mining inventory, which
includes both resources and reserves. This more closely aligns benefits received by the assets from their use.
Ore reserves and resources estimates
The estimated quantities of economically recoverable reserves and resources are based upon interpretations of geological and geophysical models and require
assumptions to be made regarding exchange rates, commodity prices, future capital requirements and future operating performance.
Changes in reported reserves and resources estimates can impact the carrying value of property, plant and equipment including deferred mining expenditure,
intangible assets, capitalised exploration, provisions for mine rehabilitation, restoration and dismantling obligations, recognition of deferred tax assets, as well
as the amount of depreciation charged to the Income Statement.
Changes in the carrying value of the assets may arise principally through changes in the income that can be economically generated from each project.
Changes in depreciation expense may arise through a change in the useful life over which property, plant and equipment is depreciated.
65
66
143
Annual and Sustainability Report 2016
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Directors’ Report
Directors’ Report
exchange rates;
How the matter was addressed in our audit
How the matter was addressed in our audit
We involved KPMG valuation specialists and our procedures included:
• We tested the controls for management’s valuation of the Prominent Hill PP&E
How the matter was addressed in our audit
We involved KPMG valuation specialists and our procedures included:
• We tested the controls for management’s valuation of the Prominent Hill PP&E
We involved KPMG valuation specialists and our procedures included:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Carrying value of Prominent Hill PPE (contained within total PP&E $990.6 million)
Carrying value of Prominent Hill PPE (contained within total PP&E $990.6 million)
Refer to Note 7 to the Financial Report
Operational and Financial Review
Carrying value of Prominent Hill PPE (contained within total PP&E $990.6 million)
The key audit matter
Refer to Note 7 to the Financial Report
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
The key audit matter
Significant judgment is required by management in the
Refer to Note 7 to the Financial Report
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
determination of the carrying value of Prominent Hill PP&E
positioned for growth.
The key audit matter
Significant judgment is required by management in the
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
which is highly sensitive to changes in inputs. Assessment of the
including board authorisation of key inputs to the assessment such as commodity
determination of the carrying value of Prominent Hill PP&E
value of Prominent Hill PP&E is a key audit matter given
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
Significant judgment is required by management in the
prices and exchange rates, and operational assumptions.
which is highly sensitive to changes in inputs. Assessment of the
impairment was recorded in 2013 for these assets, and the
Open pit stripping (waste removal) costs – Deferred Mining
Open pit stripping (waste removal) costs – Deferred Mining
including board authorisation of key inputs to the assessment such as commodity
copper deposits at Carrapateena.
determination of the carrying value of Prominent Hill PP&E
value of Prominent Hill PP&E is a key audit matter given
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• We tested the controls for management’s valuation of the Prominent Hill PP&E
• We compared the valuation methodology to industry standards and criteria in the
significant judgment required by us in evaluating management’s
prices and exchange rates, and operational assumptions.
which is highly sensitive to changes in inputs. Assessment of the
impairment was recorded in 2013 for these assets, and the
including board authorisation of key inputs to the assessment such as commodity
relevant accounting standards. This included consideration of assumptions about
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
assessment of the value, which is principally based on a Net
Stripping (waste removal) activity is removal of waste material to access ore in an open-pit mine. Stripping costs incurred in the development phase (those to
Stripping (waste removal) activity is removal of waste material to access ore in an open-pit mine. Stripping costs incurred in the development phase (those to
value of Prominent Hill PP&E is a key audit matter given
• We compared the valuation methodology to industry standards and criteria in the
significant judgment required by us in evaluating management’s
prices and exchange rates, and operational assumptions.
the price that may be received if selling the Prominent Hill PP&E in an orderly
Present Value (NPV) model for the Prominent Hill mine. We
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
impairment was recorded in 2013 for these assets, and the
initially access the ore body) are capitalised as part of the cost of constructing the mine and depreciated as outlined above. Stripping costs incurred during the
initially access the ore body) are capitalised as part of the cost of constructing the mine and depreciated as outlined above. Stripping costs incurred during the
relevant accounting standards. This included consideration of assumptions about
assessment of the value, which is principally based on a Net
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
transaction between market participants at the measurement date.
particularly focus on those judgements listed below which
• We compared the valuation methodology to industry standards and criteria in the
commitment to operating discipline. Highlights for Prominent Hill were:
significant judgment required by us in evaluating management’s
the price that may be received if selling the Prominent Hill PP&E in an orderly
Present Value (NPV) model for the Prominent Hill mine. We
production phase (production stripping costs) generate two benefits:
production phase (production stripping costs) generate two benefits:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
impact estimated future cash flows:
relevant accounting standards. This included consideration of assumptions about
• We assessed the discount rate applied against comparable market rates and
assessment of the value, which is principally based on a Net
transaction between market participants at the measurement date.
particularly focus on those judgements listed below which
• Production of inventory (‘ore’) - accounted for as a part of producing those ore inventories; or
• Production of inventory (‘ore’) - accounted for as a part of producing those ore inventories; or
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
the price that may be received if selling the Prominent Hill PP&E in an orderly
industry trends.
Present Value (NPV) model for the Prominent Hill mine. We
• Assumptions about future commodity prices and foreign
impact estimated future cash flows:
• We assessed the discount rate applied against comparable market rates and
transaction between market participants at the measurement date.
• Improved access to a component of the ore body to be mined in future – recognised as ‘deferred mining asset’ and classified as part of Mine Property and
• Improved access to a component of the ore body to be mined in future – recognised as ‘deferred mining asset’ and classified as part of Mine Property and
particularly focus on those judgements listed below which
• We critically evaluated the Consolidated Entity’s key cash flow assumptions by:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
industry trends.
• Assumptions about future commodity prices and foreign
impact estimated future cash flows:
• We assessed the discount rate applied against comparable market rates and
Development, if the following criteria are met:
Development, if the following criteria are met:
• Prominent Hill operational assumptions, such as:
exchange rates;
comparing forecast commodity prices and foreign exchange rates applied
o
• We critically evaluated the Consolidated Entity’s key cash flow assumptions by:
industry trends.
• Assumptions about future commodity prices and foreign
• Future economic benefits are probable;
• Future economic benefits are probable;
by management to published analyst and broker data about future
Future metal production levels which are dependent
o
• Prominent Hill operational assumptions, such as:
exchange rates;
comparing forecast commodity prices and foreign exchange rates applied
o
• We critically evaluated the Consolidated Entity’s key cash flow assumptions by:
commodity prices and foreign exchange rates;
on extraction of ore from the mine, estimated grades
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• The component of the ore body for which access will be improved can be accurately identified; and
• The component of the ore body for which access will be improved can be accurately identified; and
by management to published analyst and broker data about future
Future metal production levels which are dependent
o
• Prominent Hill operational assumptions, such as:
of metal in the ore body, and ability to recover metal
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
using our knowledge of previous production levels and the current business
comparing forecast commodity prices and foreign exchange rates applied
o
o
commodity prices and foreign exchange rates;
on extraction of ore from the mine, estimated grades
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
contained in the ore extracted.
• The costs associated with improved access can be reliably measured.
• The costs associated with improved access can be reliably measured.
model to assess the Consolidated Entity’s capacity to achieve future
by management to published analyst and broker data about future
Future metal production levels which are dependent
o
of the project is currently underway with a number of milestones achieved in 2016:
of metal in the ore body, and ability to recover metal
using our knowledge of previous production levels and the current business
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
o
production levels;
commodity prices and foreign exchange rates;
Future capital expenditure and operating costs.
on extraction of ore from the mine, estimated grades
o
contained in the ore extracted.
model to assess the Consolidated Entity’s capacity to achieve future
A component is a specific part of the ore body that is made more accessible as a result of the stripping activity and is determined based on mine plans. Any
A component is a specific part of the ore body that is made more accessible as a result of the stripping activity and is determined based on mine plans. Any
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
of metal in the ore body, and ability to recover metal
using our knowledge of previous production levels and the current business
using our knowledge of historical capital and operating costs and future
The discount rate applied to forecast cash flows.
o
o
o
production levels;
Future capital expenditure and operating costs.
o
changes are applied prospectively.
changes are applied prospectively.
contained in the ore extracted.
plans to assess the Consolidated Entity’s assumptions in these areas;
model to assess the Consolidated Entity’s capacity to achieve future
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
To assess the significant judgements of this key audit matter, we
using our knowledge of historical capital and operating costs and future
The discount rate applied to forecast cash flows.
o
o
production levels;
Future capital expenditure and operating costs.
o
Production stripping costs are allocated between ore produced and the deferred mining asset on the basis of the relative volume of waste mined in a period
Production stripping costs are allocated between ore produced and the deferred mining asset on the basis of the relative volume of waste mined in a period
comparing ore to be mined and processed in the NPV model to the Mineral
o
involved senior audit team members, including valuation
plans to assess the Consolidated Entity’s assumptions in these areas;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
To assess the significant judgements of this key audit matter, we
using our knowledge of historical capital and operating costs and future
Resources and Ore Reserves Statements prepared by the Consolidated
which exceeds the remaining waste-to-ore stripping ratio at the beginning of the period applicable to the component. Deferred mining costs are subsequently
which exceeds the remaining waste-to-ore stripping ratio at the beginning of the period applicable to the component. Deferred mining costs are subsequently
o
specialists, with experience in the industry and the valuation
o
comparing ore to be mined and processed in the NPV model to the Mineral
o
involved senior audit team members, including valuation
plans to assess the Consolidated Entity’s assumptions in these areas;
Entity in accordance with Joint Ore Reserves Committee (JORC)
methodology.
depreciated using the units of production method over the life of the identified component of the ore body that became more accessible as a result of the
depreciated using the units of production method over the life of the identified component of the ore body that became more accessible as a result of the
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
To assess the significant judgements of this key audit matter, we
Resources and Ore Reserves Statements prepared by the Consolidated
specialists, with experience in the industry and the valuation
requirements. These requirements govern evaluation and reporting of the
stripping activity. Deferred mining costs are carried at cost less depreciation and any impairment losses.
stripping activity. Deferred mining costs are carried at cost less depreciation and any impairment losses.
comparing ore to be mined and processed in the NPV model to the Mineral
o
involved senior audit team members, including valuation
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Entity in accordance with Joint Ore Reserves Committee (JORC)
methodology.
existence of minerals resources. We also compared ore to be mined and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Resources and Ore Reserves Statements prepared by the Consolidated
specialists, with experience in the industry and the valuation
requirements. These requirements govern evaluation and reporting of the
location of the facility.
processed to historical estimates;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Entity in accordance with Joint Ore Reserves Committee (JORC)
methodology.
existence of minerals resources. We also compared ore to be mined and
reading and considering findings from independent external specialists
requirements. These requirements govern evaluation and reporting of the
o
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
Stripping (waste removal) costs – Deferred Mining
Stripping (waste removal) costs – Deferred Mining
processed to historical estimates;
engaged by the Consolidated Entity to assess the accuracy of JORC
existence of minerals resources. We also compared ore to be mined and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
reading and considering findings from independent external specialists
o
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Resource and Reserve estimates for information which may indicate that
processed to historical estimates;
companies which provides exploration expertise in specific geologies and locations.
Judgement is required in determining the estimated future ore and waste to be mined from a component of the open pit. The estimate of ore and waste
Judgement is required in determining the estimated future ore and waste to be mined from a component of the open pit. The estimate of ore and waste
engaged by the Consolidated Entity to assess the accuracy of JORC
estimates of ore to be mined and processed are not achievable.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
reading and considering findings from independent external specialists
o
Resource and Reserve estimates for information which may indicate that
remaining to be mined influences the amount of mining costs which are capitalised as mine property and development or included in the cost of inventory.
remaining to be mined influences the amount of mining costs which are capitalised as mine property and development or included in the cost of inventory.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
engaged by the Consolidated Entity to assess the accuracy of JORC
• We performed sensitivity analysis on key assumptions to assess how management
estimates of ore to be mined and processed are not achievable.
The estimates that determine the amounts capitalised or expensed are based on board approved mine plans. A change in ore or waste expected to be mined
The estimates that determine the amounts capitalised or expensed are based on board approved mine plans. A change in ore or waste expected to be mined
Resource and Reserve estimates for information which may indicate that
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
had addressed estimation uncertainty through alternative assumptions or
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• We performed sensitivity analysis on key assumptions to assess how management
will influence both the future rate at which mining costs may be capitalised as a deferred mining asset , as well as altering the useful life for depreciation
will influence both the future rate at which mining costs may be capitalised as a deferred mining asset , as well as altering the useful life for depreciation
estimates of ore to be mined and processed are not achievable.
outcomes which could indicate the potential for further write downs or reversal of
Australian and Northern Territory borders.
had addressed estimation uncertainty through alternative assumptions or
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
purposes of any existing deferred mining asset.
purposes of any existing deferred mining asset.
a previously recognised impairment.
• We performed sensitivity analysis on key assumptions to assess how management
outcomes which could indicate the potential for further write downs or reversal of
Australian and Northern Territory borders.
had addressed estimation uncertainty through alternative assumptions or
• We assessed the value ascribed to the ore bodies known to exist at Prominent Hill
a previously recognised impairment.
outcomes which could indicate the potential for further write downs or reversal of
but have not been included in the NPV model, by comparing it to market data for
• We assessed the value ascribed to the ore bodies known to exist at Prominent Hill
a previously recognised impairment.
comparable transactions.
but have not been included in the NPV model, by comparing it to market data for
• We assessed the value ascribed to the ore bodies known to exist at Prominent Hill
• We assessed the appropriateness of the Consolidated Entity’s method used to
comparable transactions.
but have not been included in the NPV model, by comparing it to market data for
determine the recoverable amount against the relevant Australian Accounting
2015
2015
• We assessed the appropriateness of the Consolidated Entity’s method used to
comparable transactions.
Standards.
$m
$m
determine the recoverable amount against the relevant Australian Accounting
• We assessed the appropriateness of the Consolidated Entity’s method used to
• We assessed the Consolidated Entity’s disclosures in respect of asset values and
Standards.
34.8
34.8
determine the recoverable amount against the relevant Australian Accounting
impairment testing against the requirements of Australian Accounting Standards.
• We assessed the Consolidated Entity’s disclosures in respect of asset values and
Standards.
impairment testing against the requirements of Australian Accounting Standards.
• We assessed the Consolidated Entity’s disclosures in respect of asset values and
impairment testing against the requirements of Australian Accounting Standards.
Leases which transfer substantially all the risk and rewards of ownership of an asset are classified as finance leases. Where a finance lease is provided, the
Leases which transfer substantially all the risk and rewards of ownership of an asset are classified as finance leases. Where a finance lease is provided, the
item of equipment is derecognised and the present value of the minimum lease payments receivable are recognised as a lease receivable. Contingent rents are
item of equipment is derecognised and the present value of the minimum lease payments receivable are recognised as a lease receivable. Contingent rents are
recognised as revenue in the period in which they are earned.
recognised as revenue in the period in which they are earned.
Recognition and measurement of finance lease receivable
Recognition and measurement of finance lease receivable
8 Lease receivable
8 Lease receivable
The discount rate applied to forecast cash flows.
2016
2016
$m
$m
27.5
27.5
Finance lease receivable
Finance lease receivable
The finance lease receivable represents the consideration paid by OZ Minerals to acquire mining equipment which was leased back to Thiess on an interest
The finance lease receivable represents the consideration paid by OZ Minerals to acquire mining equipment which was leased back to Thiess on an interest
free basis. OZ Minerals benefits progressively over the mining services contract from reduced mining services charges by Thiess. Upon termination of the
free basis. OZ Minerals benefits progressively over the mining services contract from reduced mining services charges by Thiess. Upon termination of the
mining services contract, any carrying value of lease receivable will be recovered by OZ Minerals from resale of the equipment to Thiess.
mining services contract, any carrying value of lease receivable will be recovered by OZ Minerals from resale of the equipment to Thiess.
92
The finance lease receivable of $27.5 million as at 31 December 2016 comprises $34.8 million from the comparative year, less $7.3 million (2015: $7.4
The finance lease receivable of $27.5 million as at 31 December 2016 comprises $34.8 million from the comparative year, less $7.3 million (2015: $7.4
million) amortisation of the finance lease receivable during the year.
million) amortisation of the finance lease receivable during the year.
92
92
12
12
67
67
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
9 Exploration assets - Carrapateena
9 Exploration assets - Carrapateena
Carrying value of capitalised exploration expenditure
Carrying value of capitalised exploration expenditure
The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either
The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either
future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is possible an impairment
In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is possible an impairment
test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure.
test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure.
The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or
The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or
sale of the respective areas of interest.
sale of the respective areas of interest.
2016
2016
$m
$m
252.2
252.2
32.7
32.7
284.9
284.9
2015
2015
$m
$m
252.2
252.2
–
–
252.2
252.2
Exploration assets - intangible
Exploration assets - intangible
Exploration assets - tangible
Exploration assets - tangible
Exploration assets - Carrapateena
Exploration assets - Carrapateena
Intangible exploration assets represent acquisition costs of the Carrapateena copper-gold project in South Australia. The terms of this asset acquisition provide
Intangible exploration assets represent acquisition costs of the Carrapateena copper-gold project in South Australia. The terms of this asset acquisition provide
for two further payments by OZ Minerals to vendors upon commercial production being reached:
for two further payments by OZ Minerals to vendors upon commercial production being reached:
• US$50.0 million is payable on first commercial production of copper, uranium, gold or silver.
• US$50.0 million is payable on first commercial production of copper, uranium, gold or silver.
• US$25.0 million is payable on first commercial production of rare earths, iron or any other commodity.
• US$25.0 million is payable on first commercial production of rare earths, iron or any other commodity.
The further payments amounting to US$75.0 million do not constitute a liability in accordance with accounting standards as OZ Minerals can control whether
The further payments amounting to US$75.0 million do not constitute a liability in accordance with accounting standards as OZ Minerals can control whether
the amounts will ever be paid and therefore no liability is recognised for the year ended 31 December 2016.
the amounts will ever be paid and therefore no liability is recognised for the year ended 31 December 2016.
Tangible exploration assets represent the capitalised carrying value of exploration expenditure incurred since 1 July 2016. Following the PFS results, OZ
Tangible exploration assets represent the capitalised carrying value of exploration expenditure incurred since 1 July 2016. Following the PFS results, OZ
Minerals has made the determination to capitalise expenditure related to exploration and evaluation activities in relation to Carrapateena, in accordance with
Minerals has made the determination to capitalise expenditure related to exploration and evaluation activities in relation to Carrapateena, in accordance with
the policy described below.
the policy described below.
Recognition and measurement of exploration expenditure
Recognition and measurement of exploration expenditure
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless the expenditure is expected to be recouped through
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless the expenditure is expected to be recouped through
successful development and exploitation of the area of interest, or alternatively by its sale, in which case it is recognised as an asset on an area of interest
successful development and exploitation of the area of interest, or alternatively by its sale, in which case it is recognised as an asset on an area of interest
basis.
basis.
Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. Exploration and evaluation assets are not
Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. Exploration and evaluation assets are not
depreciated and are assessed for impairment if:
depreciated and are assessed for impairment if:
• sufficient information exists to determine technical feasibility and commercial viability; or
• sufficient information exists to determine technical feasibility and commercial viability; or
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A
Cash Generating Unit (‘CGU’) is not larger than the area of interest.
Cash Generating Unit (‘CGU’) is not larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrable, exploration and evaluation
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrable, exploration and evaluation
assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant
assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to
mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Expenditure incurred under earn-in
mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Expenditure incurred under earn-in
arrangements is expensed as incurred. Under the agreements OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of
arrangements is expensed as incurred. Under the agreements OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of
and equipment.
and equipment.
the tenement may possess.
the tenement may possess.
68
68
Finance
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Open pit stripping (waste removal) costs – Deferred Mining
Stripping (waste removal) activity is removal of waste material to access ore in an open-pit mine. Stripping costs incurred in the development phase (those to
initially access the ore body) are capitalised as part of the cost of constructing the mine and depreciated as outlined above. Stripping costs incurred during the
production phase (production stripping costs) generate two benefits:
• Production of inventory (‘ore’) - accounted for as a part of producing those ore inventories; or
• Improved access to a component of the ore body to be mined in future – recognised as ‘deferred mining asset’ and classified as part of Mine Property and
Development, if the following criteria are met:
• Future economic benefits are probable;
• The component of the ore body for which access will be improved can be accurately identified; and
• The costs associated with improved access can be reliably measured.
A component is a specific part of the ore body that is made more accessible as a result of the stripping activity and is determined based on mine plans. Any
changes are applied prospectively.
Production stripping costs are allocated between ore produced and the deferred mining asset on the basis of the relative volume of waste mined in a period
which exceeds the remaining waste-to-ore stripping ratio at the beginning of the period applicable to the component. Deferred mining costs are subsequently
depreciated using the units of production method over the life of the identified component of the ore body that became more accessible as a result of the
stripping activity. Deferred mining costs are carried at cost less depreciation and any impairment losses.
Stripping (waste removal) costs – Deferred Mining
Judgement is required in determining the estimated future ore and waste to be mined from a component of the open pit. The estimate of ore and waste
remaining to be mined influences the amount of mining costs which are capitalised as mine property and development or included in the cost of inventory.
The estimates that determine the amounts capitalised or expensed are based on board approved mine plans. A change in ore or waste expected to be mined
will influence both the future rate at which mining costs may be capitalised as a deferred mining asset , as well as altering the useful life for depreciation
purposes of any existing deferred mining asset.
8 Lease receivable
Finance lease receivable
2016
$m
27.5
2015
$m
34.8
Recognition and measurement of finance lease receivable
Leases which transfer substantially all the risk and rewards of ownership of an asset are classified as finance leases. Where a finance lease is provided, the
item of equipment is derecognised and the present value of the minimum lease payments receivable are recognised as a lease receivable. Contingent rents are
recognised as revenue in the period in which they are earned.
The finance lease receivable represents the consideration paid by OZ Minerals to acquire mining equipment which was leased back to Thiess on an interest
free basis. OZ Minerals benefits progressively over the mining services contract from reduced mining services charges by Thiess. Upon termination of the
mining services contract, any carrying value of lease receivable will be recovered by OZ Minerals from resale of the equipment to Thiess.
The finance lease receivable of $27.5 million as at 31 December 2016 comprises $34.8 million from the comparative year, less $7.3 million (2015: $7.4
million) amortisation of the finance lease receivable during the year.
67
2016
2016
2016
2016
$m
$m
$m
$m
252.2
252.2
252.2
252.2
32.7
32.7
32.7
32.7
284.9
284.9
284.9
284.9
Directors’ Report
9 Exploration assets - Carrapateena
9 Exploration assets - Carrapateena
9 Exploration assets - Carrapateena
9 Exploration assets - Carrapateena
Directors’ Report
Carrying value of capitalised exploration expenditure
Carrying value of capitalised exploration expenditure
Carrying value of capitalised exploration expenditure
Carrying value of capitalised exploration expenditure
The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either
The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either
The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either
The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either
future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.
In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is possible an impairment
In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is possible an impairment
In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is possible an impairment
In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is possible an impairment
test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure.
test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure.
test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure.
test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure.
The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or
The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or
The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or
The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or
sale of the respective areas of interest.
sale of the respective areas of interest.
Operational and Financial Review
sale of the respective areas of interest.
sale of the respective areas of interest.
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
2015
2015
2015
2015
$m
$m
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
$m
$m
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
252.2
Exploration assets - intangible
Exploration assets - intangible
252.2
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
252.2
Exploration assets - intangible
252.2
Exploration assets - intangible
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Directors’ Report
–
Exploration assets - tangible
–
Exploration assets - tangible
–
Exploration assets - tangible
–
Exploration assets - tangible
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Directors’ Report
252.2
Exploration assets - Carrapateena
252.2
Exploration assets - Carrapateena
Exploration assets - Carrapateena
252.2
Exploration assets - Carrapateena
252.2
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Intangible exploration assets represent acquisition costs of the Carrapateena copper-gold project in South Australia. The terms of this asset acquisition provide
Intangible exploration assets represent acquisition costs of the Carrapateena copper-gold project in South Australia. The terms of this asset acquisition provide
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Intangible exploration assets represent acquisition costs of the Carrapateena copper-gold project in South Australia. The terms of this asset acquisition provide
Intangible exploration assets represent acquisition costs of the Carrapateena copper-gold project in South Australia. The terms of this asset acquisition provide
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
for two further payments by OZ Minerals to vendors upon commercial production being reached:
for two further payments by OZ Minerals to vendors upon commercial production being reached:
commitment to operating discipline. Highlights for Prominent Hill were:
for two further payments by OZ Minerals to vendors upon commercial production being reached:
for two further payments by OZ Minerals to vendors upon commercial production being reached:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• US$50.0 million is payable on first commercial production of copper, uranium, gold or silver.
• US$50.0 million is payable on first commercial production of copper, uranium, gold or silver.
• US$50.0 million is payable on first commercial production of copper, uranium, gold or silver.
• US$50.0 million is payable on first commercial production of copper, uranium, gold or silver.
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• US$25.0 million is payable on first commercial production of rare earths, iron or any other commodity.
• US$25.0 million is payable on first commercial production of rare earths, iron or any other commodity.
• US$25.0 million is payable on first commercial production of rare earths, iron or any other commodity.
• US$25.0 million is payable on first commercial production of rare earths, iron or any other commodity.
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
The further payments amounting to US$75.0 million do not constitute a liability in accordance with accounting standards as OZ Minerals can control whether
The further payments amounting to US$75.0 million do not constitute a liability in accordance with accounting standards as OZ Minerals can control whether
The further payments amounting to US$75.0 million do not constitute a liability in accordance with accounting standards as OZ Minerals can control whether
The further payments amounting to US$75.0 million do not constitute a liability in accordance with accounting standards as OZ Minerals can control whether
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
the amounts will ever be paid and therefore no liability is recognised for the year ended 31 December 2016.
the amounts will ever be paid and therefore no liability is recognised for the year ended 31 December 2016.
the amounts will ever be paid and therefore no liability is recognised for the year ended 31 December 2016.
the amounts will ever be paid and therefore no liability is recognised for the year ended 31 December 2016.
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Tangible exploration assets represent the capitalised carrying value of exploration expenditure incurred since 1 July 2016. Following the PFS results, OZ
Tangible exploration assets represent the capitalised carrying value of exploration expenditure incurred since 1 July 2016. Following the PFS results, OZ
Operational and Financial Review
Tangible exploration assets represent the capitalised carrying value of exploration expenditure incurred since 1 July 2016. Following the PFS results, OZ
Tangible exploration assets represent the capitalised carrying value of exploration expenditure incurred since 1 July 2016. Following the PFS results, OZ
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Minerals has made the determination to capitalise expenditure related to exploration and evaluation activities in relation to Carrapateena, in accordance with
Minerals has made the determination to capitalise expenditure related to exploration and evaluation activities in relation to Carrapateena, in accordance with
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Minerals has made the determination to capitalise expenditure related to exploration and evaluation activities in relation to Carrapateena, in accordance with
Minerals has made the determination to capitalise expenditure related to exploration and evaluation activities in relation to Carrapateena, in accordance with
Operational and Financial Review
of the project is currently underway with a number of milestones achieved in 2016:
the policy described below.
the policy described below.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
the policy described below.
the policy described below.
of the project is currently underway with a number of milestones achieved in 2016:
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Recognition and measurement of exploration expenditure
Recognition and measurement of exploration expenditure
positioned for growth.
Recognition and measurement of exploration expenditure
Recognition and measurement of exploration expenditure
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless the expenditure is expected to be recouped through
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless the expenditure is expected to be recouped through
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless the expenditure is expected to be recouped through
Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless the expenditure is expected to be recouped through
copper deposits at Carrapateena.
successful development and exploitation of the area of interest, or alternatively by its sale, in which case it is recognised as an asset on an area of interest
successful development and exploitation of the area of interest, or alternatively by its sale, in which case it is recognised as an asset on an area of interest
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
successful development and exploitation of the area of interest, or alternatively by its sale, in which case it is recognised as an asset on an area of interest
successful development and exploitation of the area of interest, or alternatively by its sale, in which case it is recognised as an asset on an area of interest
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
basis.
basis.
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
basis.
basis.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. Exploration and evaluation assets are not
Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. Exploration and evaluation assets are not
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
location of the facility.
Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. Exploration and evaluation assets are not
Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. Exploration and evaluation assets are not
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
commitment to operating discipline. Highlights for Prominent Hill were:
depreciated and are assessed for impairment if:
depreciated and are assessed for impairment if:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
depreciated and are assessed for impairment if:
depreciated and are assessed for impairment if:
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• sufficient information exists to determine technical feasibility and commercial viability; or
• sufficient information exists to determine technical feasibility and commercial viability; or
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• sufficient information exists to determine technical feasibility and commercial viability; or
• sufficient information exists to determine technical feasibility and commercial viability; or
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A
Cash Generating Unit (‘CGU’) is not larger than the area of interest.
Cash Generating Unit (‘CGU’) is not larger than the area of interest.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Cash Generating Unit (‘CGU’) is not larger than the area of interest.
Cash Generating Unit (‘CGU’) is not larger than the area of interest.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Australian and Northern Territory borders.
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrable, exploration and evaluation
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrable, exploration and evaluation
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrable, exploration and evaluation
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrable, exploration and evaluation
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant
assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant
Australian and Northern Territory borders.
of the project is currently underway with a number of milestones achieved in 2016:
assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant
assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
and equipment.
and equipment.
and equipment.
and equipment.
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to
From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Expenditure incurred under earn-in
mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Expenditure incurred under earn-in
mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Expenditure incurred under earn-in
mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Expenditure incurred under earn-in
arrangements is expensed as incurred. Under the agreements OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of
arrangements is expensed as incurred. Under the agreements OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
arrangements is expensed as incurred. Under the agreements OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of
arrangements is expensed as incurred. Under the agreements OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of
the tenement may possess.
the tenement may possess.
the tenement may possess.
the tenement may possess.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
68
68
location of the facility.
68
68
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
145
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
Australian and Northern Territory borders.
12
12
12
12
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Assets held for sale
Assets held for sale
Assets held for sale
Assets held for sale
Property, plant and equipment held for sale
Property, plant and equipment held for sale
Property, plant and equipment held for sale
Property, plant and equipment held for sale
2016
2016
2016
2016
$m
$m
$m
$m
9.4
9.4
9.4
9.4
2015
2015
2015
2015
$m
$m
$m
$m
–
–
–
–
Following a decision to dispose of the Tunnel Boring Machine the carrying value was reclassified in accordance with AASB 5 Non-current Assets Held for Sale
Following a decision to dispose of the Tunnel Boring Machine the carrying value was reclassified in accordance with AASB 5 Non-current Assets Held for Sale
Following a decision to dispose of the Tunnel Boring Machine the carrying value was reclassified in accordance with AASB 5 Non-current Assets Held for Sale
and Discontinued Operations from Capital Work in Progress to Assets held for sale.
and Discontinued Operations from Capital Work in Progress to Assets held for sale.
and Discontinued Operations from Capital Work in Progress to Assets held for sale.
Following a decision to dispose of the Tunnel Boring Machine the carrying value was reclassified in accordance with AASB 5 Non-current Assets Held for Sale
and Discontinued Operations from Capital Work in Progress to Assets held for sale.
10 Provisions
10 Provisions
10 Provisions
10 Provisions
Mine rehabilitation, restoration and dismantling obligations
Mine rehabilitation, restoration and dismantling obligations
Mine rehabilitation, restoration and dismantling obligations
Mine rehabilitation, restoration and dismantling obligations
The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation
The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation
The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation
of equipment, decontamination, water purification and permanent storage of historical residues.
of equipment, decontamination, water purification and permanent storage of historical residues.
of equipment, decontamination, water purification and permanent storage of historical residues.
The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation
of equipment, decontamination, water purification and permanent storage of historical residues.
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation, and many
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation, and many
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation, and many
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation, and many
other factors, including future changes in technology, price increases and changes in interest rates. The calculation of these provision estimates requires
other factors, including future changes in technology, price increases and changes in interest rates. The calculation of these provision estimates requires
other factors, including future changes in technology, price increases and changes in interest rates. The calculation of these provision estimates requires
other factors, including future changes in technology, price increases and changes in interest rates. The calculation of these provision estimates requires
assumptions such as application of environmental legislation, plant closure dates, available technologies, engineering cost estimates and discount rates. A
assumptions such as application of environmental legislation, plant closure dates, available technologies, engineering cost estimates and discount rates. A
assumptions such as application of environmental legislation, plant closure dates, available technologies, engineering cost estimates and discount rates. A
assumptions such as application of environmental legislation, plant closure dates, available technologies, engineering cost estimates and discount rates. A
change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions.
change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions.
change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions.
change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions.
Recognition and measurement of provisions
Recognition and measurement of provisions
Recognition and measurement of provisions
Recognition and measurement of provisions
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The
discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The
discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The
discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The
discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The
increase in provisions due to the passage of time is recognised in the Income Statement as financing expenses.
increase in provisions due to the passage of time is recognised in the Income Statement as financing expenses.
increase in provisions due to the passage of time is recognised in the Income Statement as financing expenses.
increase in provisions due to the passage of time is recognised in the Income Statement as financing expenses.
Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration relating to areas disturbed during mining and exploration
Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration relating to areas disturbed during mining and exploration
Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration relating to areas disturbed during mining and exploration
Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration relating to areas disturbed during mining and exploration
operations up to the reporting date but not yet rehabilitated. Provisions for mine rehabilitation are based on current estimates of costs to rehabilitate such
operations up to the reporting date but not yet rehabilitated. Provisions for mine rehabilitation are based on current estimates of costs to rehabilitate such
operations up to the reporting date but not yet rehabilitated. Provisions for mine rehabilitation are based on current estimates of costs to rehabilitate such
operations up to the reporting date but not yet rehabilitated. Provisions for mine rehabilitation are based on current estimates of costs to rehabilitate such
areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet
areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet
areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet
areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet
legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into
legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into
legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into
legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into
current (estimated costs arising within twelve months) and non-current components based on the expected timing of these cash flows.
current (estimated costs arising within twelve months) and non-current components based on the expected timing of these cash flows.
current (estimated costs arising within twelve months) and non-current components based on the expected timing of these cash flows.
current (estimated costs arising within twelve months) and non-current components based on the expected timing of these cash flows.
Provision for demobilisation relates to the Consolidated Entity’s obligation to reimburse contractors for the cost of removing equipment from the mine site.
Provision for demobilisation relates to the Consolidated Entity’s obligation to reimburse contractors for the cost of removing equipment from the mine site.
Provision for demobilisation relates to the Consolidated Entity’s obligation to reimburse contractors for the cost of removing equipment from the mine site.
Additions to the provision are made over the life of the equipment while in use at OZ Minerals to match the expected demobilisation costs with the related
Additions to the provision are made over the life of the equipment while in use at OZ Minerals to match the expected demobilisation costs with the related
Additions to the provision are made over the life of the equipment while in use at OZ Minerals to match the expected demobilisation costs with the related
benefit.
benefit.
benefit.
Provision for demobilisation relates to the Consolidated Entity’s obligation to reimburse contractors for the cost of removing equipment from the mine site.
Additions to the provision are made over the life of the equipment while in use at OZ Minerals to match the expected demobilisation costs with the related
benefit.
Current
Current
Current
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Other provisions
Other provisions
Other provisions
Total current provisions
Total current provisions
Total current provisions
Non–current
Non–current
Non–current
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Mine rehabilitation
Mine rehabilitation
Mine rehabilitation
Total non-current provisions
Total non-current provisions
Total non-current provisions
Aggregate
Aggregate
Aggregate
Other provisions
Other provisions
Other provisions
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Mine rehabilitation
Mine rehabilitation
Mine rehabilitation
Total provisions
Total provisions
Total provisions
Reconciliation of provisions
Reconciliation of provisions
Reconciliation of provisions
Opening carrying amount
Opening carrying amount
Opening carrying amount
Unwind of discount
Unwind of discount
Unwind of discount
Provisions released – Prominent Hill
Provisions released – Prominent Hill
Provisions released – Prominent Hill
Provisions recognised – Carrapteena
Provisions recognised – Carrapteena
Provisions recognised – Carrapteena
Closing carrying amount
Closing carrying amount
Closing carrying amount
2016
2016
2016
$m
$m
$m
2015
2015
2015
$m
$m
$m
6.3
6.3
6.3
2.0
2.0
2.0
8.3
8.3
8.3
2.3
2.3
2.3
33.7
33.7
33.7
36.0
36.0
36.0
2.0
2.0
2.0
8.6
8.6
8.6
33.7
33.7
33.7
44.3
44.3
44.3
30.9
30.9
30.9
2.8
2.8
2.8
(1.0)
(1.0)
(1.0)
1.0
1.0
1.0
33.7
33.7
33.7
6.8
6.8
6.8
1.8
1.8
1.8
8.6
8.6
8.6
2.5
2.5
2.5
30.9
30.9
30.9
33.4
33.4
33.4
1.8
1.8
1.8
9.3
9.3
9.3
30.9
30.9
30.9
42.0
42.0
42.0
9.3
9.3
9.3
–
–
–
(0.7)
(0.7)
(0.7)
–
–
–
8.6
8.6
8.6
Mine
Mine
Mine
rehabilitation
rehabilitation
rehabilitation
provision
provision
provision
Equipment
Equipment
Equipment
demobilisation
demobilisation
demobilisation
provision
provision
provision
11 Capital expenditure commitments
11 Capital expenditure commitments
11 Capital expenditure commitments
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
not cancellable. Otherwise the commitment represents the cancellation fee.
not cancellable. Otherwise the commitment represents the cancellation fee.
not cancellable. Otherwise the commitment represents the cancellation fee.
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
69
69
69
69
70
70
70
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Net Cash and Capital Employed
Following a decision to dispose of the Tunnel Boring Machine the carrying value was reclassified in accordance with AASB 5 Non-current Assets Held for Sale
Following a decision to dispose of the Tunnel Boring Machine the carrying value was reclassified in accordance with AASB 5 Non-current Assets Held for Sale
and Discontinued Operations from Capital Work in Progress to Assets held for sale.
and Discontinued Operations from Capital Work in Progress to Assets held for sale.
2016
2016
$m
$m
9.4
9.4
2015
2015
$m
$m
–
–
Assets held for sale
Assets held for sale
Property, plant and equipment held for sale
Property, plant and equipment held for sale
10 Provisions
10 Provisions
Mine rehabilitation, restoration and dismantling obligations
Mine rehabilitation, restoration and dismantling obligations
The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation
The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation
of equipment, decontamination, water purification and permanent storage of historical residues.
of equipment, decontamination, water purification and permanent storage of historical residues.
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation, and many
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in environmental legislation, and many
Current
Current
Current
Current
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Other provisions
Other provisions
Other provisions
Other provisions
Total current provisions
Total current provisions
Total current provisions
Total current provisions
Non–current
Non–current
Non–current
Non–current
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Mine rehabilitation
Mine rehabilitation
Mine rehabilitation
Mine rehabilitation
Total non-current provisions
Total non-current provisions
Total non-current provisions
Total non-current provisions
Aggregate
Aggregate
Aggregate
Aggregate
Other provisions
Other provisions
Other provisions
Other provisions
other factors, including future changes in technology, price increases and changes in interest rates. The calculation of these provision estimates requires
other factors, including future changes in technology, price increases and changes in interest rates. The calculation of these provision estimates requires
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
Equipment demobilisation
assumptions such as application of environmental legislation, plant closure dates, available technologies, engineering cost estimates and discount rates. A
assumptions such as application of environmental legislation, plant closure dates, available technologies, engineering cost estimates and discount rates. A
change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions.
change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions.
Mine rehabilitation
Mine rehabilitation
Mine rehabilitation
Mine rehabilitation
Total provisions
Total provisions
Total provisions
Total provisions
Recognition and measurement of provisions
Recognition and measurement of provisions
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The
Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The
Reconciliation of provisions
Reconciliation of provisions
Reconciliation of provisions
Reconciliation of provisions
Opening carrying amount
Opening carrying amount
Opening carrying amount
Opening carrying amount
Unwind of discount
Unwind of discount
Unwind of discount
Unwind of discount
Provisions released – Prominent Hill
Provisions released – Prominent Hill
Provisions released – Prominent Hill
Provisions released – Prominent Hill
Provisions recognised – Carrapteena
Provisions recognised – Carrapteena
Provisions recognised – Carrapteena
Provisions recognised – Carrapteena
Closing carrying amount
Closing carrying amount
Closing carrying amount
Closing carrying amount
2016
2016
2016
2016
$m
$m
$m
$m
2015
2015
2015
2015
$m
$m
$m
$m
6.3
6.3
6.3
6.3
2.0
2.0
2.0
2.0
8.3
8.3
8.3
8.3
2.3
2.3
2.3
2.3
33.7
33.7
33.7
33.7
36.0
36.0
36.0
36.0
2.0
2.0
2.0
2.0
8.6
8.6
8.6
8.6
33.7
33.7
33.7
33.7
44.3
44.3
44.3
44.3
6.8
6.8
6.8
6.8
1.8
1.8
1.8
1.8
8.6
8.6
8.6
8.6
2.5
2.5
2.5
2.5
30.9
30.9
30.9
30.9
33.4
33.4
33.4
33.4
1.8
1.8
1.8
1.8
9.3
9.3
9.3
9.3
30.9
30.9
30.9
30.9
42.0
42.0
42.0
42.0
Mine
Mine
Mine
Mine
rehabilitation
rehabilitation
rehabilitation
rehabilitation
provision
provision
provision
provision
Equipment
Equipment
Equipment
Equipment
demobilisation
demobilisation
demobilisation
demobilisation
provision
provision
provision
provision
30.9
30.9
30.9
30.9
2.8
2.8
2.8
2.8
(1.0)
(1.0)
(1.0)
(1.0)
1.0
1.0
1.0
1.0
33.7
33.7
33.7
33.7
9.3
9.3
9.3
9.3
–
–
–
–
(0.7)
(0.7)
(0.7)
(0.7)
–
–
–
–
8.6
8.6
8.6
8.6
11 Capital expenditure commitments
11 Capital expenditure commitments
11 Capital expenditure commitments
11 Capital expenditure commitments
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
In accordance with OZ Minerals’ accounting policy, commitments for capital expenditure represent the minimum expected payments where the contracts are
not cancellable. Otherwise the commitment represents the cancellation fee.
not cancellable. Otherwise the commitment represents the cancellation fee.
not cancellable. Otherwise the commitment represents the cancellation fee.
not cancellable. Otherwise the commitment represents the cancellation fee.
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
OZ Minerals has entered into contracts for ongoing capital projects. While these contracts are cancellable, termination payments are not reliably measurable
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
as they are dependent on various factors including application of termination clauses which can only be estimated in the event of termination.
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
The minimum unavoidable payments in relation to contracts for development of capital projects and equipment which can be reliably estimated, and which
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
were not required to be recognised as liabilities at 31 December 2016 amount to $5.0 million (2015: nil).
discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The
discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The
increase in provisions due to the passage of time is recognised in the Income Statement as financing expenses.
increase in provisions due to the passage of time is recognised in the Income Statement as financing expenses.
Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration relating to areas disturbed during mining and exploration
Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration relating to areas disturbed during mining and exploration
operations up to the reporting date but not yet rehabilitated. Provisions for mine rehabilitation are based on current estimates of costs to rehabilitate such
operations up to the reporting date but not yet rehabilitated. Provisions for mine rehabilitation are based on current estimates of costs to rehabilitate such
areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet
areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet
legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into
legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into
current (estimated costs arising within twelve months) and non-current components based on the expected timing of these cash flows.
current (estimated costs arising within twelve months) and non-current components based on the expected timing of these cash flows.
Provision for demobilisation relates to the Consolidated Entity’s obligation to reimburse contractors for the cost of removing equipment from the mine site.
Provision for demobilisation relates to the Consolidated Entity’s obligation to reimburse contractors for the cost of removing equipment from the mine site.
Additions to the provision are made over the life of the equipment while in use at OZ Minerals to match the expected demobilisation costs with the related
Additions to the provision are made over the life of the equipment while in use at OZ Minerals to match the expected demobilisation costs with the related
benefit.
benefit.
69
69
70
70
70
70
147
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Contributed Equity
Contributed Equity
Contributed Equity
Contributed Equity
Contributed Equity
Contributed Equity
12 Issued capital
12 Issued capital
12 Issued capital
12 Issued capital
298,664,750 shares (2015: 303,470,022 shares)
298,664,750 shares (2015: 303,470,022 shares)
298,664,750 shares (2015: 303,470,022 shares)
298,664,750 shares (2015: 303,470,022 shares)
13 Share-based payments
13 Share-based payments
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expenses was $6.9 million (2015: $4.4
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expenses was $6.9 million (2015: $4.4
million). A description of OZ Minerals’ significant Performance Rights Plans (‘PRP’) and Long Term Incentive Plans (‘LTIP’) are provided below:
million). A description of OZ Minerals’ significant Performance Rights Plans (‘PRP’) and Long Term Incentive Plans (‘LTIP’) are provided below:
Element
Element
Performance rights granted under PRP
Performance rights granted under PRP
Performance rights granted under LTIP
Performance rights granted under LTIP
Performance
Performance
2016: 1 July 2016 to 1 July 2017
2016: 1 July 2016 to 1 July 2017
2016: 1 January 2016 to 31 December 2018
2016: 1 January 2016 to 31 December 2018
2016
2016
2016
2016
$m
$m
$m
$m
2015
2015
2015
2015
$m
$m
$m
$m
2,029.0
2,029.0
2,029.0
2,029.0
2,058.9
2,058.9
2,058.9
2,058.9
period
period
2015: 22 July 2015 to 1 July 2016
2015: 22 July 2015 to 1 July 2016
2014: 2 May 2014 to 1 July 2015
2014: 2 May 2014 to 1 July 2015
The Company does not have authorised capital or par value in respect of its issued shares. Ordinary shares entitle the holder to participate in dividends and
The Company does not have authorised capital or par value in respect of its issued shares. Ordinary shares entitle the holder to participate in dividends and
The Company does not have authorised capital or par value in respect of its issued shares. Ordinary shares entitle the holder to participate in dividends and
The Company does not have authorised capital or par value in respect of its issued shares. Ordinary shares entitle the holder to participate in dividends and
the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a
the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a
the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a
the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a
meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share.
meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share.
meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share.
meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share.
In February 2016, OZ Minerals announced an on-market share buyback program of up to $60 million as part of an updated capital management framework.
In February 2016, OZ Minerals announced an on-market share buyback program of up to $60 million as part of an updated capital management framework.
In February 2016, OZ Minerals announced an on-market share buyback program of up to $60 million as part of an updated capital management framework.
This updated framework reinforces OZ Minerals' strategy of maximising shareholder returns by ensuring that capital is allocated efficiently.
This updated framework reinforces OZ Minerals' strategy of maximising shareholder returns by ensuring that capital is allocated efficiently.
This updated framework reinforces OZ Minerals' strategy of maximising shareholder returns by ensuring that capital is allocated efficiently.
In February 2016, OZ Minerals announced an on-market share buyback program of up to $60 million as part of an updated capital management framework.
This updated framework reinforces OZ Minerals' strategy of maximising shareholder returns by ensuring that capital is allocated efficiently.
During the year, 4,805,272 shares have been bought and cancelled at an average cost of $6.23 per share. The buyback period expires on 26 February 2017.
During the year, 4,805,272 shares have been bought and cancelled at an average cost of $6.23 per share. The buyback period expires on 26 February 2017.
During the year, 4,805,272 shares have been bought and cancelled at an average cost of $6.23 per share. The buyback period expires on 26 February 2017.
During the year, 4,805,272 shares have been bought and cancelled at an average cost of $6.23 per share. The buyback period expires on 26 February 2017.
Recognition and measurement of issued capital
Recognition and measurement of issued capital
Recognition and measurement of issued capital
Recognition and measurement of issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction.
Shares bought and held by Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the
Shares bought and held by Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the
Shares bought and held by Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the
Shares bought and held by Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the
terms of their employment contracts and employee share plans as and when they may vest, are classified as treasury shares and are presented as a deduction
terms of their employment contracts and employee share plans as and when they may vest, are classified as treasury shares and are presented as a deduction
terms of their employment contracts and employee share plans as and when they may vest, are classified as treasury shares and are presented as a deduction
terms of their employment contracts and employee share plans as and when they may vest, are classified as treasury shares and are presented as a deduction
from total equity, until the shares are cancelled or reissued.
from total equity, until the shares are cancelled or reissued.
from total equity, until the shares are cancelled or reissued.
from total equity, until the shares are cancelled or reissued.
Shares acquired as part of the on-market share buyback program are cancelled and presented as a deduction to issued capital, and measured at the amount
Shares acquired as part of the on-market share buyback program are cancelled and presented as a deduction to issued capital, and measured at the amount
Shares acquired as part of the on-market share buyback program are cancelled and presented as a deduction to issued capital, and measured at the amount
paid.
paid.
paid.
Shares acquired as part of the on-market share buyback program are cancelled and presented as a deduction to issued capital, and measured at the amount
paid.
Service period
Service period
2016: 1 July 2016 to 1 July 2017
2016: 1 July 2016 to 1 July 2017
2016: 1 January 2016 to 31 December 2018
2016: 1 January 2016 to 31 December 2018
2015: 22 July 2015 to 1 July 2016
2015: 22 July 2015 to 1 July 2016
2014: 2 May 2014 to 1 July 2015
2014: 2 May 2014 to 1 July 2015
Vesting
Vesting
conditions
conditions
Percentage vesting based on individual
Percentage vesting based on individual
performance against Key Performance Indicators
performance against Key Performance Indicators
2015: 1 July 2015 to 30 June 2018
2015: 1 July 2015 to 30 June 2018
2014: 1 July 2014 to 30 June 2017
2014: 1 July 2014 to 30 June 2017
2013: 20 December 2013 to 19 December 2016
2013: 20 December 2013 to 19 December 2016
2012: 21 December 2012 to 20 December 2015
2012: 21 December 2012 to 20 December 2015
2015: 1 July 2015 to 30 June 2018
2015: 1 July 2015 to 30 June 2018
2014: 28 July 2014 to 15 July 2017
2014: 28 July 2014 to 15 July 2017
2013: 20 December 2013 to 19 December 2016
2013: 20 December 2013 to 19 December 2016
2012: 21 December 2012 to 20 December 2015
2012: 21 December 2012 to 20 December 2015
1. Total Shareholder Return (TSR)
1. Total Shareholder Return (TSR)
TSR performance measured Comparator
TSR performance measured Comparator
Group
Group
75th percentile or greater
75th percentile or greater
Between the 50th and 75th percentile
Between the 50th and 75th percentile
50th percentile
50th percentile
Less than 50th percentile
Less than 50th percentile
2. Absolute Share Price Growth(a)
2. Absolute Share Price Growth(a)
OZ Minerals Share Price Growth over the
OZ Minerals Share Price Growth over the
Performance Period
Performance Period
Less than 20%
Less than 20%
20% or greater
20% or greater
Percentage of vesting
Percentage of vesting
Between 50 and 100 vest
Between 50 and 100 vest
progressively by using a
progressively by using a
straight-line interpolation
straight-line interpolation
Percentage of vesting
Percentage of vesting
100
100
50
50
Nil
Nil
Nil
Nil
100
100
Exercise price
Exercise price
Not applicable – provided at no cost
Not applicable – provided at no cost
Not applicable – provided at no cost
Not applicable – provided at no cost
(a) The LTI Plan performance vesting conditions for periods 2015 and prior were set only on Total Shareholder Return (TSR). The LTI Plan performance vesting conditions for 2016 were set on both Total Shareholder Return
(a) The LTI Plan performance vesting conditions for periods 2015 and prior were set only on Total Shareholder Return (TSR). The LTI Plan performance vesting conditions for 2016 were set on both Total Shareholder Return
(TSR) and Absolute Share Price Growth, weighted at 70% and 30% respectively.
(TSR) and Absolute Share Price Growth, weighted at 70% and 30% respectively.
Performance rights granted under the PRPs or LTIPs are not entitled to dividends nor have voting rights. All performance rights under current performance
Performance rights granted under the PRPs or LTIPs are not entitled to dividends nor have voting rights. All performance rights under current performance
rights plans are automatically exercised upon vesting which is dependent upon the meeting of both the service condition and the performance condition. The
rights plans are automatically exercised upon vesting which is dependent upon the meeting of both the service condition and the performance condition. The
shares when issued on vesting of performance rights rank equally in all respects with previously issued fully paid ordinary shares.
shares when issued on vesting of performance rights rank equally in all respects with previously issued fully paid ordinary shares.
71
71
71
71
72
72
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Contributed Equity
Contributed Equity
Contributed Equity
Contributed Equity
Contributed Equity
Contributed Equity
12 Issued capital
12 Issued capital
2016
2016
$m
$m
2015
2015
$m
$m
2,029.0
2,029.0
2,058.9
2,058.9
298,664,750 shares (2015: 303,470,022 shares)
298,664,750 shares (2015: 303,470,022 shares)
The Company does not have authorised capital or par value in respect of its issued shares. Ordinary shares entitle the holder to participate in dividends and
The Company does not have authorised capital or par value in respect of its issued shares. Ordinary shares entitle the holder to participate in dividends and
the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a
the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a
meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share.
meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share.
In February 2016, OZ Minerals announced an on-market share buyback program of up to $60 million as part of an updated capital management framework.
In February 2016, OZ Minerals announced an on-market share buyback program of up to $60 million as part of an updated capital management framework.
This updated framework reinforces OZ Minerals' strategy of maximising shareholder returns by ensuring that capital is allocated efficiently.
This updated framework reinforces OZ Minerals' strategy of maximising shareholder returns by ensuring that capital is allocated efficiently.
During the year, 4,805,272 shares have been bought and cancelled at an average cost of $6.23 per share. The buyback period expires on 26 February 2017.
During the year, 4,805,272 shares have been bought and cancelled at an average cost of $6.23 per share. The buyback period expires on 26 February 2017.
Recognition and measurement of issued capital
Recognition and measurement of issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction.
Shares bought and held by Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the
Shares bought and held by Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the
terms of their employment contracts and employee share plans as and when they may vest, are classified as treasury shares and are presented as a deduction
terms of their employment contracts and employee share plans as and when they may vest, are classified as treasury shares and are presented as a deduction
from total equity, until the shares are cancelled or reissued.
from total equity, until the shares are cancelled or reissued.
Shares acquired as part of the on-market share buyback program are cancelled and presented as a deduction to issued capital, and measured at the amount
Shares acquired as part of the on-market share buyback program are cancelled and presented as a deduction to issued capital, and measured at the amount
paid.
paid.
13 Share-based payments
13 Share-based payments
13 Share-based payments
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expenses was $6.9 million (2015: $4.4
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expenses was $6.9 million (2015: $4.4
Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expenses was $6.9 million (2015: $4.4
million). A description of OZ Minerals’ significant Performance Rights Plans (‘PRP’) and Long Term Incentive Plans (‘LTIP’) are provided below:
million). A description of OZ Minerals’ significant Performance Rights Plans (‘PRP’) and Long Term Incentive Plans (‘LTIP’) are provided below:
million). A description of OZ Minerals’ significant Performance Rights Plans (‘PRP’) and Long Term Incentive Plans (‘LTIP’) are provided below:
Element
Element
Element
Performance rights granted under PRP
Performance rights granted under PRP
Performance rights granted under PRP
Performance rights granted under LTIP
Performance rights granted under LTIP
Performance rights granted under LTIP
Performance
Performance
period
period
Performance
period
2016: 1 July 2016 to 1 July 2017
2016: 1 July 2016 to 1 July 2017
2016: 1 July 2016 to 1 July 2017
2016: 1 January 2016 to 31 December 2018
2016: 1 January 2016 to 31 December 2018
2016: 1 January 2016 to 31 December 2018
2015: 22 July 2015 to 1 July 2016
2015: 22 July 2015 to 1 July 2016
2015: 22 July 2015 to 1 July 2016
2015: 1 July 2015 to 30 June 2018
2015: 1 July 2015 to 30 June 2018
2015: 1 July 2015 to 30 June 2018
2014: 2 May 2014 to 1 July 2015
2014: 2 May 2014 to 1 July 2015
2014: 2 May 2014 to 1 July 2015
2014: 1 July 2014 to 30 June 2017
2014: 1 July 2014 to 30 June 2017
2014: 1 July 2014 to 30 June 2017
2013: 20 December 2013 to 19 December 2016
2013: 20 December 2013 to 19 December 2016
2013: 20 December 2013 to 19 December 2016
2012: 21 December 2012 to 20 December 2015
2012: 21 December 2012 to 20 December 2015
2012: 21 December 2012 to 20 December 2015
Service period
Service period
Service period
2016: 1 July 2016 to 1 July 2017
2016: 1 July 2016 to 1 July 2017
2016: 1 July 2016 to 1 July 2017
2016: 1 January 2016 to 31 December 2018
2016: 1 January 2016 to 31 December 2018
2016: 1 January 2016 to 31 December 2018
2015: 22 July 2015 to 1 July 2016
2015: 22 July 2015 to 1 July 2016
2015: 22 July 2015 to 1 July 2016
2015: 1 July 2015 to 30 June 2018
2015: 1 July 2015 to 30 June 2018
2015: 1 July 2015 to 30 June 2018
2014: 2 May 2014 to 1 July 2015
2014: 2 May 2014 to 1 July 2015
2014: 2 May 2014 to 1 July 2015
2014: 28 July 2014 to 15 July 2017
2014: 28 July 2014 to 15 July 2017
2014: 28 July 2014 to 15 July 2017
Vesting
Vesting
Vesting
conditions
conditions
conditions
Percentage vesting based on individual
Percentage vesting based on individual
performance against Key Performance Indicators
performance against Key Performance Indicators
Percentage vesting based on individual
performance against Key Performance Indicators
2013: 20 December 2013 to 19 December 2016
2013: 20 December 2013 to 19 December 2016
2013: 20 December 2013 to 19 December 2016
2012: 21 December 2012 to 20 December 2015
2012: 21 December 2012 to 20 December 2015
2012: 21 December 2012 to 20 December 2015
1. Total Shareholder Return (TSR)
1. Total Shareholder Return (TSR)
1. Total Shareholder Return (TSR)
TSR performance measured Comparator
TSR performance measured Comparator
TSR performance measured Comparator
Group
Group
Group
75th percentile or greater
75th percentile or greater
75th percentile or greater
Between the 50th and 75th percentile
Between the 50th and 75th percentile
Between the 50th and 75th percentile
50th percentile
50th percentile
50th percentile
Less than 50th percentile
Less than 50th percentile
Less than 50th percentile
2. Absolute Share Price Growth(a)
2. Absolute Share Price Growth(a)
2. Absolute Share Price Growth(a)
OZ Minerals Share Price Growth over the
OZ Minerals Share Price Growth over the
OZ Minerals Share Price Growth over the
Performance Period
Performance Period
Performance Period
Less than 20%
Less than 20%
Less than 20%
20% or greater
20% or greater
20% or greater
Percentage of vesting
Percentage of vesting
Percentage of vesting
100
100
100
Between 50 and 100 vest
Between 50 and 100 vest
Between 50 and 100 vest
progressively by using a
progressively by using a
progressively by using a
straight-line interpolation
straight-line interpolation
straight-line interpolation
50
50
50
Nil
Nil
Nil
Percentage of vesting
Percentage of vesting
Percentage of vesting
Nil
Nil
Nil
100
100
100
Exercise price
Exercise price
Exercise price
Not applicable – provided at no cost
Not applicable – provided at no cost
Not applicable – provided at no cost
Not applicable – provided at no cost
Not applicable – provided at no cost
Not applicable – provided at no cost
(a) The LTI Plan performance vesting conditions for periods 2015 and prior were set only on Total Shareholder Return (TSR). The LTI Plan performance vesting conditions for 2016 were set on both Total Shareholder Return
(a) The LTI Plan performance vesting conditions for periods 2015 and prior were set only on Total Shareholder Return (TSR). The LTI Plan performance vesting conditions for 2016 were set on both Total Shareholder Return
(a) The LTI Plan performance vesting conditions for periods 2015 and prior were set only on Total Shareholder Return (TSR). The LTI Plan performance vesting conditions for 2016 were set on both Total Shareholder Return
(TSR) and Absolute Share Price Growth, weighted at 70% and 30% respectively.
(TSR) and Absolute Share Price Growth, weighted at 70% and 30% respectively.
(TSR) and Absolute Share Price Growth, weighted at 70% and 30% respectively.
Performance rights granted under the PRPs or LTIPs are not entitled to dividends nor have voting rights. All performance rights under current performance
Performance rights granted under the PRPs or LTIPs are not entitled to dividends nor have voting rights. All performance rights under current performance
Performance rights granted under the PRPs or LTIPs are not entitled to dividends nor have voting rights. All performance rights under current performance
rights plans are automatically exercised upon vesting which is dependent upon the meeting of both the service condition and the performance condition. The
rights plans are automatically exercised upon vesting which is dependent upon the meeting of both the service condition and the performance condition. The
rights plans are automatically exercised upon vesting which is dependent upon the meeting of both the service condition and the performance condition. The
shares when issued on vesting of performance rights rank equally in all respects with previously issued fully paid ordinary shares.
shares when issued on vesting of performance rights rank equally in all respects with previously issued fully paid ordinary shares.
shares when issued on vesting of performance rights rank equally in all respects with previously issued fully paid ordinary shares.
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149
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Contributed Equity
Contributed Equity
Contributed Equity
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Risk Management
14 Financial risk management
14 Financial risk management
14 Financial risk management
• Commodity prices
• Commodity prices
• Commodity prices
• Foreign currency exchange rates
• Foreign currency exchange rates
• Foreign currency exchange rates
• Credit Risk
• Credit Risk
• Credit Risk
• Liquidity Risk
• Liquidity Risk
• Liquidity Risk
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
covering specific risk areas, such as market, credit and liquidity risk.
covering specific risk areas, such as market, credit and liquidity risk.
covering specific risk areas, such as market, credit and liquidity risk.
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
Carried at fair value using level 1 valuation
Carried at fair value using level 1 valuation
Carried at fair value using level 1 valuation
Carried at fair value using level 2 valuation
Carried at fair value using level 2 valuation
Carried at fair value using level 2 valuation
Carried at amortised cost
Carried at amortised cost
Carried at amortised cost
technique (based on share prices quoted on the
technique (based on share prices quoted on the
technique (based on share prices quoted on the
technique (Quoted market prices of copper, gold
technique (Quoted market prices of copper, gold
technique (Quoted market prices of copper, gold
relevant stock exchanges)
relevant stock exchanges)
relevant stock exchanges)
and silver adjusted for specific settlement terms)
and silver adjusted for specific settlement terms)
and silver adjusted for specific settlement terms)
Investments in equity securities
Investments in equity securities
Investments in equity securities
Trade Receivables
Trade Receivables
Trade Receivables
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
Other receivables
Other receivables
Other receivables
The carrying value of each of these items approximates fair value.
The carrying value of each of these items approximates fair value.
The carrying value of each of these items approximates fair value.
Trade payables
Trade payables
Trade payables
Other payables
Other payables
Other payables
The fair value of services received in return for share-based payments granted during the year is based on the fair value of the performance rights granted,
The fair value of services received in return for share-based payments granted during the year is based on the fair value of the performance rights granted,
measured using a Binomial Approximation Option Valuation Model and Monte-Carlo Simulation Valuation Model for Performance Rights Plans and Long-
measured using a Binomial Approximation Option Valuation Model and Monte-Carlo Simulation Valuation Model for Performance Rights Plans and Long-
Term Incentive Plans respectively, with the following inputs:
Term Incentive Plans respectively, with the following inputs:
Grant date
Grant date
Fair value
Fair value
at grant date
at grant date
$
$
Share price
Share price
at grant date
at grant date
$
$
Expected
Expected
volatility
volatility
per cent
per cent
Expected dividends
Expected dividends
Per cent
Per cent
Risk-free
Risk-free
interest rate
interest rate
per cent
per cent
Performance rights granted under the LTIP
Performance rights granted under the LTIP
1 January 2016
1 January 2016
MD & CEO Tranche One (70%)
MD & CEO Tranche One (70%)
MD & CEO Tranche Two (30%)
MD & CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
Other KMP Tranche Two (30%)
21 July 2015
21 July 2015
28 July 2014
28 July 2014
20 December 2013
20 December 2013
21 December 2012
21 December 2012
Performance rights granted under the PRP
Performance rights granted under the PRP
1 July 2016
1 July 2016
21 July 2015
21 July 2015
2 May 2014
2 May 2014
4.1
4.1
3.5
3.5
3.7
3.7
3.2
3.2
2.8
2.8
3.1
3.1
2.0
2.0
4.1
4.1
5.8
5.8
3.8
3.8
3.3
3.3
5.2
5.2
5.2
5.2
5.2
5.2
5.2
5.2
3.9
3.9
4.8
4.8
3.1
3.1
6.8
6.8
6.8
6.8
3.9
3.9
3.5
3.5
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
45.0
45.0
45.0
45.0
45.0
45.0
37.0
37.0
50.0
50.0
45.0
45.0
44.0
44.0
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
2.6
2.6
4.1
4.1
3.5
3.5
5.7
5.7
3.3
3.3
2.6
2.6
4.9
4.9
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.7
2.7
2.9
2.9
2.7
2.7
1.8
1.8
2.1
2.1
2.7
2.7
Performance rights
Performance rights
The movement in the number of performance rights during the year is set out below:
The movement in the number of performance rights during the year is set out below:
Opening balance
Opening balance
Rights granted
Rights granted
Rights vested and exercised
Rights vested and exercised
Rights forfeited
Rights forfeited
Closing balance
Closing balance
2016
2016
Number
Number
2,661,774
2,661,774
1,895,830
1,895,830
(1,000,724)
(1,000,724)
(921,884)
(921,884)
2,634,996
2,634,996
2015
2015
Number
Number
2,157,530
2,157,530
1,949,343
1,949,343
(623,720)
(623,720)
(821,379)
(821,379)
2,661,774
2,661,774
Recognition and measurement of share-based payments
Recognition and measurement of share-based payments
The fair values of share-based payment transactions measured at grant date are recognised as an employee benefit expense with a corresponding increase in
The fair values of share-based payment transactions measured at grant date are recognised as an employee benefit expense with a corresponding increase in
equity over the period during which the employees become unconditionally entitled to the instruments. If the employee does not meet a non-market
equity over the period during which the employees become unconditionally entitled to the instruments. If the employee does not meet a non-market
condition, such as a service condition or Internal KPI’s, any cumulative previously recognised expense is reversed.
condition, such as a service condition or Internal KPI’s, any cumulative previously recognised expense is reversed.
The fair values of the share-based payment transactions granted are adjusted to reflect market vesting conditions at the time of grant, and are not
The fair values of the share-based payment transactions granted are adjusted to reflect market vesting conditions at the time of grant, and are not
subsequently adjusted. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable
subsequently adjusted. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable
and are updated at each balance sheet date. The impact of the revision to original estimates for non-market conditions, if any, is recognised in the Income
and are updated at each balance sheet date. The impact of the revision to original estimates for non-market conditions, if any, is recognised in the Income
Statement with a corresponding adjustment to equity. Changes as a result of market conditions are not adjusted after the initial grant date.
Statement with a corresponding adjustment to equity. Changes as a result of market conditions are not adjusted after the initial grant date.
73
73
74
74
74
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Contributed Equity
Contributed Equity
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Directors’ Report
Directors’ Report
Directors’ Report
Directors’ Report
The fair value of services received in return for share-based payments granted during the year is based on the fair value of the performance rights granted,
The fair value of services received in return for share-based payments granted during the year is based on the fair value of the performance rights granted,
measured using a Binomial Approximation Option Valuation Model and Monte-Carlo Simulation Valuation Model for Performance Rights Plans and Long-
measured using a Binomial Approximation Option Valuation Model and Monte-Carlo Simulation Valuation Model for Performance Rights Plans and Long-
Term Incentive Plans respectively, with the following inputs:
Term Incentive Plans respectively, with the following inputs:
Grant date
Grant date
Fair value
Fair value
at grant date
at grant date
$
$
Share price
Share price
at grant date
at grant date
$
$
Expected
Expected
volatility
volatility
per cent
per cent
Expected dividends
Expected dividends
Per cent
Per cent
Risk-free
Risk-free
interest rate
interest rate
per cent
per cent
Performance rights granted under the LTIP
Performance rights granted under the LTIP
1 January 2016
1 January 2016
MD & CEO Tranche One (70%)
MD & CEO Tranche One (70%)
MD & CEO Tranche Two (30%)
MD & CEO Tranche Two (30%)
Other KMP Tranche One (70%)
Other KMP Tranche One (70%)
Other KMP Tranche Two (30%)
Other KMP Tranche Two (30%)
21 July 2015
21 July 2015
28 July 2014
28 July 2014
20 December 2013
20 December 2013
21 December 2012
21 December 2012
1 July 2016
1 July 2016
21 July 2015
21 July 2015
2 May 2014
2 May 2014
Performance rights granted under the PRP
Performance rights granted under the PRP
4.1
4.1
3.5
3.5
3.7
3.7
3.2
3.2
2.8
2.8
3.1
3.1
2.0
2.0
4.1
4.1
5.8
5.8
3.8
3.8
3.3
3.3
Rights vested and exercised
Rights vested and exercised
Opening balance
Opening balance
Rights granted
Rights granted
Rights forfeited
Rights forfeited
Closing balance
Closing balance
Performance rights
Performance rights
The movement in the number of performance rights during the year is set out below:
The movement in the number of performance rights during the year is set out below:
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
45.0
45.0
45.0
45.0
45.0
45.0
37.0
37.0
50.0
50.0
45.0
45.0
44.0
44.0
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
2.6
2.6
4.1
4.1
3.5
3.5
5.7
5.7
3.3
3.3
2.6
2.6
4.9
4.9
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.7
2.7
2.9
2.9
2.7
2.7
1.8
1.8
2.1
2.1
2.7
2.7
2016
2016
Number
Number
2,661,774
2,661,774
1,895,830
1,895,830
(1,000,724)
(1,000,724)
(921,884)
(921,884)
2,634,996
2,634,996
2015
2015
Number
Number
2,157,530
2,157,530
1,949,343
1,949,343
(623,720)
(623,720)
(821,379)
(821,379)
2,661,774
2,661,774
Recognition and measurement of share-based payments
Recognition and measurement of share-based payments
The fair values of share-based payment transactions measured at grant date are recognised as an employee benefit expense with a corresponding increase in
The fair values of share-based payment transactions measured at grant date are recognised as an employee benefit expense with a corresponding increase in
equity over the period during which the employees become unconditionally entitled to the instruments. If the employee does not meet a non-market
equity over the period during which the employees become unconditionally entitled to the instruments. If the employee does not meet a non-market
condition, such as a service condition or Internal KPI’s, any cumulative previously recognised expense is reversed.
condition, such as a service condition or Internal KPI’s, any cumulative previously recognised expense is reversed.
The fair values of the share-based payment transactions granted are adjusted to reflect market vesting conditions at the time of grant, and are not
The fair values of the share-based payment transactions granted are adjusted to reflect market vesting conditions at the time of grant, and are not
subsequently adjusted. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable
subsequently adjusted. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable
and are updated at each balance sheet date. The impact of the revision to original estimates for non-market conditions, if any, is recognised in the Income
and are updated at each balance sheet date. The impact of the revision to original estimates for non-market conditions, if any, is recognised in the Income
Statement with a corresponding adjustment to equity. Changes as a result of market conditions are not adjusted after the initial grant date.
Statement with a corresponding adjustment to equity. Changes as a result of market conditions are not adjusted after the initial grant date.
5.2
5.2
5.2
5.2
5.2
5.2
5.2
5.2
3.9
3.9
4.8
4.8
3.1
3.1
6.8
6.8
6.8
6.8
3.9
3.9
3.5
3.5
73
73
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Operational and Financial Review
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
14 Financial risk management
14 Financial risk management
14 Financial risk management
14 Financial risk management
14 Financial risk management
positioned for growth.
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals’ Group Treasury Function (‘Group Treasury’) manages the financial risks of the Consolidated Entity. Group Treasury identifies, evaluates and
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
positioned for growth.
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
manages financial risks in close co-operation with OZ Minerals’ operating units. The Board approves principles for overall risk management, as well as policies
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
covering specific risk areas, such as market, credit and liquidity risk.
covering specific risk areas, such as market, credit and liquidity risk.
covering specific risk areas, such as market, credit and liquidity risk.
covering specific risk areas, such as market, credit and liquidity risk.
covering specific risk areas, such as market, credit and liquidity risk.
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, as well as its objectives, policies
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Commodity prices
• Commodity prices
• Commodity prices
• Commodity prices
• Commodity prices
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Foreign currency exchange rates
• Foreign currency exchange rates
• Foreign currency exchange rates
• Foreign currency exchange rates
• Foreign currency exchange rates
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Credit Risk
• Credit Risk
• Credit Risk
• Credit Risk
• Credit Risk
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Liquidity Risk
• Liquidity Risk
• Liquidity Risk
• Liquidity Risk
• Liquidity Risk
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
The Consolidated Entity holds the following financial instruments as presented on the face of the Balance Sheet:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Carried at fair value using level 2 valuation
Carried at fair value using level 1 valuation
Carried at fair value using level 1 valuation
Carried at fair value using level 2 valuation
Carried at fair value using level 2 valuation
Carried at fair value using level 2 valuation
Carried at fair value using level 2 valuation
Carried at fair value using level 1 valuation
Carried at fair value using level 1 valuation
Carried at fair value using level 1 valuation
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
technique (Quoted market prices of copper, gold
technique (Quoted market prices of copper, gold
technique (based on share prices quoted on the
technique (based on share prices quoted on the
technique (Quoted market prices of copper, gold
technique (Quoted market prices of copper, gold
technique (Quoted market prices of copper, gold
technique (based on share prices quoted on the
technique (based on share prices quoted on the
technique (based on share prices quoted on the
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
and silver adjusted for specific settlement terms)
relevant stock exchanges)
relevant stock exchanges)
and silver adjusted for specific settlement terms)
and silver adjusted for specific settlement terms)
and silver adjusted for specific settlement terms)
and silver adjusted for specific settlement terms)
relevant stock exchanges)
relevant stock exchanges)
relevant stock exchanges)
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
Investments in equity securities
Investments in equity securities
Investments in equity securities
Investments in equity securities
Investments in equity securities
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The carrying value of each of these items approximates fair value.
The carrying value of each of these items approximates fair value.
The carrying value of each of these items approximates fair value.
The carrying value of each of these items approximates fair value.
The carrying value of each of these items approximates fair value.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Carried at amortised cost
Carried at amortised cost
Carried at amortised cost
Carried at amortised cost
Carried at amortised cost
Trade Receivables
Trade Receivables
Trade Receivables
Trade Receivables
Other receivables
Other receivables
Other receivables
Other receivables
Trade Receivables
Other receivables
Other payables
Other payables
Other payables
Other payables
Trade payables
Trade payables
Trade payables
Trade payables
Other payables
Trade payables
151
74
74
74
74
74
12
12
12
12
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Investments in equity securities
Recognition and measurement
Recognition and measurement
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
m
$
180
160
140
120
100
80
60
40
20
0
176.8
([VALUE])
(126.5)
(18.5)
([VALUE])
31.8
(3.3)
([VALUE])
(10.3)
([VALUE])
18.2
31 December 2014
Disposals
Net change in
fair value
31 December 2015
Disposals
Net change in
fair value
31 December 2016
Accounting for investments in equity securities
Judgement is required in assessing whether power over an investee exists where the Consolidated Entity holds less than a majority of the voting rights.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
Consolidated Entity’s voting and potential voting rights.
Despite holding 21.1 per cent of Toro Energy Limited’s (‘Toro’) voting rights it was determined that OZ Minerals does not exert significant influence over Toro
considering the distribution of voting rights amongst Toro’s other shareholders and given OZ Minerals does not have board or management representation
and does not participate in the financial or operating policies of Toro.
Financial assets measured at fair value include investments in equity instruments which are not held for trading. The Consolidated Entity recognises fair value
changes in Other Comprehensive Income based on an irrevocable election at initial recognition. Amounts related to the change in fair value of equity
securities are classified in Other Comprehensive Income and are never reclassified to the Income Statement at a later date.
Non-derivative financial assets
Non-derivative financial assets
The Consolidated Entity classifies its financial assets into the following categories:
The Consolidated Entity classifies its financial assets into the following categories:
• Financial assets at fair value through Other Comprehensive Income;
• Financial assets at fair value through Other Comprehensive Income;
• Financial assets at fair value through profit and loss; and
• Financial assets at fair value through profit and loss; and
• Loans and receivables at amortised cost.
• Loans and receivables at amortised cost.
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
‘Revenue’.
‘Revenue’.
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
or more events having an impact on the estimated future cash flows of the asset.
or more events having an impact on the estimated future cash flows of the asset.
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account.
carrying amount of the asset is reduced through the use of an allowance account.
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
Non-derivative financial liabilities
Non-derivative financial liabilities
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
unsecured and are usually paid within 30 days of recognition.
unsecured and are usually paid within 30 days of recognition.
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
Derivative financial instruments
Derivative financial instruments
Recognition and measurement
Recognition and measurement
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
Income based the designation and effectiveness of the hedge instrument.
Income based the designation and effectiveness of the hedge instrument.
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
75
76
76
Finance
Notes to the Consolidated Financial Statements
Risk Management
Investments in equity securities
176.8
([VALUE])
m
$
180
160
140
120
100
80
60
40
20
0
([VALUE])
31.8
([VALUE])
([VALUE])
18.2
31 December 2014
Disposals
Net change in
31 December 2015
Disposals
Net change in
31 December 2016
fair value
fair value
Accounting for investments in equity securities
Judgement is required in assessing whether power over an investee exists where the Consolidated Entity holds less than a majority of the voting rights.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
Consolidated Entity’s voting and potential voting rights.
Despite holding 21.1 per cent of Toro Energy Limited’s (‘Toro’) voting rights it was determined that OZ Minerals does not exert significant influence over Toro
considering the distribution of voting rights amongst Toro’s other shareholders and given OZ Minerals does not have board or management representation
and does not participate in the financial or operating policies of Toro.
Financial assets measured at fair value include investments in equity instruments which are not held for trading. The Consolidated Entity recognises fair value
changes in Other Comprehensive Income based on an irrevocable election at initial recognition. Amounts related to the change in fair value of equity
securities are classified in Other Comprehensive Income and are never reclassified to the Income Statement at a later date.
Directors’ Report
Directors’ Report
Directors’ Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Risk Management
Operational and Financial Review
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Recognition and measurement
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
Recognition and measurement
Recognition and measurement
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
copper deposits at Carrapateena.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
copper deposits at Carrapateena.
Non-derivative financial assets
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Non-derivative financial assets
Non-derivative financial assets
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
The Consolidated Entity classifies its financial assets into the following categories:
commitment to operating discipline. Highlights for Prominent Hill were:
The Consolidated Entity classifies its financial assets into the following categories:
The Consolidated Entity classifies its financial assets into the following categories:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Financial assets at fair value through Other Comprehensive Income;
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Financial assets at fair value through Other Comprehensive Income;
• Financial assets at fair value through Other Comprehensive Income;
• Copper guidance achieved for 2016 and for the second consecutive year;
commitment to operating discipline. Highlights for Prominent Hill were:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Financial assets at fair value through profit and loss; and
• Financial assets at fair value through profit and loss; and
• Financial assets at fair value through profit and loss; and
commitment to operating discipline. Highlights for Prominent Hill were:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Copper guidance achieved for 2016 and for the second consecutive year;
• Loans and receivables at amortised cost.
• Loans and receivables at amortised cost.
• Loans and receivables at amortised cost.
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
‘Revenue’.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
‘Revenue’.
‘Revenue’.
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
of the project is currently underway with a number of milestones achieved in 2016:
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
or more events having an impact on the estimated future cash flows of the asset.
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
or more events having an impact on the estimated future cash flows of the asset.
or more events having an impact on the estimated future cash flows of the asset.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account.
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
carrying amount of the asset is reduced through the use of an allowance account.
carrying amount of the asset is reduced through the use of an allowance account.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
Australian and Northern Territory borders.
Non-derivative financial liabilities
Non-derivative financial liabilities
Non-derivative financial liabilities
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
unsecured and are usually paid within 30 days of recognition.
unsecured and are usually paid within 30 days of recognition.
unsecured and are usually paid within 30 days of recognition.
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
Derivative financial instruments
Derivative financial instruments
Derivative financial instruments
Recognition and measurement
Recognition and measurement
Recognition and measurement
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
Income based the designation and effectiveness of the hedge instrument.
Income based the designation and effectiveness of the hedge instrument.
Income based the designation and effectiveness of the hedge instrument.
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
12
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
12
12
153
75
76
76
76
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Risk Management
Recognition and measurement
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
Non-derivative financial assets
The Consolidated Entity classifies its financial assets into the following categories:
• Financial assets at fair value through Other Comprehensive Income;
• Financial assets at fair value through profit and loss; and
• Loans and receivables at amortised cost.
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
‘Revenue’.
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
or more events having an impact on the estimated future cash flows of the asset.
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account.
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
Non-derivative financial liabilities
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
unsecured and are usually paid within 30 days of recognition.
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
Notes to the Consolidated Financial Statements
Derivative financial instruments
Risk Management
Notes to the Consolidated Financial Statements
Recognition and measurement
Risk Management
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
Income based the designation and effectiveness of the hedge instrument.
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
Income Statement if the hedge relationship is no longer effective or the underlying hedged item has been recognised in the Income Statement. Any ineffective
portion of changes in the fair value of derivative financial instruments is recognised immediately in Income Statement. The amount recognised in Other
Comprehensive Income is reclassified to Income Statement in the same period as the underlying item is recognised in the Income Statement.
76
Commodity price risk management and sensitivity analysis
The Consolidated Entity is exposed to commodity price volatility on the sale of metal in concentrates such as copper and gold, which are priced on, or
benchmarked to, open market exchanges. OZ Minerals aims to realise the prevailing forward copper price at the time of shipment of concentrates to
customers which match the quotation period of the underlying sale.
Gold derivative contracts
OZ Minerals has entered into gold forward contracts to manage its risk of fluctuations in cash flows arising from forecast gold sales in US$ due to movements
in gold prices. The company has designated these gold derivative contracts as cash flow hedges.
The hedged gold sales represent around 40 per cent of forecast sales (gold oz.) in the period from 2018 to 2021 and around 60 per cent of the gold
contained in stockpiles at 31 December 2016. This program will be reviewed on a quarterly basis as the stockpile continues to grow.
The forward contracts have been designated as cash flow hedges under AASB 9 and were assessed to be fully effective in managing the underlying risk.
Accordingly, a tax-effected fair value adjustment of $3.7 million (net of tax) was recognised in Other Comprehensive Income. At 31 December 2016, contracts
for 200,263 ounces of gold were outstanding with an average strike of A$1,731 per ounce, provided in the chart below.
Forward contracts entered (gold oz)
OZ Minerals gold forward strike price (A$ per gold oz)
)
z
o
l
d
o
g
(
l
s
e
a
S
t
s
a
c
a
e
r
o
F
24,000
22,000
20,000
18,000
16,000
14,000
12,000
10,000
8,000
1,850
1,830
1,810
1,790
1,770
1,750
1,730
1,710
1,690
1,670
1,650
)
z
o
r
e
p
D
U
A
(
e
t
a
R
d
r
a
w
r
o
F
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
77
Notes to the Consolidated Financial Statements
Risk Management
Hedge effectiveness
Hedge relationship which is established at inception is assessed for existence and effectiveness in managing the underlying risk. Where a derivative has
expired or is assessed to be ineffective, all future fair value changes will be recognised in the Income Statement. Determination of effectiveness requires the
exercise of significant judgement regarding mine plans, sales forecasts and recoverable metal contained in mineral reserves and resources.
Copper derivative contracts
The consolidated entity manages the exposure to volatility in copper price on completed sales from contractual Quotation Pricing adjustments, by entering
into copper derivative contracts at the time of concentrate shipments which fix the forward price at the time of shipment. These derivative contracts are
designated as hedges and are recognised within the Income Statement as part of ‘Revenue’. As a result of these hedges, the impact of changes in copper
price on the Income Statement is expected to be negligible.
Commodity price sensitivity analysis
Due to the copper price hedging activity, if copper prices were to vary, the expected impact on the Income Statement would be negligible. As such, the below
analysis focuses on the impact of movements in the gold prices, as variations in silver prices have been deemed immaterial for the purpose of this analysis. In
accordance with Australian Accounting Standards, the sensitivity analysis is on all financial assets and liabilities deemed material to the Consolidated Entity.
+10% movement in Gold prices
-10% movement in Gold prices
Impact on Income
Impact on Other
Impact on Income
Impact on Other
Statement
Comprehensive
Statement
Comprehensive Income
Notes to the Consolidated Financial Statements
Trade receivables
Risk Management
Gold hedges (FEC’s)
Income
–
(0.8)
(0.8)
–
–
–
1.2
–
1.2
1.6
–
1.6
(1.2)
–
(1.2)
(1.6)
–
(1.6)
Trade receivables
Gold hedges (FEC’s)
2016
Total
2015
Total
the year.
A 10% movement in gold prices, which is based on reasonably possible changes over a financial year and reflects the variability management applies in
forecasting sensitivity results in $1.6 million impact on the Income Statement on the trade receivables balance of $64.9 million (2015: $91.4 million) and $0.6
million impact on the derivative financial liability of $11.4 million (2015: nil). In accordance with the Accounting standards, the impact has been calculated on
the outstanding balance that is subject to commodity price risk and does not include the impact of the movement in commodity prices on the total revenue for
Foreign currency exchange risk management and sensitivity analysis
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar.
All OZ Minerals operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic
environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement when considering a number of
factors including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact revenue. In addition,
consideration must be given to the currency in which financing and operating activities are undertaken.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of financial assets and liabilities
denominated in foreign currencies are recognised in the Income Statement except for gold derivative contracts which are recognised in Other Comprehensive
Income. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting date is disclosed
below. In early 2016, the consolidated entity determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments.
Denominated in US$
Other currencies
78
presented in A$m
presented in
A$m
2016
Cash and cash equivalents
Derivative Financial Instruments
Trade receivables
Trade payables
Total
2015
Trade receivables
Trade payables
Total
Cash and cash equivalents
Derivative Financial Instruments
A$:US$
64.1
(11.1)
69.4
(1.3)
121.1
268.0
–
91.4
(0.6)
358.8
(0.1)
(0.1)
–
–
–
–
–
–
(2.2)
(2.2)
The US dollar exchange rates during the year were as follows:
Average rate
31 December spot rate
2016
0.7441
2015
0.7527
2016
0.7219
2015
0.7287
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent (2015: 5 per cent), and all
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $4.7 million, and Other Comprehensive Income would
have changed by $0.6 million (2015: after tax profit $13.3 million, and Other Comprehensive Income nil).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per
cent change in the foreign currency rate (2015: 5 per cent).
Interest rate risk management and sensitivity analysis
The Consolidated Entity does not have any borrowings at 31 December 2016 and therefore is not exposed to interest rate risk on borrowings. The
Consolidated Entity carries term deposits with fixed interest rates. The effect of a change in interest rates at balance date would not have a significant impact
on the after tax profit as substantially all cash deposits have fixed interest rate terms.
79
–
0.8
0.8
–
–
–
Total
A$m
64.1
(11.1)
69.4
(1.4)
121.0
268.0
–
91.4
(2.8)
356.6
Finance
Notes to the Consolidated Financial Statements
Risk Management
Recognition and measurement
Financial assets and liabilities are recognised when a member of the Consolidated Entity becomes party to the contractual provisions of an instrument.
Non-derivative financial assets
The Consolidated Entity classifies its financial assets into the following categories:
• Financial assets at fair value through Other Comprehensive Income;
• Financial assets at fair value through profit and loss; and
• Loans and receivables at amortised cost.
Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs.
Trade receivables, including those containing an embedded derivative, are carried at fair value. On adoption of AASB 9, the embedded derivative and the
receivables are accounted for as one instrument and measured at fair value through profit or loss and recognised in the Income Statement as part of
‘Revenue’.
Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in
relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 60 days. Other receivables
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
The Consolidated Entity derecognises a financial asset or part of it when, and only when, the contractual rights to the cash flows from the financial asset
expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a
financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the Income Statement.
A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one
or more events having an impact on the estimated future cash flows of the asset.
An impairment loss in respect of financial assets measured at amortised cost is recognised in the Income Statement and is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account.
In the event that an impairment loss is reversed, it will be to the extent that the asset’s carrying amount does not exceed what the carrying amount would
have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in the Income Statement.
Non-derivative financial liabilities
All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for
goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing,
unsecured and are usually paid within 30 days of recognition.
The Consolidated Entity derecognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount
of the liability derecognised and the consideration paid and payable is recognised in the Income Statement.
Derivative financial instruments
Notes to the Consolidated Financial Statements
Recognition and measurement
Risk Management
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. Changes in the fair value of any derivative instrument are recognised in the Income Statement, or Other Comprehensive
Income based the designation and effectiveness of the hedge instrument.
Derivative financial instruments that have been designated as a hedge instrument are initially recognised at fair value on the date the derivative contract is
entered into, and are subsequently remeasured to their fair value at each reporting date. Formal designation of the hedge and documentation of the
relationship between the hedging instrument and the hedged item is finalised at the inception of the transaction.
Changes in the fair value of the derivative financial instrument which has been designated in a hedge relationship will be recognised in Other Comprehensive
Income if the hedging relationship remains effective and the underlying hedge item has not been recognised in the Income Statement, or recognised in the
Income Statement if the hedge relationship is no longer effective or the underlying hedged item has been recognised in the Income Statement. Any ineffective
portion of changes in the fair value of derivative financial instruments is recognised immediately in Income Statement. The amount recognised in Other
Comprehensive Income is reclassified to Income Statement in the same period as the underlying item is recognised in the Income Statement.
76
Commodity price risk management and sensitivity analysis
The Consolidated Entity is exposed to commodity price volatility on the sale of metal in concentrates such as copper and gold, which are priced on, or
benchmarked to, open market exchanges. OZ Minerals aims to realise the prevailing forward copper price at the time of shipment of concentrates to
customers which match the quotation period of the underlying sale.
Gold derivative contracts
in gold prices. The company has designated these gold derivative contracts as cash flow hedges.
The hedged gold sales represent around 40 per cent of forecast sales (gold oz.) in the period from 2018 to 2021 and around 60 per cent of the gold
contained in stockpiles at 31 December 2016. This program will be reviewed on a quarterly basis as the stockpile continues to grow.
The forward contracts have been designated as cash flow hedges under AASB 9 and were assessed to be fully effective in managing the underlying risk.
Accordingly, a tax-effected fair value adjustment of $3.7 million (net of tax) was recognised in Other Comprehensive Income. At 31 December 2016, contracts
for 200,263 ounces of gold were outstanding with an average strike of A$1,731 per ounce, provided in the chart below.
Forward contracts entered (gold oz)
OZ Minerals gold forward strike price (A$ per gold oz)
)
z
o
d
l
o
g
(
s
e
l
a
S
t
s
a
c
a
e
r
o
F
24,000
22,000
20,000
18,000
16,000
14,000
12,000
10,000
8,000
1,850
1,830
1,810
1,790
1,770
1,750
1,730
1,710
1,690
1,670
1,650
)
z
o
r
e
p
D
U
A
(
e
t
a
R
d
r
a
w
r
o
F
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2018
2018
2019
2019
2019
2019
2020
2020
2020
2020
2021
2021
2021
77
Notes to the Consolidated Financial Statements
Risk Management
Hedge effectiveness
Hedge relationship which is established at inception is assessed for existence and effectiveness in managing the underlying risk. Where a derivative has
expired or is assessed to be ineffective, all future fair value changes will be recognised in the Income Statement. Determination of effectiveness requires the
exercise of significant judgement regarding mine plans, sales forecasts and recoverable metal contained in mineral reserves and resources.
Copper derivative contracts
The consolidated entity manages the exposure to volatility in copper price on completed sales from contractual Quotation Pricing adjustments, by entering
into copper derivative contracts at the time of concentrate shipments which fix the forward price at the time of shipment. These derivative contracts are
designated as hedges and are recognised within the Income Statement as part of ‘Revenue’. As a result of these hedges, the impact of changes in copper
price on the Income Statement is expected to be negligible.
OZ Minerals has entered into gold forward contracts to manage its risk of fluctuations in cash flows arising from forecast gold sales in US$ due to movements
Commodity price sensitivity analysis
Due to the copper price hedging activity, if copper prices were to vary, the expected impact on the Income Statement would be negligible. As such, the below
analysis focuses on the impact of movements in the gold prices, as variations in silver prices have been deemed immaterial for the purpose of this analysis. In
accordance with Australian Accounting Standards, the sensitivity analysis is on all financial assets and liabilities deemed material to the Consolidated Entity.
Impact on Income
Statement
+10% movement in Gold prices
Impact on Other
Comprehensive
Income
Impact on Income
Statement
-10% movement in Gold prices
Impact on Other
Comprehensive Income
2016
Trade receivables
Gold hedges (FEC’s)
Total
1.2
–
1.2
2015
Notes to the Consolidated Financial Statements
Trade receivables
1.6
Risk Management
Gold hedges (FEC’s)
–
Total
1.6
–
(0.8)
(0.8)
–
–
–
(1.2)
–
(1.2)
(1.6)
–
(1.6)
–
0.8
0.8
–
–
–
A 10% movement in gold prices, which is based on reasonably possible changes over a financial year and reflects the variability management applies in
forecasting sensitivity results in $1.6 million impact on the Income Statement on the trade receivables balance of $64.9 million (2015: $91.4 million) and $0.6
million impact on the derivative financial liability of $11.4 million (2015: nil). In accordance with the Accounting standards, the impact has been calculated on
the outstanding balance that is subject to commodity price risk and does not include the impact of the movement in commodity prices on the total revenue for
the year.
Foreign currency exchange risk management and sensitivity analysis
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar.
All OZ Minerals operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic
environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement when considering a number of
factors including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact revenue. In addition,
consideration must be given to the currency in which financing and operating activities are undertaken.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of financial assets and liabilities
denominated in foreign currencies are recognised in the Income Statement except for gold derivative contracts which are recognised in Other Comprehensive
Income. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting date is disclosed
below. In early 2016, the consolidated entity determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments.
155
2016
Cash and cash equivalents
Derivative Financial Instruments
Trade receivables
Trade payables
Total
2015
Trade receivables
Trade payables
Total
Cash and cash equivalents
Derivative Financial Instruments
A$:US$
The US dollar exchange rates during the year were as follows:
Denominated in US$
presented in A$m
78
Other currencies
presented in
A$m
(0.1)
(0.1)
–
–
–
–
–
–
(2.2)
(2.2)
64.1
(11.1)
69.4
(1.3)
121.1
268.0
–
91.4
(0.6)
358.8
Total
A$m
64.1
(11.1)
69.4
(1.4)
121.0
268.0
–
91.4
(2.8)
356.6
Average rate
31 December spot rate
2016
0.7441
2015
0.7527
2016
0.7219
2015
0.7287
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent (2015: 5 per cent), and all
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $4.7 million, and Other Comprehensive Income would
have changed by $0.6 million (2015: after tax profit $13.3 million, and Other Comprehensive Income nil).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per
cent change in the foreign currency rate (2015: 5 per cent).
Interest rate risk management and sensitivity analysis
The Consolidated Entity does not have any borrowings at 31 December 2016 and therefore is not exposed to interest rate risk on borrowings. The
Consolidated Entity carries term deposits with fixed interest rates. The effect of a change in interest rates at balance date would not have a significant impact
on the after tax profit as substantially all cash deposits have fixed interest rate terms.
79
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Notes to the Consolidated Financial Statements
Risk Management
Foreign currency exchange risk management and sensitivity analysis
Foreign currency exchange risk management and sensitivity analysis
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar.
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar.
All OZ Minerals operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic
environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement when considering a number of
All OZ Minerals operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic
factors including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact revenue. In addition,
environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement when considering a number of
consideration must be given to the currency in which financing and operating activities are undertaken.
factors including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact revenue. In addition,
consideration must be given to the currency in which financing and operating activities are undertaken.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of financial assets and liabilities
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange
denominated in foreign currencies are recognised in the Income Statement except for gold derivative contracts which are recognised in Other Comprehensive
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of financial assets and liabilities
Income. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting date is disclosed
denominated in foreign currencies are recognised in the Income Statement except for gold derivative contracts which are recognised in Other Comprehensive
below. In early 2016, the consolidated entity determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments.
Income. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting date is disclosed
below. In early 2016, the consolidated entity determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments.
Denominated in US$
presented in A$m
Denominated in US$
presented in A$m
Other currencies
presented in
Other currencies
A$m
presented in
A$m
Total
A$m
Total
A$m
2016
2016
Cash and cash equivalents
Cash and cash equivalents
Derivative Financial Instruments
Derivative Financial Instruments
Trade receivables
Trade receivables
Trade payables
Trade payables
Total
Total
2015
2015
Cash and cash equivalents
Cash and cash equivalents
Derivative Financial Instruments
Derivative Financial Instruments
Trade receivables
Trade receivables
Trade payables
Trade payables
Total
Total
64.1
64.1
(11.1)
(11.1)
69.4
69.4
(1.3)
(1.3)
121.1
121.1
268.0
268.0
–
–
91.4
91.4
(0.6)
(0.6)
358.8
358.8
–
–
–
–
–
–
(0.1)
(0.1)
(0.1)
(0.1)
–
–
–
–
–
–
(2.2)
(2.2)
(2.2)
(2.2)
64.1
64.1
(11.1)
(11.1)
69.4
69.4
(1.4)
(1.4)
121.0
121.0
268.0
268.0
–
–
91.4
91.4
(2.8)
(2.8)
356.6
356.6
Europe
Asia
Australia
Total
The US dollar exchange rates during the year were as follows:
The US dollar exchange rates during the year were as follows:
Average rate
Average rate
2015
2016
31 December spot rate
31 December spot rate
2015
2016
2016
0.7441
2015
0.7527
2016
0.7219
0.7441
0.7527
A$:US$
A$:US$
0.7287
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent (2015: 5 per cent), and all
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $4.7 million, and Other Comprehensive Income would
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent (2015: 5 per cent), and all
have changed by $0.6 million (2015: after tax profit $13.3 million, and Other Comprehensive Income nil).
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $4.7 million, and Other Comprehensive Income would
have changed by $0.6 million (2015: after tax profit $13.3 million, and Other Comprehensive Income nil).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per
cent change in the foreign currency rate (2015: 5 per cent).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per
cent change in the foreign currency rate (2015: 5 per cent).
Interest rate risk management and sensitivity analysis
Interest rate risk management and sensitivity analysis
The Consolidated Entity does not have any borrowings at 31 December 2016 and therefore is not exposed to interest rate risk on borrowings. The
Consolidated Entity carries term deposits with fixed interest rates. The effect of a change in interest rates at balance date would not have a significant impact
The Consolidated Entity does not have any borrowings at 31 December 2016 and therefore is not exposed to interest rate risk on borrowings. The
on the after tax profit as substantially all cash deposits have fixed interest rate terms.
Consolidated Entity carries term deposits with fixed interest rates. The effect of a change in interest rates at balance date would not have a significant impact
on the after tax profit as substantially all cash deposits have fixed interest rate terms.
0.7219
2015
0.7287
79
79
80
Notes to the Consolidated Financial Statements
Risk Management
Credit risk management
instruments.
Credit risk refers to the risk that any counterparty will default on its contractual obligations resulting in financial loss to the Consolidated Entity. Counterparty
credit risk arises through sales of metal in concentrate on normal terms of trade, through deposits of cash, finance lease receivable and derivative financial
At the reporting date, the carrying amount of financial assets in the balance sheet represents the maximum credit exposure on cash and cash equivalents,
trade receivables, other receivables, derivative assets and lease receivables.
The credit risk on cash and cash equivalents is managed by restricting financial transactions to banks which are assigned S&P equivalent of A-1 short term
credit ratings by international credit rating agencies and limiting the amount of funds that can be invested with a single counterparty in accordance with
OZ Minerals’ Credit Risk Management Policy.
Credit risk in trade receivables is managed by undertaking regular risk assessment and reviewing credit limits of customers. As there are a relatively small
number of transactions, they are closely monitored to ensure risk of default is kept to an acceptably low level. Sales contracts require a provisional payment of
at least 90 per cent of the estimated value of each sale either promptly after vessel loading or upon vessel arriving at the discharge port. Where applicable,
sales are covered by letter of credit arrangements with approved financial institutions.
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region of the customer was:
2016
$m
–
46.7
22.7
69.4
2015
$m
34.9
27.5
29.0
91.4
Major customers who individually accounted for more than 10 per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per
cent). These customers also represent 96.0 per cent of the trade receivables balance as at 31 December 2016 (2015: 28.1 per cent). There have been no
instances of customer default during 2016 and there are no significant receivables which are past due at the reporting date.
Credit risk on derivative financial instruments is managed by restricting transactions only with counterparties who are at least Category Two members of the
LME, or which are assigned S&P equivalent of A-1 short term credit ratings by international credit rating agencies
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Foreign currency exchange risk management and sensitivity analysis
Foreign currency exchange risk management and sensitivity analysis
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar.
The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar.
All OZ Minerals operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic
environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement when considering a number of
All OZ Minerals operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic
factors including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact revenue. In addition,
environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement when considering a number of
consideration must be given to the currency in which financing and operating activities are undertaken.
factors including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact revenue. In addition,
consideration must be given to the currency in which financing and operating activities are undertaken.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of financial assets and liabilities
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange
denominated in foreign currencies are recognised in the Income Statement except for gold derivative contracts which are recognised in Other Comprehensive
gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of financial assets and liabilities
Income. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting date is disclosed
denominated in foreign currencies are recognised in the Income Statement except for gold derivative contracts which are recognised in Other Comprehensive
below. In early 2016, the consolidated entity determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments.
Income. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by its currency risk exposure at the reporting date is disclosed
below. In early 2016, the consolidated entity determined to maintain its cash holdings in A$ with US$ maintained only to meet US$ commitments.
Denominated in US$
presented in A$m
Denominated in US$
presented in A$m
Other currencies
presented in
Other currencies
presented in
A$m
2016
2016
Cash and cash equivalents
Cash and cash equivalents
Derivative Financial Instruments
Derivative Financial Instruments
Trade receivables
Trade receivables
Trade payables
Trade payables
Total
Total
2015
2015
Cash and cash equivalents
Cash and cash equivalents
Derivative Financial Instruments
Derivative Financial Instruments
Trade receivables
Trade receivables
Trade payables
Trade payables
Total
Total
A$:US$
A$:US$
64.1
64.1
(11.1)
(11.1)
69.4
69.4
(1.3)
(1.3)
121.1
121.1
268.0
268.0
–
–
91.4
91.4
(0.6)
(0.6)
358.8
358.8
A$m
–
(0.1)
(0.1)
(0.1)
(0.1)
–
–
–
–
–
–
–
–
–
–
–
(2.2)
(2.2)
(2.2)
(2.2)
Total
A$m
Total
A$m
64.1
64.1
(11.1)
(11.1)
69.4
69.4
(1.4)
(1.4)
121.0
121.0
268.0
268.0
–
–
91.4
91.4
(2.8)
(2.8)
356.6
356.6
2015
2015
0.7287
0.7287
The US dollar exchange rates during the year were as follows:
The US dollar exchange rates during the year were as follows:
Average rate
Average rate
2015
2015
0.7527
0.7527
2016
2016
0.7441
0.7441
2016
2016
0.7219
0.7219
31 December spot rate
31 December spot rate
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent (2015: 5 per cent), and all
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $4.7 million, and Other Comprehensive Income would
At reporting date, if the foreign currency exchange rates strengthened/(weakened) against the functional currency by 5 per cent (2015: 5 per cent), and all
have changed by $0.6 million (2015: after tax profit $13.3 million, and Other Comprehensive Income nil).
other variables were held constant, the Consolidated Entity’s after tax profit would have changed by $4.7 million, and Other Comprehensive Income would
have changed by $0.6 million (2015: after tax profit $13.3 million, and Other Comprehensive Income nil).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per
cent change in the foreign currency rate (2015: 5 per cent).
The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per
cent change in the foreign currency rate (2015: 5 per cent).
Interest rate risk management and sensitivity analysis
Interest rate risk management and sensitivity analysis
The Consolidated Entity does not have any borrowings at 31 December 2016 and therefore is not exposed to interest rate risk on borrowings. The
Consolidated Entity carries term deposits with fixed interest rates. The effect of a change in interest rates at balance date would not have a significant impact
The Consolidated Entity does not have any borrowings at 31 December 2016 and therefore is not exposed to interest rate risk on borrowings. The
on the after tax profit as substantially all cash deposits have fixed interest rate terms.
Consolidated Entity carries term deposits with fixed interest rates. The effect of a change in interest rates at balance date would not have a significant impact
on the after tax profit as substantially all cash deposits have fixed interest rate terms.
79
79
Notes to the Consolidated Financial Statements
Risk Management
Credit risk management
Credit risk refers to the risk that any counterparty will default on its contractual obligations resulting in financial loss to the Consolidated Entity. Counterparty
credit risk arises through sales of metal in concentrate on normal terms of trade, through deposits of cash, finance lease receivable and derivative financial
instruments.
At the reporting date, the carrying amount of financial assets in the balance sheet represents the maximum credit exposure on cash and cash equivalents,
trade receivables, other receivables, derivative assets and lease receivables.
The credit risk on cash and cash equivalents is managed by restricting financial transactions to banks which are assigned S&P equivalent of A-1 short term
credit ratings by international credit rating agencies and limiting the amount of funds that can be invested with a single counterparty in accordance with
OZ Minerals’ Credit Risk Management Policy.
Credit risk in trade receivables is managed by undertaking regular risk assessment and reviewing credit limits of customers. As there are a relatively small
number of transactions, they are closely monitored to ensure risk of default is kept to an acceptably low level. Sales contracts require a provisional payment of
at least 90 per cent of the estimated value of each sale either promptly after vessel loading or upon vessel arriving at the discharge port. Where applicable,
sales are covered by letter of credit arrangements with approved financial institutions.
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region of the customer was:
Europe
Asia
Australia
Total
2016
$m
–
46.7
22.7
69.4
2015
$m
34.9
27.5
29.0
91.4
Major customers who individually accounted for more than 10 per cent of total revenue contributed approximately 69 per cent of total revenue (2015: 56 per
cent). These customers also represent 96.0 per cent of the trade receivables balance as at 31 December 2016 (2015: 28.1 per cent). There have been no
instances of customer default during 2016 and there are no significant receivables which are past due at the reporting date.
Credit risk on derivative financial instruments is managed by restricting transactions only with counterparties who are at least Category Two members of the
LME, or which are assigned S&P equivalent of A-1 short term credit ratings by international credit rating agencies
157
80
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Liquidity risk management
Liquidity risk is the risk of encountering difficulty in meeting obligations associated with financial liabilities. OZ Minerals manages liquidity risk by conducting
regular reviews of the timing of cash outflows and the maturity profiles of term deposits in order to ensure sufficient funds are available to meet its
obligations.
The following table reflects all contractual repayments from recognised financial assets and liabilities at the reporting date, including derivative financial
instruments. For derivative financial instruments, the market value is presented, whereas for the other obligations the respective undiscounted cash flows for
the respective upcoming financial years are presented.
2016
Cash and cash equivalents
Trade Receivables
Other Receivables
Lease Receivable
Derivative Financial Assets
Trade Payables
Derivative Financial Liabilities
Total
2015
Cash and cash equivalents
Trade Receivables
Other Receivables
Lease Receivable
Derivative Financial Assets
Trade Payables
Derivative Financial Liabilities
Total
Less than
1 year
1 – 2 years
2 – 5 years
Greater than
5 years
655.7
69.4
7.8
27.5
–
(74.4)
(11.1)
674.9
552.5
91.4
7.2
34.8
–
(63.4)
–
622.5
–
–
–
–
0.6
–
–
0.6
–
–
–
–
–
–
–
–
–
–
–
–
4.5
–
–
4.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
655.7
69.4
7.8
27.5
5.1
(74.4)
(11.1)
680.0
552.5
91.4
7.2
34.8
–
(63.4)
–
622.5
The Consolidated Entity had access to the following borrowing facilities which were undrawn at the end of the year.
Expires on
Security
Revolving facility
November 2019
Unsecured
2016
A$m(a)
100.0
2015
US$m
200.0
(a)
The standby credit facility of US$200m was renegotiated to a three year committed facility of $A100m with an uncommitted accordion facility for an additional
$A300m which remains subject to financial institutions approval.
81
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
Contingencies
Contingencies
Contingencies
15 Contingencies
15 Contingencies
Contingencies
Contingencies
Bank guarantees
Bank guarantees
Bank guarantees
Contingencies
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
Contingencies
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
Bank guarantees
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
Bank guarantees
Bank guarantees
Bank guarantees
Bank guarantees
Bank guarantees
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
funds can be withdrawn as and when required.
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
Warranties and indemnities
Warranties and indemnities
Warranties and indemnities
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
Warranties and indemnities
Former Cambodian operations
Former Cambodian operations
Warranties and indemnities
Warranties and indemnities
Warranties and indemnities
Warranties and indemnities
Warranties and indemnities
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
Former Cambodian operations
Former Cambodian operations
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
Former Cambodian operations
Former Cambodian operations
Former Cambodian operations
Former Cambodian operations
Former Cambodian operations
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
Consolidated Entity’s financial position.
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
Consolidated Entity’s financial position.
Other
Other
Other
Other
Other
Other
Other
Other
Other
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
82
82
82
82
82
82
82
82
82
Finance
Notes to the Consolidated Financial Statements
Risk Management
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Risk Management
Risk Management
Notes to the Consolidated Financial Statements
Risk Management
Notes to the Consolidated Financial Statements
Risk Management
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Risk Management
Risk Management
Risk Management
Risk Management
Risk Management
Liquidity risk management
obligations.
Liquidity risk is the risk of encountering difficulty in meeting obligations associated with financial liabilities. OZ Minerals manages liquidity risk by conducting
regular reviews of the timing of cash outflows and the maturity profiles of term deposits in order to ensure sufficient funds are available to meet its
The following table reflects all contractual repayments from recognised financial assets and liabilities at the reporting date, including derivative financial
instruments. For derivative financial instruments, the market value is presented, whereas for the other obligations the respective undiscounted cash flows for
the respective upcoming financial years are presented.
Less than
1 year
1 – 2 years
2 – 5 years
Greater than
5 years
2016
Cash and cash equivalents
Trade Receivables
Other Receivables
Lease Receivable
Derivative Financial Assets
Trade Payables
Derivative Financial Liabilities
Total
2015
Cash and cash equivalents
Trade Receivables
Other Receivables
Lease Receivable
Derivative Financial Assets
Trade Payables
Derivative Financial Liabilities
Total
655.7
69.4
7.8
27.5
–
(74.4)
(11.1)
674.9
552.5
91.4
7.2
34.8
(63.4)
–
–
622.5
Total
655.7
69.4
7.8
27.5
5.1
(74.4)
(11.1)
680.0
552.5
91.4
7.2
34.8
(63.4)
–
–
622.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.5
4.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The Consolidated Entity had access to the following borrowing facilities which were undrawn at the end of the year.
Revolving facility
November 2019
Unsecured
Expires on
Security
2016
A$m(a)
100.0
2015
US$m
200.0
(a)
The standby credit facility of US$200m was renegotiated to a three year committed facility of $A100m with an uncommitted accordion facility for an additional
$A300m which remains subject to financial institutions approval.
0.6
0.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
81
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
Contingencies
Contingencies
Contingencies
15 Contingencies
15 Contingencies
15 Contingencies
Contingencies
Contingencies
Contingencies
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
Contingencies
Contingencies
Contingencies
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. Determination of contingent liabilities
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
disclosed in the Financial Statements requires the exercise of significant judgement regarding the outcome of future events. In the event of an unfavourable
Bank guarantees
Bank guarantees
Bank guarantees
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
Bank guarantees
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
outcome of a number of matters listed below the financial results of OZ Minerals in future periods may be impacted unfavourably.
Bank guarantees
Bank guarantees
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
Bank guarantees
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
Bank guarantees
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
Bank guarantees
Bank guarantees
Bank guarantees
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
OZ Minerals Group Treasury Pty Ltd has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases, exploration
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
funds can be withdrawn as and when required.
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
requirements of the recipient. These guarantees are backed by deposits which amounted to $34.6 million as at 31 December 2016 (31 December 2015:
funds can be withdrawn as and when required.
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
funds can be withdrawn as and when required.
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
$34.8 million). Presently, all guarantees are voluntarily cash backed by deposits in order to reduce the bank fees payable, however, should the need arise all
Deeds of indemnity
funds can be withdrawn as and when required.
Deeds of indemnity
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
funds can be withdrawn as and when required.
Deeds of indemnity
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Deeds of indemnity
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Deeds of indemnity
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Deeds of indemnity
Deeds of indemnity
Deeds of indemnity
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
The Consolidated Entity has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive Directors, former officers, the
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
General Counsel – Special Projects, the former Group Treasurer and each employee who was a director or officer of a controlled entity of the Consolidated
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution.
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
Each Deed of Indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. Under these
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
Warranties and indemnities
Warranties and indemnities
Warranties and indemnities
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
indemnities, the Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may advance funds to meet
Warranties and indemnities
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
Warranties and indemnities
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
defence costs in litigation, to the extent permitted by the Corporations Act 2001(Cth).
Warranties and indemnities
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
Warranties and indemnities
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
Warranties and indemnities
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
Warranties and indemnities
Warranties and indemnities
Warranties and indemnities
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
The Company has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
Former Cambodian operations
Former Cambodian operations
Former Cambodian operations
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
relation to various matters including the sale of assets, taxes and information. Indemnities have also been given by the Consolidated Entity in relation to
Former Cambodian operations
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
Former Cambodian operations
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
matters including compliance with law, environmental claims, a failure to transfer or deliver all assets and payment of taxes.
Former Cambodian operations
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
Former Cambodian operations
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
Former Cambodian operations
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
Former Cambodian operations
Former Cambodian operations
Former Cambodian operations
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
The Australian Federal Police (AFP) advised OZ Minerals in September 2014 that it was conducting an investigation of OZ Minerals’ 2009 acquisition of the
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
remaining equity holding in the Okvau exploration joint venture in Cambodia in relation to foreign bribery claims. Since that time, the Company has been
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
advised by the AFP that the scope of the AFP’s investigation has been extended to OZ Minerals’ former Cambodian operations generally. The AFP is
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
Other
Other
Other
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
continuing its investigation and OZ Minerals is continuing to cooperate with the AFP. OZ Minerals has concluded that it is not probable that a present
Other
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
Other
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
obligation exists and accordingly, no provision has been recognised in the balance sheet at 31 December 2016.
Other
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
Other
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
Other
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
Other
Other
Other
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
Consolidated Entity’s financial position.
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
Consolidated Entity’s financial position.
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their
Consolidated Entity’s financial position.
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
Consolidated Entity’s financial position.
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Company’s or the
Consolidated Entity’s financial position.
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
Consolidated Entity’s financial position.
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
16 Litigation settlement expense
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
16 Litigation settlement expense
16 Litigation settlement expense
16 Litigation settlement expense
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
OZ Minerals reached an agreement in June 2016 to settle the class action proceedings filed by former Zinifex shareholders who held Zinifex shares on 1 July
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
2008 and received shares in OZ Minerals following the merger between Oxiana and Zinifex on 1 July 2008, for an amount of $32.5 million. Other parties to
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
the proceedings contributed $8.5 million. OZ Minerals incurred legal defence costs of $13.9 million during the year which together with OZ Minerals’ net
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
contribution to the settlement of $24.0 million resulted in a total expense of $37.9 million (after tax $26.5 million).
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
As a result of the agreement, the class action against OZ Minerals was dismissed without admission of liability by the Company.
82
82
82
82
82
82
82
82
82
82
82
159
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
17 Parent entity disclosures
17 Parent entity disclosures
17 Parent entity disclosures
17 Parent entity disclosures
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
Results of the parent entity
Results of the parent entity
Results of the parent entity
Results of the parent entity
Write-up of investment in subsidiary
Write-up of investment in subsidiary
Write-up of investment in subsidiary
Write-up of investment in subsidiary
Provision for non-recovery of loan to subsidiary
Provision for non-recovery of loan to subsidiary
Provision for non-recovery of loan to subsidiary
Provision for non-recovery of loan to subsidiary
Net other expense
Net other expense
Net other expense
Net other expense
Net profit/(loss) for the year
Net profit/(loss) for the year
Net profit/(loss) for the year
Net profit/(loss) for the year
Other comprehensive loss
Other comprehensive loss
Other comprehensive loss
Other comprehensive loss
Total comprehensive income/(loss)
Total comprehensive income/(loss)
Total comprehensive income/(loss)
Total comprehensive income/(loss)
Financial position of the parent entity
Financial position of the parent entity
Financial position of the parent entity
Financial position of the parent entity
Assets
Assets
Assets
Assets
Current assets
Current assets
Current assets
Current assets
Non-current assets
Non-current assets
Non-current assets
Non-current assets
Total assets
Total assets
Total assets
Total assets
Liabilities
Liabilities
Liabilities
Liabilities
Current liabilities
Current liabilities
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Non-current liabilities
Non-current liabilities
Total liabilities
Total liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Net assets
Net assets
Equity
Equity
Equity
Equity
Issued capital
Issued capital
Issued capital
Issued capital
Treasury shares
Treasury shares
Treasury shares
Treasury shares
Retained earnings
Retained earnings
Retained earnings
Retained earnings
Accumulated losses
Accumulated losses
Accumulated losses
Accumulated losses
Total equity
Total equity
Total equity
Total equity
2016
2016
2016
2016
$m
$m
$m
$m
2015
2015
2015
2015
$m
$m
$m
$m
–
–
–
–
(1.0)
(1.0)
(1.0)
(1.0)
(29.0)
(29.0)
(29.0)
(29.0)
(30.0)
(30.0)
(30.0)
(30.0)
(12.2)
(12.2)
(12.2)
(12.2)
(42.2)
(42.2)
(42.2)
(42.2)
2.7
2.7
2.7
2.7
2,160.5
2,160.5
2,160.5
2,160.5
2,163.2
2,163.2
2,163.2
2,163.2
79.6
79.6
79.6
79.6
0.4
0.4
0.4
0.4
80.0
80.0
80.0
80.0
95.7
95.7
95.7
95.7
(39.4)
(39.4)
(39.4)
(39.4)
(29.9)
(29.9)
(29.9)
(29.9)
26.4
26.4
26.4
26.4
(4.9)
(4.9)
(4.9)
(4.9)
21.5
21.5
21.5
21.5
2.4
2.4
2.4
2.4
2,224.9
2,224.9
2,224.9
2,224.9
2,227.3
2,227.3
2,227.3
2,227.3
10.3
10.3
10.3
10.3
0.9
0.9
0.9
0.9
11.2
11.2
11.2
11.2
2,083.2
2,083.2
2,083.2
2,083.2
2,216.1
2,216.1
2,216.1
2,216.1
2,029.0
2,029.0
2,029.0
2,029.0
2,058.9
2,058.9
2,058.9
2,058.9
(2.1)
(2.1)
(2.1)
(2.1)
304.8
304.8
304.8
304.8
(248.5)
(248.5)
(248.5)
(248.5)
2,083.2
2,083.2
2,083.2
2,083.2
(0.6)
(0.6)
(0.6)
(0.6)
365.4
365.4
365.4
365.4
(207.6)
(207.6)
(207.6)
(207.6)
2,216.1
2,216.1
2,216.1
2,216.1
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
December 2016 was nil (2015: nil).
December 2016 was nil (2015: nil).
December 2016 was nil (2015: nil).
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
December 2016 was nil (2015: nil).
83
83
83
83
84
84
84
84
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Franking account details
Franking account details
Franking account details
Franking account details
Franking account balance at beginning of year
Franking account balance at beginning of year
Franking account balance at beginning of year
Franking credits from income tax paid during the year
Franking account balance at beginning of year
Franking credits from income tax paid during the year
Franking credits from income tax paid during the year
Franking debits from income tax refund received during the year
Franking credits from income tax paid during the year
Franking debits from income tax refund received during the year
Franking debits from income tax refund received during the year
Franking account balance at end of year
Franking debits from income tax refund received during the year
Franking account balance at end of year
Franking account balance at end of year
Franking account balance at end of year
Basis of consolidation
Basis of consolidation
Basis of consolidation
Basis of consolidation
Investments in subsidiaries
Investments in subsidiaries
Investments in subsidiaries
on consolidation.
on consolidation.
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Entity
Entity
Entity
Minotaur Resources Holdings Pty Ltd
Minotaur Resources Holdings Pty Ltd
Minotaur Resources Holdings Pty Ltd
OZ Exploration Pty Ltd
Minotaur Resources Holdings Pty Ltd
OZ Exploration Pty Ltd
OZ Exploration Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Exploration Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Holdings Limited
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Holdings Limited
OZ Minerals Holdings Limited
OZ Minerals Insurance Pte Ltd
OZ Minerals Holdings Limited
OZ Minerals Insurance Pte Ltd
OZ Minerals Insurance Pte Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Insurance Pte Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Investments Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Jamaica Limited
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZ Minerals Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZ Exploration Chile Limitada
OZM Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZM Carrapateena Pty Ltd
OZM Carrapateena Pty Ltd
OZ Exploration (USA) LLC
OZM Carrapateena Pty Ltd
OZ Exploration (USA) LLC
OZ Exploration (USA) LLC
ZRUS Holdings Pty Ltd
OZ Exploration (USA) LLC
ZRUS Holdings Pty Ltd
ZRUS Holdings Pty Ltd
ZRUS Holdings Pty Ltd
Investments in subsidiaries
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
Consolidated Entity’s voting and potential voting rights.
Consolidated Entity’s voting and potential voting rights.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
Consolidated Entity’s voting and potential voting rights.
Consolidated Entity’s voting and potential voting rights.
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
on consolidation.
on consolidation.
The wholly owned controlled entities of OZ Minerals Limited are listed below:
The wholly owned controlled entities of OZ Minerals Limited are listed below:
The wholly owned controlled entities of OZ Minerals Limited are listed below:
The wholly owned controlled entities of OZ Minerals Limited are listed below:
Entity
2016
2016
$m
2016
$m
2016
$m
0.9
$m
0.9
0.9
–
0.9
–
–
–
–
–
–
0.9
–
0.9
0.9
0.9
2015
2015
$m
2015
$m
2015
$m
0.9
$m
0.9
0.9
–
0.9
–
–
–
–
–
–
0.9
–
0.9
0.9
0.9
Country of
Country of
incorporation
Country of
incorporation
Country of
incorporation
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Singapore
Singapore
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Jamaica
Australia
Jamaica
Jamaica
Australia
Jamaica
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Chile
Australia
Chile
Australia
Chile
Chile
Australia
Australia
USA
Australia
USA
Australia
USA
USA
Australia
Australia
Australia
Finance
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Franking account details
Franking account details
Franking account details
Franking account details
2016
2016
$m
2016
$m
2016
$m
0.9
$m
0.9
0.9
–
0.9
–
–
–
–
–
–
0.9
–
0.9
0.9
0.9
2015
2015
$m
2015
$m
2015
$m
0.9
$m
0.9
0.9
–
0.9
–
–
–
–
–
–
0.9
–
0.9
0.9
0.9
Franking account balance at beginning of year
Franking account balance at beginning of year
Franking account balance at beginning of year
Franking credits from income tax paid during the year
Franking account balance at beginning of year
Franking credits from income tax paid during the year
Franking credits from income tax paid during the year
Franking debits from income tax refund received during the year
Franking credits from income tax paid during the year
Franking debits from income tax refund received during the year
Franking debits from income tax refund received during the year
Franking account balance at end of year
Franking debits from income tax refund received during the year
Franking account balance at end of year
Franking account balance at end of year
Franking account balance at end of year
Basis of consolidation
Basis of consolidation
Basis of consolidation
Basis of consolidation
Investments in subsidiaries
Investments in subsidiaries
Investments in subsidiaries
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
Investments in subsidiaries
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists.
Consolidated Entity’s voting and potential voting rights.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
Consolidated Entity’s voting and potential voting rights.
Factors considered include rights arising from other contractual arrangements, any contractual arrangements with other vote holders as well as the
Consolidated Entity’s voting and potential voting rights.
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
Consolidated Entity’s voting and potential voting rights.
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
The Consolidated Entity reassesses whether it controls an entity if facts and circumstances indicate that there has been a change in one of the factors which
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
on consolidation.
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
on consolidation.
Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated
on consolidation.
on consolidation.
Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
The wholly owned controlled entities of OZ Minerals Limited are listed below:
The wholly owned controlled entities of OZ Minerals Limited are listed below:
The wholly owned controlled entities of OZ Minerals Limited are listed below:
The wholly owned controlled entities of OZ Minerals Limited are listed below:
Entity
Entity
Entity
Entity
Minotaur Resources Holdings Pty Ltd
Minotaur Resources Holdings Pty Ltd
Minotaur Resources Holdings Pty Ltd
OZ Exploration Pty Ltd
Minotaur Resources Holdings Pty Ltd
OZ Exploration Pty Ltd
OZ Exploration Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Exploration Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Equity Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Holdings Limited
OZ Minerals Group Treasury Pty Ltd
OZ Minerals Holdings Limited
OZ Minerals Holdings Limited
OZ Minerals Insurance Pte Ltd
OZ Minerals Holdings Limited
OZ Minerals Insurance Pte Ltd
OZ Minerals Insurance Pte Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Insurance Pte Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals International (Holdings) Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals Investments Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Investments Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Jamaica Limited
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Jamaica Limited
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Prominent Hill Operations Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Prominent Hill Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Minerals Zinifex Holdings Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Minerals Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZ Minerals Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZ Exploration Chile Limitada
OZM Carrapateena Pty Ltd
OZ Exploration Chile Limitada
OZM Carrapateena Pty Ltd
OZM Carrapateena Pty Ltd
OZ Exploration (USA) LLC
OZM Carrapateena Pty Ltd
OZ Exploration (USA) LLC
OZ Exploration (USA) LLC
ZRUS Holdings Pty Ltd
OZ Exploration (USA) LLC
ZRUS Holdings Pty Ltd
ZRUS Holdings Pty Ltd
ZRUS Holdings Pty Ltd
Country of
Country of
incorporation
Country of
incorporation
Country of
incorporation
Australia
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Singapore
Singapore
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Jamaica
Australia
Jamaica
Jamaica
Australia
Jamaica
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Chile
Australia
Chile
Chile
Australia
Chile
Australia
Australia
USA
Australia
USA
USA
Australia
USA
Australia
Australia
Australia
17 Parent entity disclosures
17 Parent entity disclosures
17 Parent entity disclosures
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
As at, and throughout the financial year ended 31 December 2016, the parent entity of the Consolidated Entity was OZ Minerals Limited.
2016
2016
2016
$m
$m
$m
2015
2015
2015
$m
$m
$m
Results of the parent entity
Results of the parent entity
Results of the parent entity
Write-up of investment in subsidiary
Write-up of investment in subsidiary
Write-up of investment in subsidiary
Provision for non-recovery of loan to subsidiary
Provision for non-recovery of loan to subsidiary
Provision for non-recovery of loan to subsidiary
Net other expense
Net other expense
Net other expense
Net profit/(loss) for the year
Net profit/(loss) for the year
Net profit/(loss) for the year
Other comprehensive loss
Other comprehensive loss
Other comprehensive loss
Total comprehensive income/(loss)
Total comprehensive income/(loss)
Total comprehensive income/(loss)
Financial position of the parent entity
Financial position of the parent entity
Financial position of the parent entity
Assets
Assets
Assets
Current assets
Current assets
Current assets
Non-current assets
Non-current assets
Non-current assets
Total assets
Total assets
Total assets
Liabilities
Liabilities
Liabilities
Current liabilities
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Non-current liabilities
Total liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Net assets
Equity
Equity
Equity
Issued capital
Issued capital
Issued capital
Treasury shares
Treasury shares
Treasury shares
Retained earnings
Retained earnings
Retained earnings
Accumulated losses
Accumulated losses
Accumulated losses
Total equity
Total equity
Total equity
–
–
–
(1.0)
(1.0)
(1.0)
(29.0)
(29.0)
(29.0)
(30.0)
(30.0)
(30.0)
(12.2)
(12.2)
(12.2)
(42.2)
(42.2)
(42.2)
2.7
2.7
2.7
2,160.5
2,160.5
2,160.5
2,163.2
2,163.2
2,163.2
79.6
79.6
79.6
0.4
0.4
0.4
80.0
80.0
80.0
(2.1)
(2.1)
(2.1)
304.8
304.8
304.8
(248.5)
(248.5)
(248.5)
2,083.2
2,083.2
2,083.2
95.7
95.7
95.7
(39.4)
(39.4)
(39.4)
(29.9)
(29.9)
(29.9)
26.4
26.4
26.4
(4.9)
(4.9)
(4.9)
21.5
21.5
21.5
2.4
2.4
2.4
2,224.9
2,224.9
2,224.9
2,227.3
2,227.3
2,227.3
10.3
10.3
10.3
0.9
0.9
0.9
11.2
11.2
11.2
(0.6)
(0.6)
(0.6)
365.4
365.4
365.4
(207.6)
(207.6)
(207.6)
2,216.1
2,216.1
2,216.1
2,083.2
2,083.2
2,083.2
2,216.1
2,216.1
2,216.1
2,029.0
2,029.0
2,029.0
2,058.9
2,058.9
2,058.9
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
OZ Minerals Limited is able to manage its net current liability position, by its ability to control the timing of dividends from its subsidiaries.
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31
December 2016 was nil (2015: nil).
December 2016 was nil (2015: nil).
December 2016 was nil (2015: nil).
83
83
83
84
84
84
84
161
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
18 Deed of cross guarantee
18 Deed of cross guarantee
18 Deed of cross guarantee
The Company and all its Australian domiciled subsidiaries listed in Note 17 to the Consolidated Financial Statements, except for OZ Minerals Equity Pty Ltd,
The Company and all its Australian domiciled subsidiaries listed in Note 17 to the Consolidated Financial Statements, except for OZ Minerals Equity Pty Ltd,
The Company and all its Australian domiciled subsidiaries listed in Note 17 to the Consolidated Financial Statements, except for OZ Minerals Equity Pty Ltd,
OZ Minerals International (Holdings) Pty Ltd, and ZRUS Holdings Pty Ltd are party to a Deed of Cross Guarantee (‘Deed’).
OZ Minerals International (Holdings) Pty Ltd, and ZRUS Holdings Pty Ltd are party to a Deed of Cross Guarantee (‘Deed’).
OZ Minerals International (Holdings) Pty Ltd, and ZRUS Holdings Pty Ltd are party to a Deed of Cross Guarantee (‘Deed’).
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under
certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that
certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that
certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that
after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
Set out below is the Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet of the entities within the Deed.
Set out below is the Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet of the entities within the Deed.
Set out below is the Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet of the entities within the Deed.
Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income
of the entities within the Deed of Cross Guarantee
of the entities within the Deed of Cross Guarantee
Consolidated Statement of Comprehensive Income
of the entities within the Deed of Cross Guarantee
Revenue from sale of concentrates
Revenue from sale of concentrates
Revenue from sale of concentrates
Other income
Other income
Other income
Net foreign exchange gains
Net foreign exchange gains
Net foreign exchange gains
Changes in inventories of ore and concentrate
Changes in inventories of ore and concentrate
Changes in inventories of ore and concentrate
2016
2016
2016
$m
$m
$m
822.9
822.9
822.9
6.3
6.3
6.3
2.6
2.6
2.6
227.8
227.8
227.8
2015
2015
2015
$m
$m
$m
879.4
879.4
879.4
5.4
5.4
5.4
32.4
32.4
32.4
79.8
79.8
79.8
Consumables, concentrate purchases and other direct costs
Consumables, concentrate purchases and other direct costs
Consumables, concentrate purchases and other direct costs
(313.7)
(313.7)
(313.7)
(259.0)
(259.0)
(259.0)
Employee benefit expenses
Employee benefit expenses
Employee benefit expenses
Exploration and evaluation expenses
Exploration and evaluation expenses
Exploration and evaluation expenses
Freight expenses
Freight expenses
Freight expenses
Royalties expense
Royalties expense
Royalties expense
Depreciation expense
Depreciation expense
Depreciation expense
Restructuring expense – employee benefits
Restructuring expense – employee benefits
Restructuring expense – employee benefits
Legal costs associated with Class Action
Legal costs associated with Class Action
Legal costs associated with Class Action
Other expenses
Other expenses
Other expenses
Profit before net financing income and income tax from continuing operations
Profit before net financing income and income tax from continuing operations
Profit before net financing income and income tax from continuing operations
Financing income
Financing income
Financing income
Financing expenses
Financing expenses
Financing expenses
Net financing income
Net financing income
Net financing income
Profit before income tax from continuing operations
Profit before income tax from continuing operations
Profit before income tax from continuing operations
Income tax expense from continuing operations
Income tax expense from continuing operations
Income tax expense from continuing operations
Profit for the year
Profit for the year
Profit for the year
Other comprehensive loss
Other comprehensive loss
Other comprehensive loss
Total comprehensive profit/(loss) for the year
Total comprehensive profit/(loss) for the year
Total comprehensive profit/(loss) for the year
(60.4)
(60.4)
(60.4)
(25.1)
(25.1)
(25.1)
(52.9)
(52.9)
(52.9)
(42.2)
(42.2)
(42.2)
(63.9)
(63.9)
(63.9)
(32.2)
(32.2)
(32.2)
(54.1)
(54.1)
(54.1)
(47.9)
(47.9)
(47.9)
(361.5)
(361.5)
(361.5)
(285.1)
(285.1)
(285.1)
–
–
–
(37.9)
(37.9)
(37.9)
(34.9)
(34.9)
(34.9)
131.0
131.0
131.0
13.8
13.8
13.8
(4.8)
(4.8)
(4.8)
9.0
9.0
9.0
140.0
140.0
140.0
(28.4)
(28.4)
(28.4)
111.6
111.6
111.6
(6.7)
(6.7)
(6.7)
104.9
104.9
104.9
(7.6)
(7.6)
(7.6)
(13.4)
(13.4)
(13.4)
(50.1)
(50.1)
(50.1)
183.7
183.7
183.7
7.5
7.5
7.5
(4.7)
(4.7)
(4.7)
2.8
2.8
2.8
186.5
186.5
186.5
(59.5)
(59.5)
(59.5)
127.0
127.0
127.0
(18.5)
(18.5)
(18.5)
108.5
108.5
108.5
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Consolidated Balance Sheet of the entities within the
Investment in subsidiaries which are not party to the Deed
Deed of Cross Guarantee
Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Prepayments
Assets held for sale
Total current assets
Non-current assets
Inventories
Investments in equity securities
Derivative financial instruments
Exploration assets - Carrapateena
Lease receivable
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade payables and accruals
Other payables
Current tax liabilities
Employee benefits
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Treasury shares
Total equity
85
85
85
86
1,689.3
2,624.7
2016
$m
648.0
69.4
6.6
197.1
4.9
9.4
935.4
360.0
18.2
5.1
284.9
27.5
990.6
3.0
72.6
3.0
69.0
9.0
8.3
11.1
173.0
63.5
2.0
36.0
101.5
274.5
3.6
319.7
(2.1)
2015
$m
545.2
91.4
6.3
143.2
4.9
–
791.0
186.6
31.8
–
252.2
34.8
1,261.8
3.0
1,770.2
2,561.2
62.2
1.7
–
9.2
8.6
–
81.7
102.6
3.6
33.4
139.6
221.3
–
281.6
(0.6)
2,350.2
2,339.9
2,029.0
2,058.9
2,350.2
2,339.9
Finance
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Notes to the Consolidated Financial Statements
Group Structure & Other Information
18 Deed of cross guarantee
Consolidated Balance Sheet of the entities within the
Deed of Cross Guarantee
The Company and all its Australian domiciled subsidiaries listed in Note 17 to the Consolidated Financial Statements, except for OZ Minerals Equity Pty Ltd,
OZ Minerals International (Holdings) Pty Ltd, and ZRUS Holdings Pty Ltd are party to a Deed of Cross Guarantee (‘Deed’).
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under
certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that
after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
Set out below is the Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet of the entities within the Deed.
Consolidated Statement of Comprehensive Income
of the entities within the Deed of Cross Guarantee
Revenue from sale of concentrates
Other income
Net foreign exchange gains
Changes in inventories of ore and concentrate
Consumables, concentrate purchases and other direct costs
Employee benefit expenses
Exploration and evaluation expenses
Freight expenses
Royalties expense
Depreciation expense
Restructuring expense – employee benefits
Legal costs associated with Class Action
Other expenses
Financing income
Financing expenses
Net financing income
Profit before income tax from continuing operations
Income tax expense from continuing operations
Profit for the year
Other comprehensive loss
Total comprehensive profit/(loss) for the year
Profit before net financing income and income tax from continuing operations
(361.5)
(285.1)
2016
$m
822.9
6.3
2.6
227.8
(313.7)
(60.4)
(25.1)
(52.9)
(42.2)
–
(37.9)
(34.9)
131.0
13.8
(4.8)
9.0
140.0
(28.4)
111.6
(6.7)
104.9
2015
$m
879.4
5.4
32.4
79.8
(259.0)
(63.9)
(32.2)
(54.1)
(47.9)
(7.6)
(13.4)
(50.1)
183.7
7.5
(4.7)
2.8
186.5
(59.5)
127.0
(18.5)
108.5
Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Inventories
Prepayments
Assets held for sale
Total current assets
Non-current assets
Inventories
Investments in equity securities
Derivative financial instruments
Exploration assets - Carrapateena
Lease receivable
Property, plant and equipment
Investment in subsidiaries which are not party to the Deed
Total non-current assets
Total assets
Current liabilities
Trade payables and accruals
Other payables
Current tax liabilities
Employee benefits
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Cash flow hedge reserve
Retained earnings
Treasury shares
Total equity
85
86
2016
$m
648.0
69.4
6.6
197.1
4.9
9.4
935.4
360.0
18.2
5.1
284.9
27.5
990.6
3.0
1,689.3
2,624.7
72.6
3.0
69.0
9.0
8.3
11.1
173.0
63.5
2.0
36.0
101.5
274.5
2015
$m
545.2
91.4
6.3
143.2
4.9
–
791.0
186.6
31.8
–
252.2
34.8
1,261.8
3.0
1,770.2
2,561.2
62.2
1.7
–
9.2
8.6
–
81.7
102.6
3.6
33.4
139.6
221.3
2,350.2
2,339.9
2,029.0
2,058.9
3.6
319.7
(2.1)
–
281.6
(0.6)
2,350.2
2,339.9
163
Annual and Sustainability Report 2016
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
19 Key management personnel
19 Key management personnel
19 Key management personnel
Key management personnel remuneration
Key management personnel remuneration
Key management personnel remuneration
Key management personnel (‘KMP’) are accountable for planning, directing and controlling the affairs of the Company and its controlled entities. During the
Key management personnel (‘KMP’) are accountable for planning, directing and controlling the affairs of the Company and its controlled entities. During the
financial year, the number of KMP increased by two to four members. The KMP remuneration for the Consolidated Entity was as follows:
financial year, the number of KMP increased by two to four members. The KMP remuneration for the Consolidated Entity was as follows:
Key management personnel (‘KMP’) are accountable for planning, directing and controlling the affairs of the Company and its controlled entities. During the
financial year, the number of KMP increased by two to four members. The KMP remuneration for the Consolidated Entity was as follows:
Audit services provided by KPMG
Audit services provided by KPMG
Audit services provided by KPMG
Audit services provided by KPMG
Short-term employee benefits
Short-term employee benefits
Short-term employee benefits
Other long term benefits
Other long term benefits
Other long term benefits
Post-employment benefits
Post-employment benefits
Post-employment benefits
Termination benefits
Termination benefits
Termination benefits
Share-based payments
Share-based payments
Share-based payments
Total
Total
Total
2016
2016
2016
$
$
$
2015
2015
2015
$
$
$
4,737,886
4,737,886
4,737,886
3,547,871
3,547,871
3,547,871
22,540
22,540
22,540
(110,856)
(110,856)
(110,856)
168,272
168,272
168,272
147,428
147,428
147,428
–
–
–
562,320
562,320
562,320
480,542
480,542
480,542
286,135
286,135
286,135
5,409,240
5,409,240
5,409,240
4,432,898
4,432,898
4,432,898
Information regarding individual directors’ and executives’ compensation and some equity instrument disclosures as required by Corporations Regulation
Information regarding individual directors’ and executives’ compensation and some equity instrument disclosures as required by Corporations Regulation
2M.3.03 is provided in the Remuneration Report.
2M.3.03 is provided in the Remuneration Report.
Information regarding individual directors’ and executives’ compensation and some equity instrument disclosures as required by Corporations Regulation
2M.3.03 is provided in the Remuneration Report.
Recognition and measurement of wages and salaries and short term employee benefits
Recognition and measurement of wages and salaries and short term employee benefits
Recognition and measurement of wages and salaries and short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of the reporting date are
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of the reporting date are
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of the reporting date are
recognised in the provision for employee benefits in respect of employees’ services up to the reporting date and are measured at the amounts expected to be
recognised in the provision for employee benefits in respect of employees’ services up to the reporting date and are measured at the amounts expected to be
recognised in the provision for employee benefits in respect of employees’ services up to the reporting date and are measured at the amounts expected to be
paid, inclusive of on costs, when the liabilities are settled.
paid, inclusive of on costs, when the liabilities are settled.
paid, inclusive of on costs, when the liabilities are settled.
Recognition and measurement of other long term employee benefits
Recognition and measurement of other long term employee benefits
Recognition and measurement of other long term employee benefits
Long term employee benefits include annual leave liabilities which are expected to be settled in the period greater than twelve months from balance date and
Long term employee benefits include annual leave liabilities which are expected to be settled in the period greater than twelve months from balance date and
Long term employee benefits include annual leave liabilities which are expected to be settled in the period greater than twelve months from balance date and
long service leave liabilities. Other long term benefits are recognised in the provision for employee benefits and measured as the present value of expected
long service leave liabilities. Other long term benefits are recognised in the provision for employee benefits and measured as the present value of expected
long service leave liabilities. Other long term benefits are recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated
using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated
using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
future cash outflows.
future cash outflows.
Transactions with related parties
Transactions with related parties
Transactions with related parties
A number of KMP, or their related parties, hold positions in other entities that may result in them having control or significant influence over the financial or
A number of KMP, or their related parties, hold positions in other entities that may result in them having control or significant influence over the financial or
operating policies of those entities. Where the Consolidated Entity transacts with the KMP and their related parties, the terms and conditions of these
operating policies of those entities. Where the Consolidated Entity transacts with the KMP and their related parties, the terms and conditions of these
transactions are no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related
transactions are no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related
entities on an arm’s length basis.
entities on an arm’s length basis.
A number of KMP, or their related parties, hold positions in other entities that may result in them having control or significant influence over the financial or
operating policies of those entities. Where the Consolidated Entity transacts with the KMP and their related parties, the terms and conditions of these
transactions are no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related
entities on an arm’s length basis.
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
20 Remuneration of auditors
20 Remuneration of auditors
20 Remuneration of auditors
20 Remuneration of auditors
KPMG Australia
KPMG Australia
KPMG Australia
KPMG Australia
Overseas KPMG firms
Overseas KPMG firms
Overseas KPMG firms
Overseas KPMG firms
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Other services
Other services
Other services
Other services
Total fees
Total fees
Total fees
Total fees
21 New accounting standards
21 New accounting standards
21 New accounting standards
21 New accounting standards
2016
2016
2016
2016
$
$
$
$
2015
2015
2015
2015
$
$
$
$
439,722
439,722
439,722
439,722
532,000
532,000
532,000
532,000
34,990
34,990
34,990
34,990
33,343
33,343
33,343
33,343
474,712
474,712
474,712
474,712
565,343
565,343
565,343
565,343
160,124
160,124
160,124
160,124
77,025
77,025
77,025
77,025
165,882
165,882
165,882
165,882
120,000
120,000
120,000
120,000
237,149
237,149
237,149
237,149
285,882
285,882
285,882
285,882
711,861
711,861
711,861
711,861
851,225
851,225
851,225
851,225
(i)
(i)
(i)
(i)
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
amounts reported during the year.
amounts reported during the year.
amounts reported during the year.
amounts reported during the year.
(ii) Early adoption of Standards
(ii) Early adoption of Standards
(ii) Early adoption of Standards
(ii) Early adoption of Standards
objectives.
objectives.
objectives.
objectives.
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
87
87
87
88
88
88
88
Finance
Short-term employee benefits
Other long term benefits
Post-employment benefits
Termination benefits
Share-based payments
Total
2016
$
2015
$
4,737,886
3,547,871
22,540
(110,856)
168,272
147,428
–
480,542
562,320
286,135
5,409,240
4,432,898
Recognition and measurement of wages and salaries and short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of the reporting date are
recognised in the provision for employee benefits in respect of employees’ services up to the reporting date and are measured at the amounts expected to be
paid, inclusive of on costs, when the liabilities are settled.
Recognition and measurement of other long term employee benefits
Long term employee benefits include annual leave liabilities which are expected to be settled in the period greater than twelve months from balance date and
long service leave liabilities. Other long term benefits are recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Transactions with related parties
A number of KMP, or their related parties, hold positions in other entities that may result in them having control or significant influence over the financial or
operating policies of those entities. Where the Consolidated Entity transacts with the KMP and their related parties, the terms and conditions of these
transactions are no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related
entities on an arm’s length basis.
87
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
Group Structure & Other Information
19 Key management personnel
Key management personnel remuneration
20 Remuneration of auditors
20 Remuneration of auditors
20 Remuneration of auditors
20 Remuneration of auditors
20 Remuneration of auditors
20 Remuneration of auditors
Key management personnel (‘KMP’) are accountable for planning, directing and controlling the affairs of the Company and its controlled entities. During the
Audit services provided by KPMG
Audit services provided by KPMG
Audit services provided by KPMG
Audit services provided by KPMG
Audit services provided by KPMG
Audit services provided by KPMG
financial year, the number of KMP increased by two to four members. The KMP remuneration for the Consolidated Entity was as follows:
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
Audit and review of Financial Reports and other audit work under the Corporations Act 2001, including
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
audit of subsidiary Financial Statements
Information regarding individual directors’ and executives’ compensation and some equity instrument disclosures as required by Corporations Regulation
Total fees
Total fees
Total fees
Total fees
Total fees
Total fees
2M.3.03 is provided in the Remuneration Report.
KPMG Australia
KPMG Australia
KPMG Australia
KPMG Australia
KPMG Australia
KPMG Australia
Overseas KPMG firms
Overseas KPMG firms
Overseas KPMG firms
Overseas KPMG firms
Overseas KPMG firms
Overseas KPMG firms
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Total fees for audit services provided by KPMG
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Other services provided by KPMG Australia
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Taxation compliance and other taxation advisory services
Other services
Other services
Other services
Other services
Other services
Other services
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
Total fees for other services provided by KPMG Australia
2016
2016
2016
2016
2016
2016
$
$
$
$
$
$
2015
2015
2015
2015
2015
2015
$
$
$
$
$
$
439,722
439,722
439,722
439,722
439,722
439,722
532,000
532,000
532,000
532,000
532,000
532,000
34,990
34,990
34,990
34,990
34,990
34,990
33,343
33,343
33,343
33,343
33,343
33,343
474,712
474,712
474,712
474,712
474,712
474,712
565,343
565,343
565,343
565,343
565,343
565,343
160,124
160,124
160,124
160,124
160,124
160,124
165,882
165,882
165,882
165,882
165,882
165,882
77,025
77,025
77,025
77,025
77,025
77,025
120,000
120,000
120,000
120,000
120,000
120,000
237,149
237,149
237,149
237,149
237,149
237,149
285,882
285,882
285,882
285,882
285,882
285,882
711,861
711,861
711,861
711,861
711,861
711,861
851,225
851,225
851,225
851,225
851,225
851,225
21 New accounting standards
21 New accounting standards
21 New accounting standards
21 New accounting standards
21 New accounting standards
21 New accounting standards
Directors’ Report
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
Changes in accounting policies and mandatory standards adopted during the year
(i)
(i)
(i)
(i)
(i)
(i)
Directors’ Report
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
Entity in its Annual Report for the year ended 31 December 2015, except for the early adoption of AASB 9 (2014) Financial Instruments with an initial
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
application date of 1 January 2016. The Consolidated Entity has adopted all of the new, revised or amending standards that are mandatory. The adoption of
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
these new and revised mandatory Australian Accounting Standards has not had a significant impact on the Consolidated Entity’s accounting policies or the
amounts reported during the year.
amounts reported during the year.
amounts reported during the year.
amounts reported during the year.
amounts reported during the year.
amounts reported during the year.
(ii) Early adoption of Standards
(ii) Early adoption of Standards
(ii) Early adoption of Standards
(ii) Early adoption of Standards
(ii) Early adoption of Standards
(ii) Early adoption of Standards
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
The Consolidated Entity early adopted AASB 9 (2009) Financial Instruments issued in December 2009 in the year ended 31 December 2010. AASB 9 (2009)
Operational and Financial Review
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
replaced the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement of financial assets.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
the adoption of AASB 9 (2014) as at 1 January 2016.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
The Consolidated Entity has early adopted AASB 9 (2014) Financial Instruments issued in July 2014 with an initial application date of 1 January 2016. AASB 9
Operational and Financial Review
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
(2014) introduced a new hedge accounting model to simplify hedge accounting outcomes and more closely align hedge accounting with risk management
positioned for growth.
objectives.
objectives.
objectives.
objectives.
objectives.
objectives.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
The early adoption of AASB 9 (2014) had no material impact on the Consolidated Entity and resulted in no change in the carrying amount of financial assets
positioned for growth.
copper deposits at Carrapateena.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
and liabilities in the balance sheet on the date of initial application. Refer to Note 14 for additional disclosure.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
Transition to AASB 9 (2014)
copper deposits at Carrapateena.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
commitment to operating discipline. Highlights for Prominent Hill were:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Changes in accounting policies resulting from the adoption of AASB 9 (2014) have been applied retrospectively, except as described below:
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
• Comparative periods have not been restated. There were no differences in the carrying amounts of financial assets and financial liabilities resulting from
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Copper guidance achieved for 2016 and for the second consecutive year;
commitment to operating discipline. Highlights for Prominent Hill were:
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• AASB 9 (2014) replaces the “incurred loss” model in AASB 139 with an “expected credit loss” model for calculating the impairment of financial assets
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
88
88
88
88
88
88
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
including trade receivables. The adoption of AASB 9 (2014) has not had material impact on the carrying value of trade receivables.
165
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
location of the facility.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
location of the facility.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
12
12
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Directors’ Report
Group Structure & Other Information
Group Structure & Other Information
Directors’ Report
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
positioned for growth.
Issued Standards and pronouncements not early adopted
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
copper deposits at Carrapateena.
positioned for growth.
(iii)
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
At the date of authorisation of the Financial Statements, the following AASB Standards and interpretations had been issued but were not yet effective. The
copper deposits at Carrapateena.
commitment to operating discipline. Highlights for Prominent Hill were:
Operational and Financial Review
Consolidated Entity has not yet assessed the full impact of the below standards:
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• AASB 15 Revenue from Contracts with Customers changes the timing (and in some case, the quantum) of revenue recognised from customers. The
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Copper guidance achieved for 2016 and for the second consecutive year;
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
standard does not apply mandatorily before 1 January 2018 and is not expected to have a material impact when it is first adopted for the year ending 31
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
commitment to operating discipline. Highlights for Prominent Hill were:
December 2018.
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• AASB 16 Leases eliminates the distinction between operating and finance leases, and brings all leases (other than short term leases) onto the balance
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Copper guidance achieved for 2016 and for the second consecutive year;
copper deposits at Carrapateena.
sheet. The standard does not apply mandatorily before 1 January 2019 and is not expected to have a material impact when it is first adopted for the year
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
ending 31 December 2019.
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
The following standards, all consequential amendments and interpretations are mandatory from 1 January 2017, have not been adopted early by the group,
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
of the project is currently underway with a number of milestones achieved in 2016:
commitment to operating discipline. Highlights for Prominent Hill were:
and will be first adopted for the year ending 31 December 2017. They are not expected to have material impact on application:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Successful completion of the PFS with robust financials and short payback period;
• AASB 2016-1 Recognition of Deferred Tax Assets for Unrealised Losses; and
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Construction commenced on the Tjati decline; and
• AASB 2016-2 Disclosure Initiative: Amendments to AASB 107 (Statement of Cash Flows)
of the project is currently underway with a number of milestones achieved in 2016:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Successful completion of the PFS with robust financials and short payback period;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Construction commenced on the Tjati decline; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
location of the facility.
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
location of the facility.
• Successful completion of the PFS with robust financials and short payback period;
companies which provides exploration expertise in specific geologies and locations.
• Construction commenced on the Tjati decline; and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
companies which provides exploration expertise in specific geologies and locations.
Australian and Northern Territory borders.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
Australian and Northern Territory borders.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
12
12
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12
Finance
Notes to the Consolidated Financial Statements
Group Structure & Other Information
Directors’ Declaration
Directors’ Declaration
Directors' Declaration
(iii)
Issued Standards and pronouncements not early adopted
1.
1.
In the opinion of the Directors of OZ Minerals Limited (‘the Company’):
In the opinion of the Directors of OZ Minerals Limited (‘the Company’):
At the date of authorisation of the Financial Statements, the following AASB Standards and interpretations had been issued but were not yet effective. The
Consolidated Entity has not yet assessed the full impact of the below standards:
• AASB 15 Revenue from Contracts with Customers changes the timing (and in some case, the quantum) of revenue recognised from customers. The
standard does not apply mandatorily before 1 January 2018 and is not expected to have a material impact when it is first adopted for the year ending 31
• AASB 16 Leases eliminates the distinction between operating and finance leases, and brings all leases (other than short term leases) onto the balance
sheet. The standard does not apply mandatorily before 1 January 2019 and is not expected to have a material impact when it is first adopted for the year
December 2018.
ending 31 December 2019.
The following standards, all consequential amendments and interpretations are mandatory from 1 January 2017, have not been adopted early by the group,
and will be first adopted for the year ending 31 December 2017. They are not expected to have material impact on application:
• AASB 2016-1 Recognition of Deferred Tax Assets for Unrealised Losses; and
• AASB 2016-2 Disclosure Initiative: Amendments to AASB 107 (Statement of Cash Flows)
(a)
(a)
the Consolidated Financial Statements and Notes set out on pages 125 to 166 and the remuneration disclosures that are contained in the
the Consolidated Financial Statements and Notes set out on pages 125 to 166 and the remuneration disclosures that are contained in the
Remuneration Report on pages 52 to 67, are in accordance with the Corporations Act 2001, including:
Remuneration Report on pages 52 to 67, are in accordance with the Corporations Act 2001, including:
(i)
(i)
(ii)
(ii)
giving a true and fair view of the financial position of the Consolidated Entity as at 31 December 2016 and of its performance for the
giving a true and fair view of the financial position of the Consolidated Entity as at 31 December 2016 and of its performance for the
year ended on that date; and
year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b)
(b)
(c)
(c)
the directors draw attention to page 131 to the consolidated financial statements, which includes a statement of compliance with International
the directors draw attention to page 131 to the consolidated financial statements, which includes a statement of compliance with International
Financial Reporting Standards.
Financial Reporting Standards.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due and payable.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due and payable.
There are reasonable grounds to believe that the Company and the consolidated entities identified in Note 18 to the Consolidated Financial Statements
There are reasonable grounds to believe that the Company and the consolidated entities identified in Note 18 to the Consolidated Financial Statements
will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the
will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the
Company and those consolidated entities pursuant to ASIC Class Order 98/1418.
Company and those consolidated entities pursuant to ASIC Class Order 98/1418.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief
Financial Officer for the financial year ended 31 December 2016.
Financial Officer for the financial year ended 31 December 2016.
2.
2.
3.
3.
Signed in accordance with a resolution of the directors.
Signed in accordance with a resolution of the directors.
Neil Hamilton
Neil Hamilton
Chairman
Chairman
Perth
Perth
23 February 2017
23 February 2017
Andrew Cole
Andrew Cole
Managing Director and Chief Executive Officer
Managing Director and Chief Executive Officer
Adelaide
Adelaide
23 February 2017
23 February 2017
89
90
90
167
Annual and Sustainability Report 2016
Directors’ Report
Directors’ Report
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Directors’ Report
Directors’ Report
Operational and Financial Review
Directors’ Report
Directors’ Report
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
positioned for growth.
To the shareholders of OZ Minerals Limited
To the shareholders of OZ Minerals Limited
To the shareholders of OZ Minerals Limited
To the shareholders of OZ Minerals Limited
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
copper deposits at Carrapateena.
Opinion
Opinion
Opinion
Opinion
positioned for growth.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
In our opinion, the accompanying Financial Report of OZ Minerals Limited
In our opinion, the accompanying Financial Report of OZ Minerals Limited
In our opinion, the accompanying Financial Report of OZ Minerals Limited
In our opinion, the accompanying Financial Report of OZ Minerals Limited
copper deposits at Carrapateena.
commitment to operating discipline. Highlights for Prominent Hill were:
is in accordance with the Corporations Act 2001, including
is in accordance with the Corporations Act 2001, including
is in accordance with the Corporations Act 2001, including
is in accordance with the Corporations Act 2001, including
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• giving a true and fair view of the Consolidated Entity’s financial
• giving a true and fair view of the Consolidated Entity’s financial
• giving a true and fair view of the Consolidated Entity’s financial
• giving a true and fair view of the Consolidated Entity’s financial
• Copper guidance achieved for 2016 and for the second consecutive year;
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
position as at 31 December 2016 and of its financial performance for
position as at 31 December 2016 and of its financial performance for
position as at 31 December 2016 and of its financial performance for
position as at 31 December 2016 and of its financial performance for
commitment to operating discipline. Highlights for Prominent Hill were:
the year ended on that date; and
the year ended on that date; and
the year ended on that date; and
the year ended on that date; and
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• complying with Australian Accounting Standards and the Corporations
• complying with Australian Accounting Standards and the Corporations
• complying with Australian Accounting Standards and the Corporations
• complying with Australian Accounting Standards and the Corporations
Directors’ Report
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Regulations 2001.
Regulations 2001.
Regulations 2001.
Regulations 2001.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Directors’ Report
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
of the project is currently underway with a number of milestones achieved in 2016:
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Successful completion of the PFS with robust financials and short payback period;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
Operational and Financial Review
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
Operational and Financial Review
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Operational and Financial Review
We have audited the Financial Report of the Consolidated Entity.
We have audited the Financial Report of the Consolidated Entity.
We have audited the Financial Report of the Consolidated Entity.
We have audited the Financial Report of the Consolidated Entity.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
The Consolidated Entity consists of OZ Minerals Limited (the Company)
The Consolidated Entity consists of OZ Minerals Limited (the Company)
The Consolidated Entity consists of OZ Minerals Limited (the Company)
The Consolidated Entity consists of OZ Minerals Limited (the Company)
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
and the entities it controlled at the year end and from time to time during
and the entities it controlled at the year end and from time to time during
and the entities it controlled at the year end and from time to time during
and the entities it controlled at the year end and from time to time during
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
the financial year.
the financial year.
the financial year.
the financial year.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
commitment to operating discipline. Highlights for Prominent Hill were:
The Financial Report comprises the:
The Financial Report comprises the:
The Financial Report comprises the:
The Financial Report comprises the:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Consolidated balance sheet as at 31 December 2016;
• Consolidated balance sheet as at 31 December 2016;
• Consolidated balance sheet as at 31 December 2016;
• Consolidated balance sheet as at 31 December 2016;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
• Consolidated statement of comprehensive income,
• Consolidated statement of comprehensive income,
• Consolidated statement of comprehensive income,
• Consolidated statement of comprehensive income,
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
consolidated statement of changes in equity, and
consolidated statement of changes in equity, and
consolidated statement of changes in equity, and
consolidated statement of changes in equity, and
commitment to operating discipline. Highlights for Prominent Hill were:
consolidated statement of cash flows for the year then ended;
consolidated statement of cash flows for the year then ended;
consolidated statement of cash flows for the year then ended;
consolidated statement of cash flows for the year then ended;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Notes including summary of significant accounting policies; and
• Notes including summary of significant accounting policies; and
• Notes including summary of significant accounting policies; and
• Notes including summary of significant accounting policies; and
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Directors’ Declaration.
• Directors’ Declaration.
• Directors’ Declaration.
• Directors’ Declaration.
• Copper guidance achieved for 2016 and for the second consecutive year;
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
Basis for opinion
Basis for opinion
Basis for opinion
Basis for opinion
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Operational and Financial Review
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
to provide a basis for our opinion.
to provide a basis for our opinion.
to provide a basis for our opinion.
to provide a basis for our opinion.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
location of the facility.
of the project is currently underway with a number of milestones achieved in 2016:
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
Operational and Financial Review
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Successful completion of the PFS with robust financials and short payback period;
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Construction commenced on the Tjati decline; and
We are independent of the Consolidated Entity in accordance with the Corporations Act 2001 and the relevant ethical requirements of the Accounting
We are independent of the Consolidated Entity in accordance with the Corporations Act 2001 and the relevant ethical requirements of the Accounting
We are independent of the Consolidated Entity in accordance with the Corporations Act 2001 and the relevant ethical requirements of the Accounting
We are independent of the Consolidated Entity in accordance with the Corporations Act 2001 and the relevant ethical requirements of the Accounting
location of the facility.
positioned for growth.
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
location of the facility.
companies which provides exploration expertise in specific geologies and locations.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical
• Construction commenced on the Tjati decline; and
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
location of the facility.
responsibilities in accordance with the Code.
responsibilities in accordance with the Code.
responsibilities in accordance with the Code.
responsibilities in accordance with the Code.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
positioned for growth.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
copper deposits at Carrapateena.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Key audit matters
Key audit matters
Key audit matters
Key audit matters
Australian and Northern Territory borders.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
copper deposits at Carrapateena.
location of the facility.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
location of the facility.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
commitment to operating discipline. Highlights for Prominent Hill were:
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Key Audit Matters are those matters that, in our professional judgment,
Key Audit Matters are those matters that, in our professional judgment,
Key Audit Matters are those matters that, in our professional judgment,
The Key Audit Matters we identified are:
Key Audit Matters are those matters that, in our professional judgment,
The Key Audit Matters we identified are:
The Key Audit Matters we identified are:
The Key Audit Matters we identified are:
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
• Carrying value of Prominent Hill Property, Plant and Equipment
• Carrying value of Prominent Hill Property, Plant and Equipment
• Carrying value of Prominent Hill Property, Plant and Equipment
• Carrying value of Prominent Hill Property, Plant and Equipment
Australian and Northern Territory borders.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
were of most significance in our audit of the Financial Report of the
were of most significance in our audit of the Financial Report of the
were of most significance in our audit of the Financial Report of the
were of most significance in our audit of the Financial Report of the
• Copper guidance achieved for 2016 and for the second consecutive year;
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
commitment to operating discipline. Highlights for Prominent Hill were:
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
current period.
current period.
current period.
current period.
Australian and Northern Territory borders.
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
companies which provides exploration expertise in specific geologies and locations.
• Valuation of Low Grade Gold Ore Stockpiles
• Valuation of Low Grade Gold Ore Stockpiles
• Valuation of Low Grade Gold Ore Stockpiles
• Valuation of Low Grade Gold Ore Stockpiles
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Copper guidance achieved for 2016 and for the second consecutive year;
These matters were addressed in the context of our audit of the Financial
These matters were addressed in the context of our audit of the Financial
These matters were addressed in the context of our audit of the Financial
These matters were addressed in the context of our audit of the Financial
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Report as a whole, and in forming our opinion thereon, and we do not
Report as a whole, and in forming our opinion thereon, and we do not
Report as a whole, and in forming our opinion thereon, and we do not
Report as a whole, and in forming our opinion thereon, and we do not
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
Australian and Northern Territory borders.
provide a separate opinion on these matters.
provide a separate opinion on these matters.
provide a separate opinion on these matters.
provide a separate opinion on these matters.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Australian and Northern Territory borders.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
of the project is currently underway with a number of milestones achieved in 2016:
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
• Successful completion of the PFS with robust financials and short payback period;
of the project is currently underway with a number of milestones achieved in 2016:
• Construction commenced on the Tjati decline; and
• Successful completion of the PFS with robust financials and short payback period;
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• Construction commenced on the Tjati decline; and
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
location of the facility.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
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91
location of the facility.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
12
companies which provides exploration expertise in specific geologies and locations.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
Independent Auditor's Report
Carrying value of Prominent Hill PPE (contained within total PP&E $990.6 million)
Refer to Note 7 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Significant judgment is required by management in the
determination of the carrying value of Prominent Hill PP&E
which is highly sensitive to changes in inputs. Assessment of the
value of Prominent Hill PP&E is a key audit matter given
impairment was recorded in 2013 for these assets, and the
We involved KPMG valuation specialists and our procedures included:
• We tested the controls for management’s valuation of the Prominent Hill PP&E
including board authorisation of key inputs to the assessment such as commodity
prices and exchange rates, and operational assumptions.
significant judgment required by us in evaluating management’s
• We compared the valuation methodology to industry standards and criteria in the
assessment of the value, which is principally based on a Net
Present Value (NPV) model for the Prominent Hill mine. We
particularly focus on those judgements listed below which
impact estimated future cash flows:
relevant accounting standards. This included consideration of assumptions about
the price that may be received if selling the Prominent Hill PP&E in an orderly
transaction between market participants at the measurement date.
• We assessed the discount rate applied against comparable market rates and
• Assumptions about future commodity prices and foreign
industry trends.
exchange rates;
• Prominent Hill operational assumptions, such as:
Future metal production levels which are dependent
on extraction of ore from the mine, estimated grades
of metal in the ore body, and ability to recover metal
contained in the ore extracted.
• We critically evaluated the Consolidated Entity’s key cash flow assumptions by:
comparing forecast commodity prices and foreign exchange rates applied
by management to published analyst and broker data about future
commodity prices and foreign exchange rates;
using our knowledge of previous production levels and the current business
model to assess the Consolidated Entity’s capacity to achieve future
Future capital expenditure and operating costs.
production levels;
o
o
o
The discount rate applied to forecast cash flows.
To assess the significant judgements of this key audit matter, we
involved senior audit team members, including valuation
specialists, with experience in the industry and the valuation
methodology.
using our knowledge of historical capital and operating costs and future
plans to assess the Consolidated Entity’s assumptions in these areas;
comparing ore to be mined and processed in the NPV model to the Mineral
Resources and Ore Reserves Statements prepared by the Consolidated
Entity in accordance with Joint Ore Reserves Committee (JORC)
requirements. These requirements govern evaluation and reporting of the
existence of minerals resources. We also compared ore to be mined and
processed to historical estimates;
reading and considering findings from independent external specialists
engaged by the Consolidated Entity to assess the accuracy of JORC
Resource and Reserve estimates for information which may indicate that
estimates of ore to be mined and processed are not achievable.
• We performed sensitivity analysis on key assumptions to assess how management
had addressed estimation uncertainty through alternative assumptions or
outcomes which could indicate the potential for further write downs or reversal of
a previously recognised impairment.
• We assessed the value ascribed to the ore bodies known to exist at Prominent Hill
but have not been included in the NPV model, by comparing it to market data for
comparable transactions.
• We assessed the appropriateness of the Consolidated Entity’s method used to
determine the recoverable amount against the relevant Australian Accounting
Standards.
• We assessed the Consolidated Entity’s disclosures in respect of asset values and
impairment testing against the requirements of Australian Accounting Standards.
o
o
o
o
o
92
KPMG, an Australian partnership and a member firm of
KPMG, an Australian partnership and a member firm of
KPMG, an Australian partnership and a member firm of
KPMG, an Australian partnership and a member firm of
the KPMG network of independent member firms
the KPMG network of independent member firms
the KPMG network of independent member firms
the KPMG network of independent member firms
affiliated with KPMG International Cooperative ('KPMG
affiliated with KPMG International Cooperative ('KPMG
affiliated with KPMG International Cooperative ('KPMG
affiliated with KPMG International Cooperative ('KPMG
International'), a Swiss entity.
International'), a Swiss entity.
International'), a Swiss entity.
International'), a Swiss entity.
Liability limited by a scheme approved under
Liability limited by a scheme approved under
Liability limited by a scheme approved under
Liability limited by a scheme approved under
Professional Standards Legislation.
Professional Standards Legislation.
Professional Standards Legislation.
Professional Standards Legislation.
(PP&E)
(PP&E)
(PP&E)
(PP&E)
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12
12
12
12
12
Finance
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
In our opinion, the accompanying Financial Report of OZ Minerals Limited
We have audited the Financial Report of the Consolidated Entity.
To the shareholders of OZ Minerals Limited
Opinion
is in accordance with the Corporations Act 2001, including
• giving a true and fair view of the Consolidated Entity’s financial
position as at 31 December 2016 and of its financial performance for
the year ended on that date; and
• complying with Australian Accounting Standards and the Corporations
Regulations 2001.
The Consolidated Entity consists of OZ Minerals Limited (the Company)
and the entities it controlled at the year end and from time to time during
the financial year.
The Financial Report comprises the:
• Consolidated balance sheet as at 31 December 2016;
• Consolidated statement of comprehensive income,
consolidated statement of changes in equity, and
consolidated statement of cash flows for the year then ended;
• Notes including summary of significant accounting policies; and
• Directors’ Declaration.
Basis for opinion
to provide a basis for our opinion.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.
We are independent of the Consolidated Entity in accordance with the Corporations Act 2001 and the relevant ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical
responsibilities in accordance with the Code.
Key audit matters
The Key Audit Matters we identified are:
• Carrying value of Prominent Hill Property, Plant and Equipment
(PP&E)
• Valuation of Low Grade Gold Ore Stockpiles
Key Audit Matters are those matters that, in our professional judgment,
were of most significance in our audit of the Financial Report of the
current period.
These matters were addressed in the context of our audit of the Financial
Report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
KPMG, an Australian partnership and a member firm of
the KPMG network of independent member firms
affiliated with KPMG International Cooperative ('KPMG
Liability limited by a scheme approved under
International'), a Swiss entity.
Professional Standards Legislation.
91
Carrying value of Prominent Hill PPE (contained within total PP&E $990.6 million)
Refer to Note 7 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Significant judgment is required by management in the
determination of the carrying value of Prominent Hill PP&E
which is highly sensitive to changes in inputs. Assessment of the
value of Prominent Hill PP&E is a key audit matter given
impairment was recorded in 2013 for these assets, and the
significant judgment required by us in evaluating management’s
assessment of the value, which is principally based on a Net
Present Value (NPV) model for the Prominent Hill mine. We
particularly focus on those judgements listed below which
impact estimated future cash flows:
We involved KPMG valuation specialists and our procedures included:
• We tested the controls for management’s valuation of the Prominent Hill PP&E
including board authorisation of key inputs to the assessment such as commodity
prices and exchange rates, and operational assumptions.
• We compared the valuation methodology to industry standards and criteria in the
relevant accounting standards. This included consideration of assumptions about
the price that may be received if selling the Prominent Hill PP&E in an orderly
transaction between market participants at the measurement date.
• We assessed the discount rate applied against comparable market rates and
• Assumptions about future commodity prices and foreign
industry trends.
exchange rates;
• Prominent Hill operational assumptions, such as:
o
o
o
Future metal production levels which are dependent
on extraction of ore from the mine, estimated grades
of metal in the ore body, and ability to recover metal
contained in the ore extracted.
Future capital expenditure and operating costs.
The discount rate applied to forecast cash flows.
To assess the significant judgements of this key audit matter, we
involved senior audit team members, including valuation
specialists, with experience in the industry and the valuation
methodology.
• We critically evaluated the Consolidated Entity’s key cash flow assumptions by:
o
o
o
o
o
comparing forecast commodity prices and foreign exchange rates applied
by management to published analyst and broker data about future
commodity prices and foreign exchange rates;
using our knowledge of previous production levels and the current business
model to assess the Consolidated Entity’s capacity to achieve future
production levels;
using our knowledge of historical capital and operating costs and future
plans to assess the Consolidated Entity’s assumptions in these areas;
comparing ore to be mined and processed in the NPV model to the Mineral
Resources and Ore Reserves Statements prepared by the Consolidated
Entity in accordance with Joint Ore Reserves Committee (JORC)
requirements. These requirements govern evaluation and reporting of the
existence of minerals resources. We also compared ore to be mined and
processed to historical estimates;
reading and considering findings from independent external specialists
engaged by the Consolidated Entity to assess the accuracy of JORC
Resource and Reserve estimates for information which may indicate that
estimates of ore to be mined and processed are not achievable.
• We performed sensitivity analysis on key assumptions to assess how management
had addressed estimation uncertainty through alternative assumptions or
outcomes which could indicate the potential for further write downs or reversal of
a previously recognised impairment.
• We assessed the value ascribed to the ore bodies known to exist at Prominent Hill
but have not been included in the NPV model, by comparing it to market data for
comparable transactions.
• We assessed the appropriateness of the Consolidated Entity’s method used to
determine the recoverable amount against the relevant Australian Accounting
Standards.
• We assessed the Consolidated Entity’s disclosures in respect of asset values and
impairment testing against the requirements of Australian Accounting Standards.
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169
Annual and Sustainability Report 2016
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Valuation of Low Grade Gold Ore Stockpiles ($131.4 million)
Valuation of Low Grade Gold Ore Stockpiles ($131.4 million)
Refer to Note 5 to the Financial Report
Refer to Note 5 to the Financial Report
The key audit matter
The key audit matter
How the matter was addressed in our audit
How the matter was addressed in our audit
Significant judgment is required to be exercised by management
Significant judgment is required to be exercised by management
in assessment of the value of low grade gold ore which will be
in assessment of the value of low grade gold ore which will be
combined with copper ore to be mined in the future to produce
combined with copper ore to be mined in the future to produce
concentrate. The valuation of low grade gold ore stockpiles is a
concentrate. The valuation of low grade gold ore stockpiles is a
key audit matter because significant judgment is required by us
key audit matter because significant judgment is required by us
in evaluating management’s assessment of the value. This is
in evaluating management’s assessment of the value. This is
based on a model which estimates future revenue expected to
based on a model which estimates future revenue expected to
be derived from low grade gold ore contained in existing ore
be derived from low grade gold ore contained in existing ore
stockpiles, less selling costs and further processing costs to
stockpiles, less selling costs and further processing costs to
convert ore into concentrate. We particularly focus on those
convert ore into concentrate. We particularly focus on those
judgments listed below which impact the valuation model:
judgments listed below which impact the valuation model:
• Future metal production levels which are dependent on the
• Future metal production levels which are dependent on the
volume and grade of existing low grade gold ore stockpiles
volume and grade of existing low grade gold ore stockpiles
and the amount of metal expected to be recovered.
and the amount of metal expected to be recovered.
• Future processing costs of low grade gold ore, and related
• Future processing costs of low grade gold ore, and related
selling costs.
selling costs.
• Future commodity prices and foreign exchange rates expected
• Future commodity prices and foreign exchange rates expected
to prevail when the concentrate containing gold from existing
to prevail when the concentrate containing gold from existing
low grade gold ore stockpiles is processed and sold.
low grade gold ore stockpiles is processed and sold.
In assessing this key audit matter, we used team members who
In assessing this key audit matter, we used team members who
understand the Consolidated Entity’s business, industry and the
understand the Consolidated Entity’s business, industry and the
relevant economic environment.
relevant economic environment.
Other Information
Other Information is financial and non-financial information in OZ Minerals Limited’s annual reporting which is provided in addition to the Financial Report
and the Auditor’s Report. This includes the 2016 Snapshot, Message from the Chairman and CEO, Our Company Strategy, Prominent Hill, Carrapateena,
Exploration and Growth, Governance, Results for Announcement to the Market, Directors’ Report including the Operational and Financial Review,
Remuneration Overview and Report, Sustainability Report, Reserves and Resources 2016, Letter from the Chairman of the Human Resources and
Remuneration Committee and Shareholder Information. The Directors are responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report including the Operational and Financial Review,
Remuneration Overview and Report, Letter from the Chairman of the Human Resources and Remuneration Committee, and Results for Announcement to the
Market. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other
Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the
Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error; and
• assessing the Consolidated Entity’s ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless they either intend to liquidate the Consolidated Entity or to cease operations, or have no realistic
alternative but to do so.
Our objective is:
Auditor’s responsibilities for the audit of the Financial Report
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
always detect a material misstatement when it exists.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of this Financial Report.
A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report.
Our procedures included:
Our procedures included:
• We tested the controls relevant to:
• We tested the controls relevant to:
o management’s valuation of low grade gold ore stockpiles, including
o management’s valuation of low grade gold ore stockpiles, including
authorisation of key inputs to the assessment such as commodity prices,
foreign exchange rates, and processing costs; and
authorisation of key inputs to the assessment such as commodity prices,
foreign exchange rates, and processing costs; and
o management’s process for recording and monitoring volumes and grades of
o management’s process for recording and monitoring volumes and grades of
stockpiled low grade gold ore such as the use of independent quantity
stockpiled low grade gold ore such as the use of independent quantity
surveyors and management review and approval of grades.
surveyors and management review and approval of grades.
• We assessed the methodology applied by the Consolidated Entity in determining
• We assessed the methodology applied by the Consolidated Entity in determining
the value of low grade gold ore stockpiles against the requirements of Accounting
the value of low grade gold ore stockpiles against the requirements of Accounting
Standards for determining the net realisable value of inventories which are yet to
Standards for determining the net realisable value of inventories which are yet to
be converted into finished goods.
be converted into finished goods.
• We compared the results of independent quantity surveyors to volume of low
• We compared the results of independent quantity surveyors to volume of low
grade gold ore stockpiles.
grade gold ore stockpiles.
• We compared grades of stockpiled low grade gold ore to stockpiled low grade
• We compared grades of stockpiled low grade gold ore to stockpiled low grade
gold ore in previous periods, and against grades reported in the JORC Ore
gold ore in previous periods, and against grades reported in the JORC Ore
Reserves Statement.
Reserves Statement.
• We evaluated the Consolidated Entity’s key assumptions used to determine the
• We evaluated the Consolidated Entity’s key assumptions used to determine the
value of low grade gold ore stockpiles by:
value of low grade gold ore stockpiles by:
o
o
o
o
o
o
comparing forecast processing costs of low grade gold ore against historical
comparing forecast processing costs of low grade gold ore against historical
actual processing costs to assess forecast processing cost assumptions;
actual processing costs to assess forecast processing cost assumptions;
assessing forecast selling costs by comparing to trends from evaluation of
existing customer sales contracts;
assessing forecast selling costs by comparing to trends from evaluation of
existing customer sales contracts;
assessing commodity prices and foreign exchange rates applied by
management against published analyst and broker data about commodity
prices and foreign exchange rates expected to prevail in the future.
assessing commodity prices and foreign exchange rates applied by
management against published analyst and broker data about commodity
prices and foreign exchange rates expected to prevail in the future.
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Finance
Valuation of Low Grade Gold Ore Stockpiles ($131.4 million)
Valuation of Low Grade Gold Ore Stockpiles ($131.4 million)
Refer to Note 5 to the Financial Report
Refer to Note 5 to the Financial Report
The key audit matter
The key audit matter
How the matter was addressed in our audit
How the matter was addressed in our audit
Significant judgment is required to be exercised by management
Significant judgment is required to be exercised by management
Our procedures included:
Our procedures included:
in assessment of the value of low grade gold ore which will be
in assessment of the value of low grade gold ore which will be
combined with copper ore to be mined in the future to produce
combined with copper ore to be mined in the future to produce
concentrate. The valuation of low grade gold ore stockpiles is a
concentrate. The valuation of low grade gold ore stockpiles is a
key audit matter because significant judgment is required by us
key audit matter because significant judgment is required by us
in evaluating management’s assessment of the value. This is
in evaluating management’s assessment of the value. This is
based on a model which estimates future revenue expected to
based on a model which estimates future revenue expected to
be derived from low grade gold ore contained in existing ore
be derived from low grade gold ore contained in existing ore
stockpiles, less selling costs and further processing costs to
stockpiles, less selling costs and further processing costs to
convert ore into concentrate. We particularly focus on those
convert ore into concentrate. We particularly focus on those
judgments listed below which impact the valuation model:
judgments listed below which impact the valuation model:
• Future metal production levels which are dependent on the
• Future metal production levels which are dependent on the
volume and grade of existing low grade gold ore stockpiles
volume and grade of existing low grade gold ore stockpiles
and the amount of metal expected to be recovered.
and the amount of metal expected to be recovered.
• We tested the controls relevant to:
• We tested the controls relevant to:
o management’s valuation of low grade gold ore stockpiles, including
o management’s valuation of low grade gold ore stockpiles, including
authorisation of key inputs to the assessment such as commodity prices,
authorisation of key inputs to the assessment such as commodity prices,
foreign exchange rates, and processing costs; and
foreign exchange rates, and processing costs; and
o management’s process for recording and monitoring volumes and grades of
o management’s process for recording and monitoring volumes and grades of
stockpiled low grade gold ore such as the use of independent quantity
stockpiled low grade gold ore such as the use of independent quantity
surveyors and management review and approval of grades.
surveyors and management review and approval of grades.
• We assessed the methodology applied by the Consolidated Entity in determining
• We assessed the methodology applied by the Consolidated Entity in determining
the value of low grade gold ore stockpiles against the requirements of Accounting
the value of low grade gold ore stockpiles against the requirements of Accounting
Standards for determining the net realisable value of inventories which are yet to
Standards for determining the net realisable value of inventories which are yet to
be converted into finished goods.
be converted into finished goods.
• We compared the results of independent quantity surveyors to volume of low
• We compared the results of independent quantity surveyors to volume of low
• Future processing costs of low grade gold ore, and related
• Future processing costs of low grade gold ore, and related
grade gold ore stockpiles.
grade gold ore stockpiles.
selling costs.
selling costs.
• Future commodity prices and foreign exchange rates expected
• Future commodity prices and foreign exchange rates expected
to prevail when the concentrate containing gold from existing
to prevail when the concentrate containing gold from existing
low grade gold ore stockpiles is processed and sold.
low grade gold ore stockpiles is processed and sold.
In assessing this key audit matter, we used team members who
In assessing this key audit matter, we used team members who
understand the Consolidated Entity’s business, industry and the
understand the Consolidated Entity’s business, industry and the
relevant economic environment.
relevant economic environment.
• We compared grades of stockpiled low grade gold ore to stockpiled low grade
• We compared grades of stockpiled low grade gold ore to stockpiled low grade
gold ore in previous periods, and against grades reported in the JORC Ore
gold ore in previous periods, and against grades reported in the JORC Ore
Reserves Statement.
Reserves Statement.
• We evaluated the Consolidated Entity’s key assumptions used to determine the
• We evaluated the Consolidated Entity’s key assumptions used to determine the
value of low grade gold ore stockpiles by:
value of low grade gold ore stockpiles by:
o
o
o
o
o
o
comparing forecast processing costs of low grade gold ore against historical
comparing forecast processing costs of low grade gold ore against historical
actual processing costs to assess forecast processing cost assumptions;
actual processing costs to assess forecast processing cost assumptions;
assessing forecast selling costs by comparing to trends from evaluation of
assessing forecast selling costs by comparing to trends from evaluation of
existing customer sales contracts;
existing customer sales contracts;
assessing commodity prices and foreign exchange rates applied by
assessing commodity prices and foreign exchange rates applied by
management against published analyst and broker data about commodity
management against published analyst and broker data about commodity
prices and foreign exchange rates expected to prevail in the future.
prices and foreign exchange rates expected to prevail in the future.
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Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Independent Auditor's Report
Directors’ Report
Other Information
Other Information
Other Information
Directors’ Report
Other Information is financial and non-financial information in OZ Minerals Limited’s annual reporting which is provided in addition to the Financial Report
Other Information is financial and non-financial information in OZ Minerals Limited’s annual reporting which is provided in addition to the Financial Report
Other Information is financial and non-financial information in OZ Minerals Limited’s annual reporting which is provided in addition to the Financial Report
and the Auditor’s Report. This includes the 2016 Snapshot, Message from the Chairman and CEO, Our Company Strategy, Prominent Hill, Carrapateena,
and the Auditor’s Report. This includes the 2016 Snapshot, Message from the Chairman and CEO, Our Company Strategy, Prominent Hill, Carrapateena,
and the Auditor’s Report. This includes the 2016 Snapshot, Message from the Chairman and CEO, Our Company Strategy, Prominent Hill, Carrapateena,
Directors’ Report
Exploration and Growth, Governance, Results for Announcement to the Market, Directors’ Report including the Operational and Financial Review,
Exploration and Growth, Governance, Results for Announcement to the Market, Directors’ Report including the Operational and Financial Review,
Exploration and Growth, Governance, Results for Announcement to the Market, Directors’ Report including the Operational and Financial Review,
Remuneration Overview and Report, Sustainability Report, Reserves and Resources 2016, Letter from the Chairman of the Human Resources and
Remuneration Overview and Report, Sustainability Report, Reserves and Resources 2016, Letter from the Chairman of the Human Resources and
Remuneration Overview and Report, Sustainability Report, Reserves and Resources 2016, Letter from the Chairman of the Human Resources and
Remuneration Committee and Shareholder Information. The Directors are responsible for the Other Information.
Remuneration Committee and Shareholder Information. The Directors are responsible for the Other Information.
Remuneration Committee and Shareholder Information. The Directors are responsible for the Other Information.
misstatement, whether due to fraud or error; and
misstatement, whether due to fraud or error; and
misstatement, whether due to fraud or error; and
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report including the Operational and Financial Review,
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report including the Operational and Financial Review,
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report including the Operational and Financial Review,
Remuneration Overview and Report, Letter from the Chairman of the Human Resources and Remuneration Committee, and Results for Announcement to the
Remuneration Overview and Report, Letter from the Chairman of the Human Resources and Remuneration Committee, and Results for Announcement to the
Remuneration Overview and Report, Letter from the Chairman of the Human Resources and Remuneration Committee, and Results for Announcement to the
Market. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Market. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Market. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Directors’ Report
Operational and Financial Review
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of
Directors’ Report
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
Operational and Financial Review
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Operational and Financial Review
positioned for growth.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the
We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the
We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the
positioned for growth.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.
Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.
Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.
copper deposits at Carrapateena.
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
positioned for growth.
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Responsibilities of Directors for the Financial Report
Responsibilities of Directors for the Financial Report
Responsibilities of Directors for the Financial Report
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
commitment to operating discipline. Highlights for Prominent Hill were:
copper deposits at Carrapateena.
The Directors are responsible for:
The Directors are responsible for:
The Directors are responsible for:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
Operational and Financial Review
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Operational and Financial Review
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material
• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals is a copper focused modern mining company listed on the Australian Securities Exchange with a growth strategy centred on creating value for all
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
positioned for growth.
• assessing the Consolidated Entity’s ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and
• assessing the Consolidated Entity’s ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and
• assessing the Consolidated Entity’s ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and
stakeholders. As one of Australia's largest copper producers, with quality assets, a strong cash balance of $655.7 million and no debt, OZ Minerals is ideally
• Copper guidance achieved for 2016 and for the second consecutive year;
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
positioned for growth.
using the going concern basis of accounting unless they either intend to liquidate the Consolidated Entity or to cease operations, or have no realistic
using the going concern basis of accounting unless they either intend to liquidate the Consolidated Entity or to cease operations, or have no realistic
using the going concern basis of accounting unless they either intend to liquidate the Consolidated Entity or to cease operations, or have no realistic
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
alternative but to do so.
alternative but to do so.
alternative but to do so.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
copper deposits at Carrapateena.
OZ Minerals owns and operates the Prominent Hill copper-gold-silver mine and has completed the pre-feasibility study (‘PFS’) on one of Australia’s largest
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
of the project is currently underway with a number of milestones achieved in 2016:
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
copper deposits at Carrapateena.
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
Auditor’s responsibilities for the audit of the Financial Report
Auditor’s responsibilities for the audit of the Financial Report
Auditor’s responsibilities for the audit of the Financial Report
of the project is currently underway with a number of milestones achieved in 2016:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Successful completion of the PFS with robust financials and short payback period;
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Prominent Hill is located in South Australia 130 km south-east of Coober Pedy. Comprised of an open pit and underground mine, Prominent Hill produces one
commitment to operating discipline. Highlights for Prominent Hill were:
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
Our objective is:
Our objective is:
Our objective is:
of the highest-grade copper concentrates in the world at a bottom quartile cash costs. In 2016 Prominent Hill delivered strong financial results driven by a
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and
of the project is currently underway with a number of milestones achieved in 2016:
commitment to operating discipline. Highlights for Prominent Hill were:
• Copper guidance achieved for 2016 and for the second consecutive year;
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
• to issue an Auditor’s Report that includes our opinion.
• to issue an Auditor’s Report that includes our opinion.
• to issue an Auditor’s Report that includes our opinion.
• Successful completion of the PFS with robust financials and short payback period;
• Copper guidance achieved for 2016 and for the second consecutive year;
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will
• Construction commenced on the Tjati decline; and
• Mine life extended to 2028 driven by growth in underground Ore Reserve of more than 40%; and
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
always detect a material misstatement when it exists.
always detect a material misstatement when it exists.
always detect a material misstatement when it exists.
location of the facility.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
• C1 costs of US 74.1c/lb within guidance and in the lowest quartile of global copper producers.
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
Carrapateena is an iron-oxide, copper-gold (IOCG) project located in South Australia’s highly prospective Gawler Craton region. Carrapateena is a key part of
the economic decisions of users taken on the basis of this Financial Report.
the economic decisions of users taken on the basis of this Financial Report.
the economic decisions of users taken on the basis of this Financial Report.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
of the project is currently underway with a number of milestones achieved in 2016:
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
OZ Minerals’ growth pipeline. The project has potential for a 20 plus year mine life and could generate operating cash flow by 2019. A feasibility study (‘FS’)
companies which provides exploration expertise in specific geologies and locations.
A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance Standards Board website at:
A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance Standards Board website at:
A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance Standards Board website at:
location of the facility.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
of the project is currently underway with a number of milestones achieved in 2016:
• Successful completion of the PFS with robust financials and short payback period;
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report.
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report.
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report.
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
• Successful completion of the PFS with robust financials and short payback period;
• Construction commenced on the Tjati decline; and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
• Construction commenced on the Tjati decline; and
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
companies which provides exploration expertise in specific geologies and locations.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
• Partnering agreement signed with Carrapateena’s Traditional Owners, the Kokatha Aboriginal Corporation.
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
OZ Minerals is continuing to work on the Concentrate Treatment Plant (CTP) Feasibility Study that uses an innovative process to create a high quality premium
location of the facility.
Australian and Northern Territory borders.
concentrate, containing 50-60% copper. The CTP is undergoing a parallel but separate FS that will provide further definition around engineering, costs and
location of the facility.
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
OZ Minerals’ pipeline of potential growth opportunities expanded in 2016 with the signing of three new earn-in agreements with exploration companies to
companies which provides exploration expertise in specific geologies and locations.
explore prospects at West Musgrave, Intercept Hill, and Coompana. OZ Minerals now has six such agreements in place with experienced exploration
companies which provides exploration expertise in specific geologies and locations.
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
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project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
The West Musgrave project with Cassini Resources is the most advanced of OZ Minerals’ earn-in agreements with a scoping study currently underway. The
Australian and Northern Territory borders.
project is targeting the Nebo-Babel nickel-copper and Succoth copper deposits located in the Musgrave Province of Western Australia near the South
Australian and Northern Territory borders.
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Annual and Sustainability Report 2016
Independent Auditor's Report
Independent Auditor's Report
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of OZ Minerals Limited for the
year ended 31 December 2016, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for the preparation and
presentation of the Remuneration Report in accordance with Section 300A
of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 52 to 67 of
the Directors’ Report for the year ended 31 December 2016.
Our responsibility is to express an opinion on the Remuneration Report,
based on our Audit conducted in accordance with Australian Auditing
Standards.
KPMG
Paul Cenko
Partner
Adelaide
23 February 2017
95
Finance
Independent Auditor's Report
Shareholder Information
Report on the Remuneration Report
Opinion
Corporations Act 2001.
In our opinion, the Remuneration Report of OZ Minerals Limited for the
The Directors of the Company are responsible for the preparation and
year ended 31 December 2016, complies with Section 300A of the
presentation of the Remuneration Report in accordance with Section 300A
Directors’ responsibilities
of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 52 to 67 of
the Directors’ Report for the year ended 31 December 2016.
Our responsibility is to express an opinion on the Remuneration Report,
based on our Audit conducted in accordance with Australian Auditing
Standards.
KPMG
Paul Cenko
Partner
Adelaide
23 February 2017
Capital
Share capital comprised 298,664,750 fully paid ordinary shares on 17 March 2017.
Shareholder details
At 17 March 2017, the Company had 46,869 shareholders. There were 4,455 shareholdings with less than a marketable parcel of $500 worth of ordinary shares.
Top 20 investors at 17 March 2017
Name
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Limited
National Nominees Limited
BNP Paribas Nominees Pty Ltd,
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